Technology Service Providers Could Learn Something from Retailers
Commentary by Bill Bittner, President, BWH Consulting
I have worked with retailers throughout my professional career. Retailers understand
customer service. They understand the need to identify customers “wants and
needs” and then to develop a service structure that satisfies them. Retailers
understand that the same products are available at a competitor’s store and,
if they cannot meet the consumer’s requirements, their competitor will.
Technology companies, such as phone and cable providers, have completely missed
the point. Instead of viewing their business as a consumer service, they view
it as a way to “monetize their capital investment.” The goal is not to provide
the best possible features for the least cost, but rather to maximize revenues
from their sunk investment in the network infrastructure. This leads to the
bundling of services and artificial limitations on performance to create a tiered
pricing structure so that additional charges can be assessed. Internet service
providers, such as the cable companies, also enjoy political support as recent
legislation has reinforced their right to decide who can have access to the
The classic example of the technology companies’ attitudes was the cell phone
number system. For years, it was “Impossible” to transfer your number to another
provider. This technical hurdle was finally surmounted, not by an electrical
engineer working hard into the night to discover a new switching algorithm,
but by a legislature that finally had so many complaints from individual constituents.
The legislature had to ignore the huge political contributions from the service
providers in order to pass legislation that required them to develop the capability
(which probably always existed, but maybe not).
Moderator’s Comment: What do you think? Is there something
that phone companies and cable companies can learn from retailers? What have
been your experiences?
I really believe there has to be an effort to put more competition
into the internet service environment or, at the other extreme, monopolize it
and control it as a public utility. “Net Neutrality” is the buzz word right now
regarding tiered pricing on the internet. The debate is whether cable and phone
companies should be able to charge “content providers,” those folks who maintain
websites such as Google, Yahoo, and your favorite garage band’s server, different
prices for internet access or even refuse access if they don’t like the content.
The Internet Service Providers (ISPs) want to be able to charge different amounts
because it is another source of revenue for their sunk infrastructure investment.
I wonder how the legislature will vote?
If you have a broadband connection, here is a good video
explanation of the debate:
Neutrality – YouTube.com