Sprint truly sucks. Now for some reason my bill suddenly went from $75 or so to about $186. Wow, that’s kind of nuts considering at the same time my usage went DOWN to close to zero since I’m actually now using Blackberry service from AT&T. The most amazing part is (I can’t believe it’s true but…) I’ve been a Sprint customer since 1997. Yikes! That and 25c will get you 6 minutes of parking in San Francisco. Cheers!

Unreal: I have a little-used Chase credit card that had a small balance on it, that I ignored and then got a late fee and an interest charge. Not only was their site “activation code” nonsense malfunctioning thus meaning I couldn’t make the payment before, but they also were unwilling to credit the late fee etc. So I decided to close the account as soon as possible. Since the amount, although small, is accruing interest at 14% daily, I want to close it out as quickly as possible.

I proceed to have a ridiculous call with their customer service, who:

1) Cannot tell me what the actual current balance on the card is, including interest that has accrued since the last statement day.

2) Cannot make any facility for me to pay the full balance (which they “don’t know”, and can’t calculate even though it’s possible to calculate… interest calc isn’t that hard people!) over the phone with them and

3) I go to the website to pay off the balance, the max payment is the full statement amount; it doesn’t tell me the current amount outstanding but won’t let me pay any excess. If I try to schedule a second payment it ostensibly will allow that, but only if I haven’t made a payment in the last three days…

apparently the ONLY way to pay the full amount is to estimate it yourself, then mail them a check hoping that it will get there in a timely fashion vs. doing it online.

Clearly this all adds up to ways to charge consumers additional interest. The total dollar amount of this issue for me is de minimis, but when you add this type of stalling tactic up across hundreds or thousands of accounts, it becomes significant. I shouldn’t really be surprised though: greedy corporations (partially driven by increasing investor demands for higher returns) need to pull out “creative” solutions like these to continually increase the bottom line.

The Financial Times has a great comment piece today about how backward US supermarket chains are. I couldn’t agree more — it boggles the mind, really. It talks a bit about how the FTC is blocking the proposed Whole Foods/ Wild Oats merger because

“The FTC reasoned that “premium natural and organic” supermarkets operated in a separate market from ordinary ones.”

They really don’t — and the big guys will continue to see market share drip away as they have trouble meeting the needs of more health-conscious consumers. Crazy nonsense isn’t it? The problem I fear is that this shift is going to take a lot longer than it should - and in the meantime it means higher prices, less good (better) food and missed opportunity.

I went to the Whole Foods Market in San Mateo, CA today and noticed something I’d not really noticed before and was wondering if this is a chain-wide initiative or just confined to this store: all the cartons of milk were turned so that their expiration dates were not visible to the customer unless you turned the particular carton around.

This was odd and I don’t recall seeing this done at a supermarket though I may be mistaken. I know obviously that convenience stores and supermarkets actively “rotate” milk when they stock new supplies so that the older milk is always near the front — and naturally I often try to reach back and get a newer carton when I can. Often if the store is high-volume and I’m not going for a very specialized type of milk, the expiration dates are all the same or not very far apart. It seems that sometimes people run into milk issues such as this Yelp posting on the Palo Alto Whole Foods Market.

But coming back to my experience, I’m curious if others have seen similar tactics employed at WFM or other chains? It also makes me wonder about what other types of rotation tactics are used in grocery stores that we don’t pay as much attention to… I don’t know if anyone has written a Kitchen Confidential for the grocery store business but I wouldn’t be surprised to learn of a few less than savory happenings that go on..

My wife and I received two checks in the mail yesterday, each for $13.86 as part of the CD Minimum Advertised Price (MAP) Settlement. In the case the plaintiffs (43 attorneys general) allege that the Defendants (music biz) conspired to illegally raise the prices of “prerecorded Music Products by implementing Minimum Advertised Price policies, in violation of State and Federal laws”. Naturally the “Defendants deny all claims of wrongdoing asserted by the Plaintiffs”. I vaguely seem to remember sending back a letter opting into this settlement, which was reached between the attorneys general of 43 different states and the major music labels, retailers and distributors. I was curious how many people actually filed and have got their checks for $13.86 since the settlement class is huge:

You are a member of the Settlement Group if you are a person (or entity) in the United States or its Territories and Possessions who purchased prerecorded Music Products, consisting of compact discs, cassettes and vinyl albums, from one or more retailers during the period January 1, 1995, through December 22, 2000.

