Businesses behaving badly

Peter Seebach ([ behaving badly] Freelance writer 4 March 2004

Abstract: This month, The cranky user looks at user reactions to common problems with user interfaces and corporate policies, and how these reactions can make some common business decisions counterproductive. When it comes to inconveniencing your customers, and sometimes even offending them, are some sales tactics worth it in the long run?

For every action...

there is an equal and opposite reaction. In his third law of physics, Newton refers to forces that result from interactions between two physical objects. This law, interestingly enough, also seems to apply to human behavior.

Consider what happens when I receive an unsolicited e-mail from a company: I stop accepting e-mail from them; my reaction is based on their action. If a company sends e-mail to multiple people who don't want it, the company could end up on blacklists (say, on an ISP local list), causing great numbers of people to stop accepting the company's e-mail. Larger action, larger reaction.

When a customer service representative is rude to a customer, the customer in turn is often rude to the company in ways that can be detrimental. For example, a customer service rep one of the huge software companies hung up on me because he didn't want to locate the phone number of the appropriate department. I became a lot less interested in tracking down the right person to resolve my questions about licensing.

Most companies want their customers to think well of them; it usually guarantees future business with those customers. To make this happen, business dealings with customers must be pleasant; otherwise, companies risk turning customers away. I can't force Infogrammes/Atari to return my money for a game that won't run on my laptop. They insist only the retail store can give refunds; the retail store says that Atari prohibits them from accepting returns. I can't make sense of it. I can, however, stop buying from them. They don't provide value to me; I don't provide value to them. Action, reaction.

Privacy matters

Privacy policies are perhaps the most clear-cut example of the action-reaction scenario. The more a privacy policy restricts my ability to control information sharing, the less information I will offer that company. For example, if a company refuses to ask my permission to send e-mail to my account, I won't give them a real e-mail address. One software company used to brag about having a list of 53 million e-mail addresses. However, a large number of those addresses were fake because people knew that company harvested e-mail addresses and so refused to give valid addresses.

Privacy is a hot-button issue for many people. Unfortunately, companies with borderline business models often can't function without having atrocious privacy practices. I've encountered many companies that never sent spam until they were threatened with going out of business. It's a desperate act and a dubious one as far as improving sales goes; the effect may ultimately drive more customers away.

In the end, it's simple: if you violate trust, people stop trusting you. Many people keep records (some mental, some documented) of old abuses and aren't afraid to share them. I still have copies of Usenet posts defending one online seller's privacy practices. These were posted anonymously through DejaNews, though, which at the time was this particular company's IP space. I still don't shop there five and a half years later (because I think the support of their practices was obviously biased and deceptive). People actually do have long memories.

Reliability keeps customers

The explosion of customer rating sites that review everything from cars to computers to the companies selling them serves a valuable function: the sites can identify scams. Businesses with unethical tactics continually reinvent the scam. The idea is simple: Sell something cheap at a high price to make consumers think it's better than it is.

Of course, people eventually catch on and, indeed, stop buying even the quality products a dishonest company makes. It's amazing how quickly a company can acquire a reputation for shoddy products. The once clever idea to cut corners quickly turns into a noticeable decline in sales. Companies that consistently get bad reviews often fail, with the help of these sites and the educated consumer.

If your company cuts corners on shipping, product fulfillment, or any other part of the customer relationship, it won't be long before you lose your customer base. Few people return to a company whose products have previously proven poor in quality.

This applies to services too, not just physical products. Poor customer service can be just as harmful to your consumer relationship. If a company won't respond to my questions, I stop asking them and take my business elsewhere. Nothing says "This company doesn't care about you as a customer" like an incompetent and unpleasant service representative. This adds a twist to my Newtonian human behavior law: For every inaction, there is an equal and opposite lack of action. A company won't support my requests, so I won't buy their products.

Horror stories

Monsters, like vampires and ghosts, are boring when compared to corporate incompetence and dishonesty. That's what really gets your heart pounding! Not a day goes by without one friend telling me about some corporate malfeasance. Problems installing software, order confirmation errors, spam -- you name it. When I spend an hour on the phone with some company trying to get a straight answer to a simple question, my friends hear that story while I hear theirs. And yes, we name names.

In a way, this defines an important difference between customer relationships and Newtonian physics. The reaction isn't equal; it's magnified. The company that used a bait-and-switch tactic to try to charge $80 extra for a Pentium IV CPU has since lost thousands of dollars in sales to my friends and me.

Companies often overlook this. It's easy to say "Yes, we annoyed him, but he's just one customer." I'd guess every company whose exploits have graced the pages of this column figured it was no big deal. I'm just one customer. You can always get more. Of course, many customers don't bother to complain to the company; instead, they vent to their friends -- other potential customers.

Understanding reactions

Customer reactions are hard to predict. The problem generally comes from a lack of interest (or research funds) in learning what people need or want. Some companies that spam often don't test whether it works in the long run. But even when they do, it's difficult to determine how customers will react in real situations. A senior person at one company told me he had estimated that the returns from spamming their customer base without permission justified any harm that was done. However, just by hearing this, I decided to take my business elsewhere. As a result, they lost about $10,000 over three years from just one customer. I did let them know this, and perhaps by coincidence, they don't spam anymore.

Companies commonly fail to consider how their decisions affect their customers. One of the most hated interface design decisions is the Web form used for contacting a business, a process formerly conducted through direct e-mail. I find it especially annoying when I click on the link labeled "e-mail customer support" and get a Web form instead of an address. Chances are direct e-mail addresses were removed in response to the support staff receiving spam. However, no one thought to ask "Will users absolutely hate this?" And sure enough, most users hate it.

Whenever you change your policy or behavior, stop and think about how users will respond to it. Sometimes offending a customer is not worth the minor convenience a business gains from a new method. If the customers leave, they stop giving you money. No customers, no business.

This week's action item: Ask people you know whether they refuse to do business with any companies and why. Search on the word "boycott" to discover the amazing number of boycotts that exist these days in many industries. How many of these offenses does your company commit, too?


About the author

Peter Seebach is a freelance writer who's participated in the e-business game for years and just wants everyone to play fair. If you have comments, feel free to contact him at []