Is Unethical Advertising Sufficient Reason For You to Rule Out a Vendor?

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I raise this question after I walked out of a Sprint Store shaking my head and vowing never to do business with them again, once again. Look, we all know how aptly wireless carriers add on fees, buy try this one on for size.

 Advertised price from Sprint: $100/month for 4 lines
 Actual price: $213.70/month for 3 lines

The $213 did include $25/month for new phones, which they wouldn’t lower if we only got 2 lines. But all 3 of us have much better phones now, so we didn’t want their junk. Still had to pay the $25 bucks, even if we didn’t take them.

My question: Would you be reluctant to do business with Sprint in the future after that?

BTW – I was trying to get us out of Verizon charges I thought were unconscionable. Turns out they were only $7.00 over Sprint. But afterwards I marched into Verizon and told the agent we were leaving for Sprint they didn’t reduce our rates. The guy sweated for a while, then told me we could get a significantly better price if we “activated” the discount for phones out of contract. Would save us $40/month. Funny they don’t automatically apply the discount to our bills. Do you, my fellow Verizon subscribers, know about that?

8 COMMENTS

  1. Study after study of consumer behavior shows that vendor trust based on experience, as well as image and reputation, is pivotal in driving loyalty behavior. A vendor that violates trust, through false or misleading advertising and/or deceptive selling processes and plans, is unworthy of customer loyalty. As I’ve covered on multiple occasions, the telecom industry is one place where sales reps are often trained not to divulge that more attractive rates and plans can be obtained – – until and unless a customer threatens departure. Then, the sales rep will spring into action, because he/she knows that losing a customer will count negatively in performance reviews.

  2. yes, unethical behavior is reason to drop a brand. The problem with wireless is there are so few choices, and they know it. I had the same experience with Verizon. IT was the old “we can reduce your bill” instead it went UP. When I went back, all I got was a shrug. I’m stuck with Verizon.

    Not so with Uber. Deleted that app. Not so with BA. Never fly them again (or United). Not so with Bloomingdale’s, never shop there. We have choices and should vote with our money as well as with our words.

    You are right, customers need to fight back by calling out abusive sellers. Keep on writing 🙂

  3. Dick – I think there are lots of reasons to stop doing business with a vendor. Bad ethics is one of them. Also on the list, promoting a political or social agenda that’s antithetical to my point of view, and being rude.

    My top question is whether Sprint violated any laws in their promotional offer. That’s something to check out. Otherwise, lots of companies use ‘teaser’ offers as motivation to buy. We might not like them, but legal boundaries cover a tiny proportion of marketing activity.

    How many times have I seen a splashy headline for a low, low price, only to learn that it applies to first-time customers? Or, in my latest experience with carpet cleaning, let’s just say that the pressure to upgrade the incredibly low fee advertised in the newspaper with add-on services was quite high. “Oh, yes, Mr. Rudin, since you have a dog, your carpets NEED additional odor and stain-removal protection. Also, we charge extra for stairs.” Well, the ad didn’t say anything about THAT.

    Still, it’s hard to answer your question about ‘sufficient reason’ categorically. I just received a couple of checks from a class-action lawsuit against my cellular provider. Not a lot of money, but enough to pay for Jeanne Bliss’s new book, Chief Customer Officer 2.0, that I just saw at the airport bookstore.

    I’m not planning to switch carriers. Not for that reason, anyway. And if I decided not to buy from any pharmaceutical company that’s ever paid a fine to the US government for illegal sales practices, I wouldn’t be able to take prescription medicine. Instead, I’d be a frequent shopper at holistic nutrition and vitamin stores. And why not? They promote their products as elixirs for everything, including alzheimers. I think I have a promotional coupon or two right here in my drawer . . .

  4. Ah, but there are plenty of research specifics which speak to this: From a 2011 CustomerThink blog, the following:

    “Corporate trust and reputation matter. In fact, they are every company or organization’s most valuable assets. Trust and reputation go hand-in-hand, and need to be protected and enhanced. An excellent reputation doesn’t necessarily translate to a better bottom line; but, a bad reputation can definitely be damaging to a company’s future. Any negative hit to a company’s reputation often results in a decline in consumer trust; and any erosion in trust equals a negative hit to business growth. Not something a CEO wants to treat lightly.

    A 2008 study by the CMO Council found that almost 100% of the customers surveyed claimed that they would either scale back or terminate relationships with companies that fail to build customer trust. Customers need to see that a business is working hard to build a solid foundation of trust among its customers. For many organizations, the first, and most essential, step in building trust is understanding why their business may not have as positive a reputation as it once had, or should have.

    In the Spring of 2010, the Reputation Institute, in collaboration with American Banker, published the results of a study that measured the reputations of 30 large U.S. banks. The study revealed that the 7,800 U.S. consumers surveyed felt that how a bank is perceived to behave in its transparency and business dealings accounted for close to 16% of their overall reputation score. This is not a statistic that can be dismissed. Governance was the single greatest contributor to reputation. In fact, it was even higher than the contribution to reputation of a company’s products and services.”

    In your transaction with Sprint. their willingness to deviate from advertised price, and dig into your wallet for more revenue, is an example of how lack of transparency and breaking value promises directly translate to impaired image and diminished trust.

  5. Hi Dick

    There is much more to ethical behaviour than just cleaning up intentionally misleading advertising and promotional marketing.

    I switched from T-Mobile at home in Germany in response to their poor customer service. The final straw was a dispute with an obdurate salesman in a T-Mobile shop over a surprise Euro 5 surcharge for a new contract! As I described in an earlier post on ‘T-Mobile: Three Strikes and You’re Out’, as a direct result of this ‘critical incident’ I cancelled two of the six contracts I had with T-Mobile, moved two to other much cheaper pre-paid carriers and downgraded two to much cheaper contracts. In the space of a few days I went from being a customer with an estimated future LTV of 120,000 Euros over 20 years, to one with an estimated value of 12,000 Euros. T-Mobile’s poor service and sales stupidity quite literally cost it 108,000 Euros! And gave me a great bit of improv theatre to use when I regularly speak at conferences around Europe.

    As Oliva et al’s paper on ‘A Catastrophe Model for Developing Service Satisfaction Strategies’ shows, customers will put up with quite a lot of disservice until the final straw break’s the camel’s back and they switch almost instantly from being formerly loyal customers to becoming highly vocal defectors.

    Graham Hill
    @grahamhill

  6. Great question Dick – and as one who has publicly written many times abut vendors who I have no desire to interact with again, I can certainly confirm that your story is absolutely more than enough of a reason NEVER to do business with Sprint again. As others have said in their responses, as soon as you are unable to trust an organisation you interact with, it is very difficult for that trust to be rebuilt. In a world where there is often an alternative, if a vendor crosses ‘the line’, it could be terminal.

    However – I also think that we should be careful when we say NEVER – I have said in the past that I will never use an organisation’s products or services again……. although over time, I have done so – for a variety of reasons.

    The bottom line is this – if you do not treat your customers fairly, or with the respect they deserve, you are very likely to lose their customer – either in the short term, or potentially for ever!

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