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AT&T Wireless suffocates innovation

I was reminded directly and personally this past week of the single most suffocating business phrase that stifles innovation and destroys your customer experience:

“It’s our policy.”

The culprit was AT&T Wireless, until this week the sole provider of iPhone wireless service. The issue: I wanted my college attending son to become responsible for his own phone bill and remove his line from my family wireless plan.

From a customer perspective, this should be a relatively quick and easy transaction. We were both in the store, so permission wasn’t an issue, there was no new equipment involved and we were keeping the same phone number. All we wanted was to change the billing name and address from mine to his.

AT&T’s response: that will be $500.

That’s right. AT&T wanted a $500 deposit, to be held for one year, to change the billing responsibility to my 19 year old son.

Putting that into perspective, his monthly plan was $39.95, so AT&T wanted him to essentially prepay an entire year for the privilege of remaining with AT&T.

Why? It’s their policy.

Since most 19 year olds have not yet established credit, AT&T is concerned that they will sign up for an account, get a new phone then disappear without paying their bill. AT&T would then be out the cost of a new phone (very expensive if it’s an iPhone) and whatever minutes they racked up. I understand their dilemma.

What I don’t understand is their adherence to a strict policy despite circumstances that clearly demonstrate its ridiculousness.

These include:

1. they were dealing with a long-term client whose total billings exceed $15,000. I’m pretty certain that I fit the profile of their ideal client: many devices, heavy data usage, big monthly bill.
2. there was no equipment involved. My son owns his phone, so there was no risk of AT&T losing hundreds of dollars in equipment.
3. the amount they were requesting exceeded his anticipated annual bill.

But, “it’s our policy” prevented them from considering reasonable options that would have protected their interests while addressing a highly valued customer’s concerns.

Had they been innovative and truly concerned with their client’s experience they could have:

1. enabled me to bear co-responsibility for my son’s bill (I volunteered, and they refused)
2. reduced the deposit amount to a reasonable fee of $100-150 (I requested this and they refused)
3. put a cap on the monthly usage so that his bill could never exceed $100 without payment or his service would be shut off (they certainly have this capacity, but refused)

OR… they could have examined my lengthy history with their company, taken into consideration my desire to establish my son as a direct client with their service, considered their near absence of risk and done the right thing: transfer the number, welcome my son as a new valued client and congratulate me for having a responsible son striking out on his own and taking care of his personal obligations. How many businesses wouldn’t welcome a client’s effort to introduce their son or daughter as a potential long-term client? AT&T could have elevated an ordinary transaction into a memorable rite of passage.

Instead, their adherence to “policy” destroyed my limited goodwill towards AT&T, will compel my son to switch carriers in a few months when his contract expires and will propel me to examine Verizon as an alternate service provider when my contract expires later this year.

The cost of their insistence that nothing can shake them from “our policy”? In addition to my personal enmity and determination to inform as many people as possible to their miserly and miserable customer service, when I shift my service to another provider, they will lose thousands of dollars a year on voice and data from six different devices.

Because it’s my policy to cease doing business with inflexible, short-sighted and uncaring companies.

Exactly one year ago today I wrote that you could put a fork in Motorola. They were done.

At the time, Motorola was reeling from a string of lackluster phone releases that failed to generate any consumer excitement, their product designs were uninspiring and their engineering and development staffs were incapable of developing innovative products for the half-dozen different mobile operating platforms that they supported.

They’d lost their design mojo and appeared unable to recapture any Wow! factor.

The New York Times reported today that their new CEO, Sanjay Jha, has bet the company’s future on Motorola’s newest iPhone combatant, the Droid. And the early buzz indicates that the Droid may very well save the company.

How did Jha design a company saving product strategy that you can apply to your business?