And looking at the website, it appears you can calculate how many people did actually do this since:

The Defendants have agreed to pay a combination of cash and non-cash consideration. Defendants’ combined cash payments total $67,375,000. In addition, Distributor Defendants will provide $75,700,000 worth of prerecorded music compact discs.

… and it goes on to say that nobody will get more than $20 and the amount will depend on how many people opted in, after they take out legal fees and distribution costs. The CD part are to be given to non-profit groups etc. to distribute to the community (!) which sounds fairly fishy.

Which would mean that if you assume say 10% for expenses and check distribution (this is an antitrust thing so not a “take 30%” contingency legal shark fest, but you gotta mail stuff to everyone and we know how efficient that has got to be) that leaves you with $60.6mm in cash or $13.86 for about 4,375,000 people. So who else got these, where are the other 4,374,998 men, women and entities who shared in this bountiful cash fest?

In the Judge’s order it says how much the various plaintiffs paid into escrow in cash and this was back in 2003 apparently:
EMI - $6,500,000
Warner - $13,650,000
Universal - $18,850,000
Sony - $12,523,500
BMG - $12,776,500
Musicland - $2,000,000
Tower - $275,000
Transworld - $800,000

The non-cash consideration is separate. I guess that this is really old news (3 1/2 years old) but the checks are only now reaching us — the gears of justice move slowly don’t they — but this is an intriguing exercise in “see what you can get away with for how long”. I would guess that the profiteering and real cash extracted by some of these companies over the years using policies like these is way way way in excess of the amounts trickling down to us consumers, $13.86 at a time. But hey, it’s the best settlement check I’ve gotten so far, better than that Sprint $6 statement credit from last year, even though I’m sure it won’t be the last check or credit I ever get!

On the road in New York. My but NYC hotels are very expensive in December aren’t they — funny when the airlines are heavily discounting and then the hotel room for 1 night is 3x as expensive as the cross-country flight. Crazy. I shared the elevator with an English group who asked me, dressed in my sports jacket, if I was enjoying my holiday. Not quite, guys, but a nice thought. Everyone wants to see the Rockefeller tree and lights I guess and are willing to pay a nice premium to do so!

My thought with this post was actually that it’s always a new learning experience figuring out which way to turn the shower faucet- left or right? How far? It’s a really annoying learning curve to have in the early morning when you’re off on timezone by a few hours as well. Wouldn’t it be nice if there were a standard interface or two for these types of items - kind of a Windows and Mac bathroom OS? I am all for variety in things, and you don’t have to do it for the high-end or vacation hotels, but surely there’s a bit of room for some time and sanity-saving standardization in the business-hospitality industry? Oh and the other thing someone told me on this trip is to always ask for the “American Bar Association” rate when you call up the hotel directly and you’ll get a great rate (apparently he’s never been asked to produce anything at the hotel in many years of doing this). Ah, yes anything to keep the travel interesting haha.

Companies that swim against the current of online information-empowered consumers are doomed to get a significant amount of egg on face, if not in the very short-run, then much sooner than many might think. That’s why when I read this TechDirt posting about BestBuy’s attempt to stop people from posting about their prices is surprising and a bit upsetting. Here’s the original posting on arstechnica about Blackfriday.info.

