Irrespective of the size and nature of business, the rule of thumb that dominates any business strategy is that the “customer is the king”. Problems arise when a company starts to take the customers for granted. For any company to succeed, customer satisfaction is very important. A business’ real success is not in the billions of dollars that it earns, but in the number of happy customers it has. The following are some examples of companies, which are in a fix right now because of customer dissatisfaction. Though these companies are known names in their respective businesses, their earnings have not been able to cover up these legal issues.
Lots of limitations on “unlimited”
Who would have imagined that a company as big and as highly paying as AT&T (T, Financial) would get involved in a legal issue based on complaints from customers? AT&T is currently facing a legal dispute because its policy about unlimited usage of wireless network didn’t live up to its name. AT&T, in its advertisements, claimed that customers who bought unlimited wireless plans will enjoy the facilities of unlimited internet usage. However, it didn’t practice what it preached. Customers started complaining that once they reached a certain level of usage; AT&T automatically reduced their internet speed by almost 90%, due to which they were severely impacted. Customers complained that in reality, the term, “unlimited usage” never existed at all. The Federal Trade Commission stated that AT&T even went to the extent of levying early termination charges on customers who didn’t want to continue their plans with AT&T. AT&T, on the other hand, has refuted all charges of the FTC and has gone on to say that its policies and principles are quite transparent and simple to understand. Currently, this legal case is in progress and customer satisfaction index of AT&T is at an all-time low.
Wi-Fi Trouble
Luxury hotel group, Marriott (MAR, Financial) was involved in an ugly controversy recently. The group admitted to its mistake and paid a settlement fee of $600,000 to the Federal Communications Commission in order to rectify the same. The Marriott Group had disconnected the internet connections of consumers who had used the conference facilities at its Gaylord Opryland Hotel and Convention Centre, located in Nashville, Tennessee. Due to this, consumers could not connect to their personal Wi-Fi connections and had to rely on the hotel’s connection. However, to add fuel to the fire, Marriott charged all the consumers who had attended the conference, an exorbitant fee of $1000 per device for using its connection. By engaging in this fraudulent activity, Marriott had flouted the rules mentioned in Section 333 of the Communications Act. While this matter was taken up with the Enforcement Bureau, its chief stated that Marriott had indeed committed a blunder by disabling personal hotspots and charging its customers for Wi-Fi usage. The hotel group agreed to its mistake, paid the settlement plan and promised the Bureau that it would put a plan in place for the same and that it would submit its Wi-Fi usage report with the Bureau every quarter for 3 years. All these resulted in a loss of reputation for the Marriott Hotel group.
Bad policy regarding oversized TVs
While AT&T and Marriot were held for flouting the respective laws that governed them, ecommerce website, Overstock (OSTK, Financial) found a place in the list of most customer-unfriendly companies recently for following its policy properly – only that its policy itself was under fire. Overstock had declared a “no refund, no returns policy” on all its TVs that were 37 inches or bigger. In addition to that, it also stated that consumers should double check the package when the TVs were delivered and refuse to take delivery if the package was damaged. That left consumers with the big question – What to do if they found a problem with the television after it was unpacked, installed and plugged in? Overstock rubbed their hands off from this problem and asked customers to take up the problem with the manufacturer, leading to widespread consumer dissatisfaction. The management, after seeing their company on this rather unenviable list, decided to tone down the policy a bit. Now returns and refunds are allowed for all televisions smaller than 50 inches. For these models that are 50 inches or bigger, there are slightly complex rules to be followed, but they are still better than the “no returns, no refund” policy that was floated earlier.
Conclusion
These three are only the top picks in the list of “most customer-unfriendly companies”; there are many more. Investors should be careful while investing in these stocks right now, as the timing and external factors are not favourable for these companies currently. It will take some time for these companies to gain back the confidence and trust of their consumers and one has to just wait and watch for that moment.
