AT&T's Suicidal System: How Apple Stores Teach People to Despise the Company

I did a post a couple days back about my mixed reactions to the iPad. I also started writing about AT&T but it ran so long that I realized it was really a new post.  The upshot is that I am both bewildered and fascinated by AT&T's suicidal tendencies.  I suspect that the people who run that company have not quite come to grips with the deadly mix of their horrible system and the brilliantly managed Apple stores -- where so many people are forced to purchase their services.  I wonder if they realize that each Apple store appears to serve as a grass roots organization for providing people with bad experiences with AT&T, watching others have bad experiences with AT&T, and an arena for telling and listening to horror stories about AT&T among customers and Apple employees.  If a panel of experts tried to design a system to destroy AT&T's reputation among its most valuable customers and salespeople, I am not sure they could do a  better job than what seems to be happening in Apple stores throughout the country.

Rather than buying a new iPad last week, I thought about waiting for the iPad that allows you to connect to the web anywhere through an AT&T account (not just via wifi as my model does).  But I have had so many experiences with that deeply defective organization that I do whatever I can to avoid entanglements with AT&T. I have had multiple lousy experiences with AT&T in recent months, and based on my experience at least, I suggest you never believe any of their promises and always assume they are up selling you. They don't care about you, they just want to squeeze every cent out of you.  I  also found that when they up, they often aren't trained well-enough to explain the strings attached and limitations.

My worst and most intriguing experience in recent months happened one Friday in March when my wife, two teenage daughters, and I were trapped in the Apple store in downtown Palo Alto.  Our salesperson there spent a full four hours trying to get something done for us with AT&T.  I thought it would be pretty easy but turned out to be absurdly complicated --  we were buying one new iPhone and replacing another that had been stolen from my daughter.  The Apple guy ultimately succeeded despite dozens of obstacles put up by AT&T's people, system, and rules (which were interpreted differently by just about every employee he and we dealt with, by the way).  Our Apple guy succeeded only through his raw persistence and because, as he explained, he had learned that such a high percentage of the AT&T people are so incompetent, that sometimes the best thing to do is to just hang-up and start from scratch (in hopes the next one will be competent). I believe that, in the process of making this happen, at least 10 different phone calls were made to At&T, some by him and some by us.  During this time, we talked to virtually every employee and manager in the place, and each assured us that our salesperson was among their best people.  The problem, they explained, was that AT&T can be impossible and time-consuming to deal with -- and their system meshes very poorly with Apple's in many ways.

An added problem is that the AT&T people are apparently on a  flawed incentive system. So rather than actually trying to what was best for us as customers or relationships with Apple, there was constant up selling  directly to us and through our Apple person -- which he resisted and advised us to ignore. He also reported that, on multiple occasions, AT&T employees resisted doing what was needed to get our phones working because it meant they would get no incentive pay (I never quite understood this, but I heard him say many times to AT&T employees something like "I know this will mean you don't get your incentive, but this is how what we have to do it to serve the customer.")   I was amazed to find that AT&T does not have a dedicated hot line that enables Apple salespeople and "Geniuses" to connect directly to AT&T people who are especially trained to deal with Apple stores as Apple sells so many AT&T accounts -- but apparently that isn't the case. I would give At&T a solid "F" on customer service, relationships with a key vendor, incentive system, and organization based on my recent experiences with them.

I would love to have a film of our experience in the Apple store to show to AT&T executives.  We were there so long that virtually every employee in the place at one time or another came up to us and told us there favorite story about how much AT&T sucked and how lucky we were to have the most skilled and persistent person in the place helping us. Also, quite a few customers overheard the stories or asked us what was going on, and jumped into the conversation with their own bad experiences.  This was a busy Friday night at the store closest to Steve Jobs' house, and in fact, it was the store where he made a surprise appearance the day the iPad was released.  Perhaps AT&T ought to spend less money advertising and brag less about wonderful they are and devote more attention to fixing their defective system and improving their training.  I especially believe that they don't quite fathom how much damage their incentive system does because it focuses their people away from helping customers and toward getting as much money as possible out of them. Perhaps they should read Steve Kerr's classic "On The Folly of Rewarding A, While Hoping for B."

In any event, for better worse, the effect of all this is that tens of thousands of customers a day get to experience Apple's competence and AT&T's incompetence side-by-side in a public arena.  This contrast not only affects the particular employees and customers involved in a given transaction, it often spreads to many others in the setting -- especially when it is a long ugly one like ours.

If you are an AT&T executive, you don't need a fancy survey, you don't need a marketing consultant, just walk into a few Apple stores and ask employees and customers what they think of your company and why. And stand around awhile and watch the dynamics surrounding the especially bad customer experiences.  Apple stores create experiences that teach customers and key opinion leaders to despise your company and see it as greedy, incompetent, and out of touch. 

As always, I assume I am biased and my experiences are not representative. Am I being unfair to AT&T? Have others had good experiences with them, especially in Apple stores?  Note that I had good experiences when I simply bought my iPhone, but whenever anything at all complicated has happened, it has been awful.

Comments

[Mary Kay Plantes]

AT&T is a case study of how to fail at customer experience. Couldn't agree with your comments more.My blog this week is on customer experience, expressing my surprise that AT&T is not getting better at solving customer service issues given the strong likelihood that they will lose exclusivity with the IPhone.