Come on guys, you don’t have a legal leg to stand on, you’re going to create negative publicity and heaven forbid as I’ve written about recently you’re actually going to have to start thinking about smarter promotions online and offline, and not just about employing your standard grab-bag retail tactics like loss-leaders. Trust me, Best Buy, you’re still going to be able to get the consumer who goes in on Black Friday and says “oh my god, Planet of the Apes DVDs for $19.99, one per person - come on kids, each grab one!” to help you out. And yes, this actually happened at a store I was at in Southern California - not really that surprising given all this PS3 madness, is it? BTW Online and multichannel pricing consistency has also been an issue for many years but now we’re at the point where inconsistencies are going to be shown up very quickly, blogged about, escalated and sometimes even flow over into mainstream media - here’s an example from way back in 2001 I remember chatting to CNET about.

I stumbled upon a website this evening that was being advertised (site-targeted Google ad) on LinkedIn and I suspect doing fairly well on a response-rate basis — Babysitters.com.

This is a great example of where an aggregator adds a lot of value: fragmented sellers, few existing offline sources for finding these folks, geographical aggregation possible but additional selection criteria present too (like availability, specialties), lots of ancillary consumer-created content, ratings and so on… and also it layers on top of a very rich browsing experience an “access/contact model” where the user has to pay to get in touch with the babysitter. The summary points of this report I wrote 6 years ago for Jupiter discuss some of the important elements of what I dub “Meta Networks” and how they will come to predominate in online commerce (and I’m pretty satisfied that many of the things I wrote have largely come to pass in many respects).

What’s interesting though is that when you like to the report (which I searched for on a lark and just wanted to see if any of it was publicly available — looks like just the headings and my 7-year old picture) - you will see that you may “purchase this report along with a half-hour conversation with the JupiterResearch analyst who wrote it”. Hmmm now that would be a neat trick. Unfortunately I think I’d have to collaborate with Jupiter on this one since I no longer work for them, but I have to say that I don’t think my old report is worth $1,500 anymore - and my charge for a 30-minute conversation is not cheap but certainly quite a bit more modest than this [and hopefully also quite useful!].

I have been fairly happy with Comcast’s cable internet service, but of course after the promotional period it is now quite expensive. I have received a few mailers from AT&T (the old SBC) about their DSL service and saw some interesting rates in a mailer and wanted to go to the website to see more information / potentially sign up. We won’t discuss how their promotional $12.99 rate doesn’t explain on the mailer that it is for a barebones 1 mbps service - in fact it says the “pro service” is a more expensive $17.99 so I figure that would be the standard 6 mbps service but actually when you see the pricing online there’s another level that isn’t mentioned on the flyer that is $27.99 for 6 mbps. So that’s pretty sneaky but effective marketing — it will at least get consumers including me to the website. Also, the mailer does make a point of saying that if I were to sign up over the phone it will cost me $2 more per month. So I dutifully go to att.com/choice and am prepared to offer my mailing code as well.

Yikes — that’s where it gets stoopid. The site I’m greeted by not only asks me to enter my mailing code but also to say what state I’m in and what team I would like to select (???). The site has a sports theme, and makes a continuing annoying background noise. This online marketing offline-to-online thing isn’t new fellas, haven’t we learnt our lessons yet?? Not only that, but when I go to the next page there is no mention of the offer on the landing page. I actually have to find a not-easy-to-find “high speed internet” logo and click on it in amongst some weird blimp/sports theme before I get to a page with the pricing and small icons that almost apologetically beckon me to sign up.

Absolutely no retention of context from the mailer to the website, confusing all the way around and people not as determined as I am would certainly not make it to the offer page. My advice: spend about five minutes online to get some lead-generation best practices, and stop wasting your money on creating good direct mail pieces until your website conversion process is a few notches above crap.

Current and predicted problems among mortgage lending insitutions that specialize in subprime credit portend (WSJ, sub) broader credit and lending problems to come. When the poor credits start showing some problems in making their payments, some mortgage holders with higher credit quality may soon also find themselves in a pickle, especially those pesky option ARM products. The Journal article also discusses how the qualification criteria for some of these more exotic flavored mortgage products are somewhat opaque and may be subject to errors such as Washington Mutual recently disclosed, where:

“WaMu confessed it had bungled the underwriting for option ARMs, improperly measuring some of its customer’s debt-to-income ratios for 2004 and most of 2005. As short-term interest rates rose in those years, the company disclosed, the interest rate at which lenders qualified for loans “was not adjusted upward, which resulted in loans being made to borrowers who were qualified based on debt-to-income ratios calculated using an interest rate below” the prevailing interest rate.”

