Saturday, November 18, 2006

Honestly Practice Business

A question comes up during my shopping research for cut-rate computer parts. Specifically, what constitutes good business practice? There are obviously two different points of view, from the enterprise and from the customer.

I submit that there is, in fact, a third.

Let's first look at the customer's view.

A typical purchaser of product or service wants to know in clear terms what they are buying and for how much?

This is such a loaded statement it's not even funny. In itself, it has many interpretations depending on the point of view, as I mentioned above, but namely: what defines clear?

Clear is supposed to be vocabulary and explanation that the common customer will understand reasonably. It is also a description of the product that is true or at least reasonably close to the true form. In other words, once the customer has understood the product description he or she should receive something close to his or her expectation.

I'll tackle price in a minute.

From the business point of view, one should assume a stance commensurate with clarity for the purchaser, right? Wrong. The enterprise instead works to fulfill the purchaser’s need or perceived need.

You can immediately see the disparity, although not entirely opposing, it can still lead interesting discrepancy.

I'll use the example of Bell Canada and up-selling. When a Bell Canada customer has a problem, more often than not, Bell will attempt to sell the solution. This is a matter of corporate philosophy. A case was made recently that a cell subscriber, through some technological bug, would get charged long distance for local calls. Suffice to say that the bug itself is very, very difficult to resolve. The solution was to subscribe to a cellular long-distance plan, which the customer eventually did, at some extra cost to her even though she only makes local calls.

We know it's not her fault, we know it's a techno-bug, but this is the solution Bell proposed. The purchaser "needed" to get a long-distance plan. This is a valid business view, though unsatisfactory it may be.

The third point of view, again from an enterprise perspective, is to provide the customer with a fac-simile that satisfies a first-view interpretation. The snow-job. The simplest example of the latter is the bait and switch, or the eBay gambit. For example, a picture is put up on a listing, and the actual product is significantly different but only upon close-up inspection.

So we get to the issue of price.

The last point of view is defensible only on the basis that the price is commensurate with the value of the real article, and not the publicity. The phrase "for that price, what did you expect?" comes to mind.

Fair price for fair product? The issue with this is that the customer expectation is not fulfilled in any way, but the fault may actually lie with the purchaser and not the seller, since due diligence of the buyer would have sorted everything out up front... Like I said, from that business’s point of view.

The case can be made that a picture can be misleading, and so forth, but this is only defensible from the customer point of view. Either business will accept this as a legitimate business practice, but the customer would not.

Whether it is ethical will be invalidated by our first enterprise model, yet embraced by the second.

This demonstrates the 3 views. Which one is correct and proper? More importantly, which one will survive in the long run?

Running a legitimate, upstanding and ethical business is becoming increasingly difficult. I mentioned trust in my blog yesterday, and here repeatedly shady business practices have all but eroded trust completely.

As consumers we are now, more then ever, intolerant of bad practice. In fact we routinely declare war on perceived bad practice whether it exists or not! This makes running a business on the up-and-up very difficult indeed. Anyone can feel slighted, with just about anything, especially when unreasonable expectations aren't met. I believe that we are becoming a society of knee-jerk reactions and, quite unfortunately, rightly so.

The natural reaction from business is to become more defensive on all fronts instead of straightforward and assuming the all-important responsibility. My problem with my 4Runner's premature tire wear is a prime example of this. And I can't say I blame them. After all the enterprise is composed of humans as well.

Abuse is now occurring from all sides, and we reap what only a few have sown, but overgrew the rest.

Here our court system fails us miserably, whereas it should be a solution. We now turn towards the courts, public opinion or otherwise, for vengeance or satisfaction, or to right a wrong. Seldom, if ever, do we simply hand over the issue to a judge for an impartial decision.

I make a detour to illustrate this point. Two good friends are hanging-out together in a one of their bedrooms. The dog wants out, and the owner asks his buddy to open the door. The friend does so, waits an unspecified amount of time, doesn't check to see if the dog has doubled back and closes the door, trapping and breaking the dog’s tail. The dog is rushed to the vet, with no other harm, but the tail must be removed.

Now the friends argue about who should cover the cost of a broken tail. They cannot come to a resolution, so instead of fighting and potentially destroying their friendship, they go to small claims court, and agree to abide by whatever decision the judge takes. The judge makes a call and the friends remain friends!

This is really, in my humble opinion, how courts should be used. End of detour.

We are becoming more and more trigger-happy but some businesses have forced us to do this and so the circle is complete. This is something we have to live with, on both sides. Luckily, most purchases we make are relatively problem free, but there is almost always some little thing to taint the experience.

If we review Bell's case, the company should really assume the extra cost since the technology that they are responsible for is at fault. A judge has not ruled on this as of yet, as far as I know.

The eBay case yielded a refund agreement! But the refund has yet to appear anywhere.

Back to our friends. The judge ruled in favour of the door-opening friend. He couldn't reasonably be expected to be more careful, since he isn't a dog owner himself, and could not reasonably predict that the dog would double back, and there was no malice in closing the door. Ruling: cost of ownership. The owner pays the vet fee.

So honest mistakes are made, but what of deliberate misleading? What is deliberate? Deliberate introduces the concept of malice.

Is Bell being malicious?

Not really, but the corporate view is clear: the customer now has the correct service. Not what she wants, but the need is being fulfilled at proper value. It’s a snaky philosophy to be sure, and not a customer centric view, but a perfectly acceptable business model.

However, we do know that Bell is consistent in their up-selling practices. Evidence abounds. Think what you will.

Is the eBay merchant being malicious?

Yes in being misleading, but no since a full refund is agreed, and then yes again for having the customer chase the refund down. Is there malice in the stalling tactic? Unsure. If it is indeed a tactic then it is reprehensible. And we don't yet know if the merchant is consistent in this kind of shady practice. eBay feedback is a damned good indicator, but not evidence, since it could be vindictive as well.

Which is worse? Hard to say since the only real gauge will be survival.

The eBay merchant will eventually get boycotted or garner enough negative feedback comments to seriously dampen his sales. But Bell can survive a hell of a long time because in theory, upselling doesn't take away from the basic quality of the product. In practice, their dubious philosophy will kill them when, or rather if, enough people become savvy.

So vigilance is the real price.

Most of the transactions we effect in our daily lives are, thankfully, satisfactory. So we unconsciously repeat our business there.

As paying customers we should actively support, and in a way protect, those businesses that adopt, and keep, our customer view.

But we don’t, because truth be told most of the time we just can’t tell.


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