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Keeping Customers

Good and Poor
Management Decision Making

Posted on February 16,2011

These are only personal experiences with various companies and their products. Your experiences may be different than those chronicled here.

Toilet Paper: In our house, we used to use Scott’s Tissue. Their long lasting rolls made buying Scott an easy choice. However, recently, in their wisdom they decided to reduce the size of their rolls and maintain the premium price – are they crazy or what? We swapped to the Wal-Mart brand – 6 rolls for $0.97. The rolls don’t last as long but we now save at least a dollar a week by not buying the miniaturized size Scott brand ($3.98 for four rolls). Boneheaded moves like Scott Paper made, makes us scratch our heads and wonder what in the world were they thinking.

Phone and Internet: We no longer use AT&T as our telephone provider. Granted, my home is not in a metropolitan area, but neither is it in the sticks. Population density means the difference in having a good or bad internet experience with AT&T. In the days of dial-up internet, the cost was the same from AT&T no matter where you lived. However, for the same money, city dwellers could enjoy 56Kbs and, had the option to subscribe to their DSL, a much faster service. Everyone outside of high population density areas received only 26Kbs. Because AT&T didn’t see fit to extend their better service to the local towns and communities, AT&T isolated those users. By choosing not to offer the less populated areas good internet service, they alienated a large segment of their customer base.

AT&T Exclusive: Then came the I-Phone from Apple. AT&T had exclusive rights to the I-Phone. This should have been a coup-de-grace to AT&T competitors, but AT&T did the same for their cellular customers that they did for their dial-up customers. Once the I-Phone user left the populated areas, the service became mediocre at best. AT&T’s cavalier attitude to rural users left the door open for their competitors….hello Verizon. Verizon, Sprint and others bothered to build the necessary digital infrastructure that included the less populated areas.

Apple could see what was happening and found a way to offer the popular I-Phone to Verizon. It meant that the market for the I-Phone increased rapidly. AT&T could only watch a lot of their customer base migrate to the better and farther reaching digital services of their competitors. Worse for AT&T, there was a problem with dropped calls. Customers put the blame on Apple, but in reality, it was AT&T causing the problem. Now that Verizon has rights to the I-Phone, AT&T has announced their intention to rebuild their towers and prevent further call dropping.

Texas Energy: If you live in Texas, you have probably played roulette with the different electrical energy providers. Currently at my house, we are on our third provider. We started out with Reliant Energy, but their high prices forced us into looking for a cheaper provider. Gexa seemed like a good choice at the time so we moved our account. The first year was great, but then they started raising rates. When their rate got ridiculous, I called them, and they informed me that they indeed had a lower rate, all that was required of me was to enroll in one of their multi-year plans.

Staring at the phone and silently muttering a few colorful expletives was my reaction. After being a customer for more than two years, you would think that Gexa would have let me know about their cheaper, multi-year plans. But it wasn’t to be. They allowed me to continue paying those high rates without so much as word about their new plans. That’s when I moved to my current provider, TXU Energy.

TXU has been my provider for 3 years now and I have nothing but good to say about them. Not only have they reduced their rate from the rate we originally signed on with, but also, they mail us a 3% cash back VISA gift card every year. They accept my online payments, and keep us informed whenever it is time to re-sign for another 2-year deal. Like I said, so far so good. We are in our second 2-year period and the rates are down significantly for this second period. Business firms should take it to heart that taking good care of their customers is good business.

On-Line Shopping: Even though I shop on-line, I am ever watchful for bargains. I try and avoid those on-line merchants with their products priced the same as their brick and mortar cousins that serve us locally. The local stores have a lot more expense than the on-line retailers do. Local and state taxes, insurance, rent, and employees – both trained and untrained, are unavoidable expenses inherent with the local stores. On-line outlets do not have the same burdens to bear and can profitably sell for less than the walk-in store. The main advantage of a walk-in store is immediacy. You get the product as soon as you pay for it, no waiting for several days for delivery. Presently, walk-in type stores have a thin bottom line as they try and compete with the on-line variety.

With few exceptions, such as grocery, clothing, restaurants, construction suppliers, and other stores that cater to immediate needs, I will predict that over time, we will see far fewer walk-in stores. It is one of those inevitabilities.

In Clonclusion: The sucess or failure of most businesses depend upon good management practices. For example ... When you walk into a restaurant and look around, do you notice small things like a dead fly in a window sill? Or food that is getting cold because it is on the 'order up' counter and not being served? Do you have to flag down your waiter for service? In my case, I hate having to sit and wait or have to flag down the waiter for the check so I can pay and leave. Your experiences with any business whether good or bad is the responsibility of the management. Too many businesses get complacent and take their customers for granted... it's what gives competition a foothold.

"We are only a version of Aesop's Ant and Grasshopper fable."
- Unknown


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A Physics Major at the University of Texas
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