When someone reputable like WaMu makes a mistake like this (they say it doesn’t have a material impact on their business), you can only imagine some of the surprises lurking among the rest of the players out there…

Added: Jeff Saut (Raymong James) writes on Minyanville at length about this issue with some additional context. He also quotes the Barron’s article (sub I don’t have) that references WaMu’s annual report’s figures on negative amortization which are worth repeating here considering where housing prices have been headed.

“At the end of 2003, 1% of WaMu’s option ARMS were in negative amortization (payments were not covering the interest charges, so the shortfall was added to principal). At the end of 2004, the percentage jumped to 21%. At the end of 2005, the percentage jumped again to 47%. By value of loans, the percentage was 55%.”

Last weekend’s LA Times article about the coming “statement shock” for adjustable mortgage rate holders alludes to what may be a dark and gloomy 2007 for consumers, especially those who have option ARMs or similar products and have been making minimum payments. According to the article, many lenders are warning (ha!) consumers that based on their amortization situation they could face mushrooming payments in the near term. The article concludes with Countrywide’s advice to its customers on things they can do to avoid this (quoting article):

• Switch out of the minimum payment option if they can; move to either a 15- or 30-year standard amortization plan.
• Switch to an interest-only option if full payments are not feasible at the moment. At least interest-only payments would not result in still-higher principal debt balances to pay off later.
• Explore alternative refinancing options sooner, rather than later.

Of course what this adds up to is a potential bumper crop of refinancing opportunities for the lenders; and probably less pain for consumers than if they were to try to retain their current mortgages but for these consumers there will be pain aplenty. What it will mean, however, is that a lot of people go got into homes at the inflated home prices of the past few years especially new buyers, are going to be in a very difficult position with very little margin of error. What could be nice for lenders comparatively speaking (as interest rates have risen over the last year and a half they’ve faced a lot of pressure and far less volume then the refinancing boom brought in recent memory), could have a very chilling effect on the rest of our economy.

Many of us work and live in high-stress environments where things are constantly changing, we’re faced with more tasks to be done with fewer resources (that’s what economists mean when they say “productivity increases” BTW hehehe) and also we’re in the midst of larger macro changes and shifts that are amplified by media that many would argue have created a true “culture of fear” in the US especially. Let’s set that particular rant aside for a second. One of the things I’ve really found to have a profound effect on my wellbeing and health is Network Spinal Analysis. At first it was introduced to me as a variant of chiropractic, but it really is a lot more than that. My wife is very involved therein and since I see a lot of my peers and business partners continue to be super-stressed out (etc) I’d love to refer anyone over who is looking for a way to feel and perform at their best. Check it out, it’s really really amazing!

Netflix penalizes its customers for returning their movies too quickly. It seems a bit unfair, this practice they call “throttling”. The “firing customers” debate refers to the old debate about whether there are certain of your customers you should just fire or get rid of because they utilize too much of your customer service resources. At some point, do you just cut bait?

One of the problems with this, is that in the Internet blog-forum/feedback world, a single customer can cause you a lot of problems by sharing negative feedback about your brand with all and sundry online. And sometimes these reports get picked up in the press as well (like the above) which can spiral out of control since the average customer wonders “can it, will it happen to me”? Even when a company’s actions make perfect sense, anything that indicates the company will be anything less than fair or even handed (remember Amazon trying to charge different prices for the same DVD to the same customer? or Coca Cola changing the price of Coke from the vending machine based on how warm it is?).

Price (and service) discrimination will be even more of our technology-fueld reality, so we should start thinking about how we deal with this, both as marketers as well as, as customers. Is this “fair”? Should we boycott companies who treat some customers like this, or accept that they’re able to offer us a cheaper product if they refuse or cut off service to some of us?