Although this post is not directly related to innovation, it relates to the stifling of innovation, and how not to treat your customers.
Background : In New Zealand Telecom is the dominant ex-govt telco. Even though it is now privatised, it has fought tooth and claw to prevent regulation which would force it to unbundle the local loop, thereby allowing ISPs to compete on an even field for broadband offerings.
In March the CEO of Telecom was recorded at an analyst briefing saying that telcos created confusion via their marketing plans in order to prevent customers making direct comparisons on pricing plans. That it itself was an interesting admission for a telco CEO, and one that Virgin Mobile in the UK made the most of when it stormed the market with simple pricing plans.
That audio clip made it’s way into a video mashup, which mixed the CEOs comments with clips of Telecoms own advertising. Needless to say, the message was less than complimentary. The clip went viral very quickly with over 35,000 views on YouTube and Google video before Telecoms lawyers went to work. By the way, following this link under the ‘2006’ section on Wikipedia will point you to the new clip location.
So what’s interesting about this?
1. Telecom basically admitted that it actively creates customer confusion in the market. There’s an opportunity here for an innovative company which talks to customer in plain English.
2. Customers are so annoyed at Telecom, that they take that message and repackage it before sending it out to a receptive audience. They don’t bother to use the old channels, but make use of new web tools to get their message across.
3. The message is very well received by other annoyed customers, and even makes it onto national television news.
4. Telecom, obviously not quite learning that the rules have changed, send it’s lawyers after the clip.
When will a company like this – and those like it – realise that the ground beneath their feet it moving. And despite what they might try and tell you, it’s very hard to fight an earthquake with lawyers.