Thursday, September 13, 2007

Clarity is Everything

The New York Times ran a story about iPhone owners being hit with unexpected data charges after taking their phones outside the US - to the tune of $3,000 in one case. While I'm not overwhelmed with sympathy for anybody here, I do think it's ultimately in AT&T's best interest to have customers not hate them, though they do seem to always be trying to achieve just that. And often clarity about charges is more important to customer satisfaction than the charges themselves.

In some cases, the problem was that when you turn on your iPhone after getting off the plane for your fabulous trip to Paris, it starts checking for email a couple of times an hour - incurring a roaming data charge each time. I would never have thought of that - not having set up an iPhone, I don't know how obvious it is that this is what's going on. Still, it seems that it would be pretty simple to have your phone beep at your and warn you when it finds itself away from its home network, so you could tell it whether it should be continuing to check for mail as if you were in the US.

(As an aside, though, do people really like that feature? I got a Samsung Blackjack this year, and I consciously chose not to use its email capabilities. I want to be able to check that when I want to see my mailbox, and I do that via webmail (through Google, optimized for a mobile device). And when I don't want to look at my email, I want it to leave me alone. The idea of my phone letting me know I have email every ten minutes seems incredibly irritating to me, not to mention a high-speed ticket to becoming a Crackberry sociopath no one can stand to have lunch with.)

Some of the unhappy customers, however, were just upset by how international roaming is priced:

Dave Stolte did that before taking his iPhone with him on a two-week trip to Ireland and England in July. He signed up for a roaming plan, but he said the customer service representative’s explanation of the charges was unclear. His bill was $3,000.

When he was offered a $100 credit, Mr. Stolte said he felt insulted, and he sent letters to the chief executives of AT&T and Apple. The story of his bill quickly spread around the Internet. Before long, he was given a full credit.

“I can’t imagine AT&T would expect all their customers to be technicians and say, ‘O.K., if I go to use Google maps, how many kilobytes am I transferring?’ ” asked Mr. Stolte, a Web designer who lives in Temecula, Calif.

I share his frustration; AT&T's international roaming rates are exorbitant, and the "roaming plans" just give you a small discount that makes them slightly less of a rip-off. And, as his comment points out, the whole model is flawed; most people will have some sense of how many minutes they've talked, but how much data they've downloaded? Who really knows?

AT&T profits from this confusion, of course, unless customers go out of their way to find alternatives. (Because I spent a lot of time in Europe last year, I got my phone unlocked and bought a French prepaid SIM card, giving me a French mobile number and reasonable rates for calling within Europe. And, in fact, for calling home; it was cheaper to call home on my French phone than to put the US SIM back in the phone and use my AT&T account. But it was a pain, and I would happily have paid AT&T a bit more than I wound up paying to Orange to keep recharging my account for the benefit of simply using my own phone and having my own US number. Not to mention not having to navigate a French voicemail system.

So there's AT&T's approach, which is make pricing as unclear as possible so that customers wind up paying you more than they thought they would - minus, of course, the refunds you give to the loudest complainers who get their story picked up on the web. But what if they tried the alternate approach - created an international package that customers could easily sign up for, perhaps for just a month for a planned trip, that might not be the best bargain but that would let them head overseas knowing what using the phone would cost them?

I think you'd have happy customers, and until other carriers followed suit you'd have a chance to become the preferred mobile carrier of the traveling set. Your customers would be happy with you and appreciate the simple billing. And I'm sure you could price it to be profitable - perhaps not as profitable per minute as the "confuse 'em and reach for the wallet" strategy, of course. But looking at the lifetime value of customers, perhaps it would actually be a better for the bottom line, as well.

I'm not holding my breath; AT&T's merely the worst offender in an industry where opaque billing practices and confusion charges are written into corporate DNA. But perhaps some upstart will come along and upset the mobile telecom balance, to the benefit of traveling Americans.

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