1. design a better experience. The single biggest complaint about the iPhone is its lack of a real keyboard. The Droid offers a thin keyboard that slides out from the phone, thereby resolving the iPhone’s most glaring weakness and instantly appealing to thousands of users who love the iPhone concept but could not live with its touchscreen keyboard. Instant win.
2. personalize the experience. There are now more than 100,000 reasons why the iPhone is so popular with its users: applications. Every user has personalized their iPhone with the apps that complement their lives. Every user’s iPhone is unique to them, and by adopting Google’s Android mobile platform, the Droid has access to a growing library of Android apps that will allow Droid users to create a uniquely personal device that can’t be replicated on any other platform.
3. create a sensory experience. Although Motorola was known as a design innovator, they haven’t introduced a compelling product design for several years. The Droid changes that. Jha understood that the visual aesthetic and the tactile sensation of holding and using the Droid was crucial. Motorola smoothed some hard edges and covered the back of the phone with a tactilely pleasing rubberized coating. In addition, they’ve incorporated a larger, 16:9 hi-res display that delivers a compelling visual experience. Overall, it’s a sensorial delight.
4. create a WOW! experience. the Droid is being released with a new navigation system from Google that has amazed the early reviewers. It’s the kind of killer app that can generate huge volumes of sales on its own since it replaces the need for in-car navigation systems. It’s visually exciting, it’s instantly understandable and it delivers exceptional value. They captured Wow!

Apple has retained its position at the top of the smartphone heap for over two years. Challengers have been easily dismissed. Until now. And if Motorola can continue to focus on designing and delivering exceptional user experiences, they may very well challenge Apple’s dominance.

Any iPhone users thinking of making the switch and betting on the Droid?

I simply can’t be the first to notice Microsoft’s repeated, laughable and impotent attempts to produce consumer electronics that appeal to anyone outside of the Bill Gates compound.

Quick, do you know anyone who has a Zune? Have you ever even seen one outside of a Best Buy? When was the last time you overheard someone bragging that they waited in line four hours to nab the latest Windows Mobile phone? Hell, even Melinda Gates admitted that she privately coveted the iPhone.

The list of Microsoft failures is long and illustrious. Walk with me down the memory lane of Microsoft product tragedies, which include the Microsoft Origami (their lame and ultimately aborted attempt at an UltraMobilePC), a five year headstart in developing a mobile phone platform that has generated viral buzz and consumer anticipation for…. well, none that I can recall, and, of course, the aforementioned Zune, whose sales are rumored to  approach triple digits. Total. Worldwide. Way to go, iPod killer.

Given this unrivaled history of corporate ineptitude, what’s to explain the huge headline in today’s WSJ, spanning nearly the entire page – Microsoft and Verizon Plot an iPhone Rival?

Are the loud guffaws and giggles from Cupertino disturbing your reading?

It’s not difficult to guess what will emerge from these high-powered strategic confabs between Microsoft and Verizon. Both have watched as each company’s nemesis rode the cresting wave of popularity and iconic status of the iPhone to unimagined commercial success.

Verizon is still wallowing in the regret of turning down Apple’s initial offer of exclusivity. And Microsoft remains stubbornly, and almost endearingly, steadfast in their commitment to Windows Mobile as the preeminent mobile platform. Which makes them the perfect partners to develop an imaginary mobile device that will do everything the iPhone does… and more!

They will combine forces to produce a brilliant, almost legendary, product spec that includes an unheard of, amazing feature set for a touchscreen phone, including everything that the current iPhone lacks. Video? Check. Cut and paste? Check. 5 MP camera? Check. Stereo Bluetooth? Check.

Excited yet? It’s the phone that does it all. That has every feature that any user could ever want. On the nation’s most reliable network. What could possibly go wrong?

It will suck. It will perform 486 functions in ways that drive the user crazy and simply reinforce Apple’s dominion in the mobile world.

How do I know this? Because neither Microsoft nor Verizon has ever delivered a consumer electronic product that incorporates thoughtful and creative design in ways that delight and amaze their customers. It’s not how they think or how they work. While they focus on the current iPhone as their target, Apple is focusing on remaking the iPhone entirely, on designing user experiences and handheld capabilities that emerge from their fecund imaginations, not from a strategic planning session that will likely produce Verizon’s own mobile Vista. Now that’s something to look forward to.