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.

Today Nintendo released an new portable game console, the Nintendo DSi. Nintendo is well-known for introducing three iterations of their portable consoles – we had the Gameboy, Gameboy Colour and Gameboy Pocket followed by Gameboy Advance, Gameboy Advance SP, and Gameboy Micro – all leading the way to the Nintendo DS generation of systems. The original Nintendo DS was launched in the fall of 2004 with the Nintendo DS Lite appearing in 2006 with a smaller design and better battery life. Now, in 2009, we have the Nintendo DSi – a much more feature-rich portable, but at a higher cost. The DSi has been introduced at a price of $200 CAD while the DS Lite will remain at $140 CAD, where it has been for some time – are the new features worthy of the extra $60 and what has provoked Nintendo to choose this price point?

The DSi has new features such as the ability to play downloaded games and DSi-only games (to come in the future) along with new hardware features such as a second camera and larger screens – for a more complete list check out About.com’s comparison. I have been reading a lot of postings and commentary about the DSi and I would have to say that a lot of people think the system is great, but definitely not worth the extra $60. Arguments against paying the premium include the poor quality of the cameras, the lack of a Gameboy Advance slot, no exclusive DSi games at this time, and poor battery life. Nintendo may have been hoping for a lot of hype, similar to what the Wii received, however, it the North American launch has been largely uneventful with units still available at many retailers.

So now we have Nintendo selling two portable systems, the DS Lite and the DSi, both of which play the same games, but have a relatively large price difference. Undoubtedly the cost to build the DS Lite has decreased substantially over the last couple of years and the cost of adding these extra features was probably quite low so why sell at a such a premium? Let’s forget this for the time being and switch to a company that does things differently, Apple.

Apple has this uncanny ability to keep products secret until highly publicized announcements followed by almost immediate availability in mass quantities. The difference between Nintendo and Apple is that Apple releases new products with better specifications at an equal or even lower price than the existing product. The old products are then sold at a discounted price until there is no more stock. Apple introduces new products so well and with great success, so what is the deal with Nintendo?

In my opinion, Nintendo is not concerned about an initial surge of sales and prefers to have longer and more stable sales numbers throughout the life of the product. Apple introduces new products, it seems, a couple of times a year whereas Nintendo uses a life-cycle of two to three years. At $200, Nintendo will still sell a substantial number of systems to early adopters and fanboys, while other consumers just looking to play DS games may opt for the DS Lite – either way Nintendo will be generating revenue.

My initial viewpoint, before writing this piece, was that Nintendo is really missing an opportunity, but I now believe that Nintendo is trying to do what they do best – sustained sales over a long period of time. Apple’s ability to innovate and release new products frequently works for them and maybe the premium price of the DSi over the DS Lite fits right into Nintendo’s plan.

Play time: A year ago you had a brilliant idea for a new product, let’s just call it a widget. After much market analysis and product development your widget was released to the public. Perhaps it was released to great fanfare – perhaps disappointment. Either outcome lends itself to analysis about what is good and what is bad with the product. After all, every great product must have something missing, for at least someone, and every great disappointment hopefully had something right.

To determine the hits and the misses of a given product, including services, many companies will employ user groups, product testers, and feedback forms. These are all fine, but the Web offers managers a wealth of free feedback from customers across the globe – feedback that can help a company evolve a product to match user demands and expectations. Some companies, such as Dell, offer forums that allow users and employees to help each other through problems. Scouring these forums will yield both the good and the bad of specific products, but this takes a lot of digging and cross-communication. Now, how about using online stores, product review sites and even Twitter to collect product feedback? I will touch on how each of these three methods can help product managers collect feedback at no cost to the company other than time.

Online stores. I regularly purchase items online and when I do I often look for customer reviews about the product I am about to buy. Sites like Amazon provide plenty of specifications about a product, but I find that I often skip right to the customer reviews to see what other consumers like and dislike about the product. Chances are that many other consumers do the same thing and, as such, should companies not be taking these reviews seriously when it comes to collecting feedback and evolving their product? Hopefully they already are, but if not, these user-submitted reviews offer amazing detail on likes, dislikes and missing features.

Product review sites. These are the sites along the lines of Epinions and CNET Reviews that offer both professional and user-submitted reviews. Reviewers often offer detailed reviews of specific products and highlight product specifications that either make or break a given product. Often it is necessary to filter out some reviews that either are not relevant, contain spam, or are poorly written in order to find reviews that offer substantial value to the company. Just like online stores, this voluntary feedback can provide companies with the requirements to succeed with future iterations of any given product or service.

Twitter. I just had to mention Twitter again! Over the past few weeks I have been following both a product development and product marketing phenomenon regarding an upcoming videogame. Infinity Ward, creators of many Call of Duty videogames, has been using Twitter to request features for their much anticipated release of Call of Duty: Modern Warfare 2 this fall. Infinity Ward employee Robert Bowling (@fourzerotwo) has been asking fans of the series to request features for the upcoming release. By using the hashtag #mw2, Twitter users can submit feature requests directly to the Infinity Ward development team. Anyone can then vote up/down specific requests at Infinity Ward’s #MW2 page. Not only is this method generating many ideas for developer consideration every minute, it is also helping Infinity Ward hype Modern Warfare 2 by involving the community. There is no doubt in my mind that we will be seeing other companies duplicate this method of feedback – #RTideas anyone?