Thanks to the advancement of the Web, it is possible for anyone to share their experience with the corporate world – be it positive or negative. Many of my posts in the past have focused on the positive, but sadly it is time to turn the table.

Last week, we received the monthly cable/Internet statement, but this time something was different. Cogeco, a Canadian telecommunications firm, had charged us $31.50 for exceeding our bandwidth limit by 40.74GB in October of this year. I scrambled to the Internet usage section of the Cogeco Web portal to see that the statement did match their records. What was more interesting was that the usage did not fit our bandwidth patterns. For instance, in August of ’09 we used 37GB with 31GB in September, 100GB in October and 50GB in November.

Earlier this year Cogeco instituted an automated service that would send email warnings to customers as they reached both 85% and 100% of the monthly bandwidth cap – in May we received such a warning regarding 85% so we adjusted our usage to accommodate. I should note at this point that in May the online bandwidth monitoring tool was not functional. While I am personally against bandwidth caps, I think that such notifications are a realistic necessity for implementing a bandwidth cap. Unfortunately, after going through old emails, no notification from the month of October was found.

Let’s move forward to today, December 3 2009, when we called Cogeco support to dispute the charge as the October overage did not reflect our monthly pattern nor were we notified. The agent was firm in stating that there was nothing that could be done as it was our responsibility to monitor the bandwidth. Furthermore, we were unsuccessful at convincing the agent to let us converse with a supervisor regarding the matter.

While I respect the firmness of the agent, I see a few fundamental business mistakes in the approach:

Loyal customer. We have been loyal Cogeco customers for 11 years with both high-speed Internet and cable service subscriptions throughout our tenure. At the moment our monthly bill is $123.94, but let’s assume we have had an average bill (conservatively) of $100 over the 11 years. This represents $13 200 in revenue to Cogeco over that time period. Surely the agent must have known our tenure and the number of services we use from the telecom firm.

In fact, we have been on the fence with adding an additional service, Cogeco Phone, which would add an additional $39.99+ to our monthly bill.

Internal education. The agent repeatedly said that nothing could be done in regards to the charge. Anyone with that has either worked in a call centre or has business experience always knows that something can be done. If the agent could not do anything to further explain the situation, they should have passed the call onto someone more experienced with such an issue – perhaps a supervisor.

Beware of churn. Throughout the conversation with the agent, we said that if this is how they treat their loyal customers we would have to consider switching both of our services to Bell. One of the basic principles in business is that it is far more cost effective to maintain a current customer than gain a new one. Does Cogeco really want to lose our business over a $31.50 charge? Additionally, in the telecom business it is not only that one firm loses a customer, but that a competitor will gain one.

Fun fact – my employment at Bell, a direct Cogeco competitor

I worked as a product analyst with Bell Internet (then Sympatico) with much of my work focusing on bandwidth analysis. While we were concerned with bandwidth usage, we rarely pursued action against customers unless they were grossly abusing the service. Say, downloading more than 1TB on a 60GB/month plan – even then it was generally a warning the first time. *Please note that I am currently note employed by Bell and they very well may be charging for bandwidth overages regularly now*

Additionally, when call centre agents conversed with customers over billing issues the ARPU (average revenue per user) and years of continual service were always present so that the agent could determine how important that customer is to the business – essentially, a measure of loyalty. I firmly believe that a $31.50 charge would have been quickly dropped by other telecoms.

What should have been done. If I were a manager/director with Cogeco involved in implementing bandwidth overage charges I would have focused on notifying/educating first-time offenders. Rather than charging those that exceed the limits the first time, notify them on the monthly statement that they could have been charged $xx.xx for going over the limit by xxGB, but that the charges will be dropped as this was the first time going over.

At this point I would like to say that I am aware that some readers will ask why I am going this far over a measly $31.50 charge. Essentially, I have issues with their business practices regarding bandwidth caps. I have been on the other side before and there is definitely a better way to handle bandwidth limits. This is not a matter of $31.50, it is a matter of being a loyal customer with an very negative experience.

It is time that organizations understand that it takes a lot to gain new customers, but it takes very little to lose those most loyal. Cogeco, now is your time to make it right before it’s too late.