Verizon’s “convenience fee” is more than just a stupid mistake, it’s a symptom of how unsustainable business has become.
A quick summary: Thursday Verzon put a $2 fee on customers who pay their bills with a credit card one-bill-at-a-time. While this move targeted very specific customer behavior, there was a general outcry on social media. Between the outcry and an FCC investigation to the move, Verizon backed off the plan in just a day.
A New York Times article today wondered why they didn’t just “ask customers what they’d think”. Really? The author makes a good point though. What they should have done was explained more about what they were doing, why they were doing it, and who would be affected.
It’s affecting everything. A couple of years ago there was a big scandal in the UK because the government was (essentially) cheating on expense reports.
I’m off point. Maybe I’ll get back to that, as I think we assume companies have the transparency they need internally. (They don’t. In fact, most times they have the data but don’t/can’t use it the way they’d like, and we think they should. That’s fueling the trends around data analytics, master data management, and complex event processing.) Wouldn’t it be great if they simply sent a good explanation to all customers who would have been affected by this change based on their payments for the last 3 months, explaining the situation and helping them avoid any fee in the future? That’s too much effort. What I see in what happened is lazy business. Companies do something that’s relatively small in the big picture, and get away with it because it’s too hard to fight. This has been accepted because customers haven’t had a voice to wonder out loud.
Personally, and I have no special knowledge of the situation, I think some team in Verizon had an internal (performance/cost) number to meet, and thought this would be a good way to do it with minimal service disruption.
Is there so little slack in the system that Verizon needs the money from this fee?
Individual credit card payments are more expensive for them to process. If you spin this well, they were simply trying to ensure that customers who did not need the flexibility of paying month-by-month with a credit card, didn’t have to pay for the priveledge.
Isn’t that what the airlines said about paying for baggage? When the airlines started charging for bags, they didn’t lower fare prices. They said, to avoid a general fare increase, we’d rather that people who use a service pay for it. Therefore, if you don’t have bags to check you don’t pay for your bags to fly.
What’s the alternative for Verizon?
- They can raise everyone’s prices, or
- They can stop taking credit cards for individual payments
And, by the way Mr FCC, you do realize the IRS doesn’t take credit card payments for just this reason. It costs a lot to accept a credit card payment.
Why are these their options. Why can’t things just stay the way they are?
This, for me, is a burning question and something that fascinates me in the current business climate. (I probably shouldn’t have taken so long to get to this point; it’s the reason I’m writing this article.)
[pullquote]Last year’s “lets just push a little harder” level of work is this year’s standard.[/pullquote]
There has been so much cutting, in people, in service, I wonder how things don’t just collapse in on themselves. But, we’ve gotten so used to cutting, to squeezing. Last year’s “let’s just push a little harder” level of work, is this year’s standard. It’s like temporary cuts are all permanent, and companies are still looking for places to squeeze. Ask most white collar workers. We’re working more hours, under more demands, with less provided by the company to help us get our jobs done.
So why does Verizon need this fee?
Status quo isn’t good anymore. Companies are micro-managing their fiscal picture, and nit-picking the pleasure out of everything. The pleasure of being an employee, the pleasure of being a customer. All for what? Why? I don’t thing it’s an issue of greed. It’s an issue of priorities. Consumers want cheap, and vendors say yes because they feel that if they don’t someone else will. You can do cheap for a while, but it’s not sustainable. You can play the numbers, but if you’re not accepting reality the cliff you fall off is just higher when you do fall.
Prices are way up. Wages have been stagnant for years. Our businesses are unsustainable, and employees are unhealthily trapped in between it all — being the consumers whose consumption expectations are driving businesses, their employers, to keep cutting.
Verizon needs this fee because it’s one more place to squeeze, without accepting the unsustainable reality we’ve created with all the cutting that’s happened these past few years.
2012 is going to be very interesting, as I believe this is the year something significant breaks.
Happy new year.