[855 Phone Numbers]

What I know about AT&T and remains the most important to me is that they owned the first toll free phone numbers featured the 800 area code.

[Former_Genius]

I am a former Mac Genius/Mac Specialist at the Apple stores and I can tell you, from many experiences, that this is a very accurate description of what the employees deal with on a daily basis. I had many occasions where I spent hours of my shift on the phone with AT&T trying to get things ironed out. In many cases, the situations made no sense.

I couldn't begin to recall the details these days but I remember even noting down particular customer service locations, asking the rep that answered the phone where they were, and if they were on that list I'd just say "Thanks" and hang up and dial again until I got a branch that wasn't on the list. Most of the branches on my list I got from other AT&T employees who warned me not to work with them or their management.

I think the biggest issues AT&T has is training and infrastructure. None of their systems are designed to interface with Apple's EasyPay system (the handheld devices the employees ring you out with) so if, for example, the device runs out of battery, your account is now in limbo with a half completed activation that requires three hours of phone calls and usually a few overrides from management. It is absolutely ludicrous what has to be done to fix very minor issues, and I always sympathized heavily with any customer that got stuck with me.

Oi, it has me feeling stressed again just thinking about it all ;)

[Chris]

It's unfortunate for Apple that they elected to enter into an exclusive agreement for AT&T service for the iPhone. Until such time as a wireless competitor with some real chops (like Verizon) can sell the iPhone, users will be saddled with poor/spotty coverage and very poor customer service. And it's only going to get worse. Verizon's 4g service (LTE) is coming this summer/fall to major cities. And the physics of radio wave propagation and spectrum weigh heavily in Verizon's favor. Spending $2 Billion on the 700 Mhz spectrum was a brilliant move. That red map will soon be solid red. AT&T is not helping itself with poor customer service.

[Kate Grey]

My husband was out of the country for 3 weeks last summer, and forgot to pay his AT&T cellular bill before he left. I called him overseas to tell him hey, I think your cell phone just got shut off.

He called AT&T and paid his bill, and asked them to waive the reconnect fee, seeing as how he's a good customer and all. My husband has been an AT&T customer for more than 10 years, and had never been late or had his phone disconnected before. We added it up: Over the past 10 years, his lifetime value as an AT&T cell customer is $10,000! And they refused to waive one late/reconnect fee. We couldn't believe the customer service department doesn't have some sort of algorithm or policy that says to the rep “Hey, this guy’s a longtime, paying, profitable customer – it’s OK to give him a break.” Talk about shooting your company in the foot. Once he was rebuffed after all of his contributions to their top line revenue, my husband was so angry he switched to T-mobile, which is much less expensive anyway. I'm thinking of switching from AT&T too. So now, AT&T, you've lost TWO customers worth a total of $15,000+ plus. And when I make the switch, I'm dumping my AT&T home phone service too ...

[James Cape]

This isn't just AT&T's wireless business. Their traditional telecom business is even worse: try 4 hours on the phone a week for 7 months.

[CKG]

One final point: the mistakes were always in ATT's favor. There has never been a point in my monitoring of their bills where they have underbilled or made a mistake in my favor. It's not conclusive evidence, but it is informative.

[CKG]

This is fascinating. We went through a period with ATT where our bill was different every month for fixed service packages where we hadn't gone over any limits nor changed anything. Sometimes the bill was 98 cents higher, sometimes $2, sometimes only 50 cents. I called every time the bill was higher than it should have been. I always made sure I had something to do when I called, because every single call took 30 minutes before I would be connected to someone who could deal with the problem. Every single time, the first explanation was "sorry, the computer changed your account, and there's an account change fee." I would point out that I had neither requested nor authorized changes and ask to be billed the correct amount. Each time someone would try to persuade me that it wasn't very much money for how much trouble it would be to fix it and how much more of my time it would take. Each time, i would persist and eventually, it would get fixed. I finally filed charges with the Illinois Attorney general, once I got to thinking about the aggregate income to the company for a mistake on the order of $1/month for millions of customers.

I always felt bad for the employees on the phone as they seemed so poorly trained and must take such awful abuse because they either don't know how or aren't supposed to solve customer problems. I had a similar experience when an aggregated package was being billed at more than the rate we were quoted when we signed up for it. It took hours to find the person who could figure out the company's systems and learn that "the computer" had turned on feature we had specifically declined, was billing us for them, and, oops, they weren't showing up on our bill to explain the problem. It might be that their systems are just so complex that no one really knows anything about them, and it might also be the real way they make money.

Apple is about as far from ATT in the customer experience as it is possible to get. It's interesting to me how clearly people differentiate them even though it would have been possible to tar them with the same brush.

I was really interested in your ipad review, Bob, and thank you for it. I'm waiting for the 3G version because I travel so much. I'm not sure what I expect now, and what I'm especially interested is to see what evolves that none of us are anticipating right now.

[mch]

You are not being remotely unfair. AT&T is an abominable organization. If I didn't have an iPhone (which I love), there is no way in hell I would have an AT&T account.

[Bob SUtton]

Activator,

Thanks for sharing the inside scoop. And believe me, I was not blaming Apple. The people at the Palo Alto Apple store where giving there all and expressed repeated empathy and emotional support -- but as you say, the result is that everyone loses. If I were an an AT&T exec, I would scrap the incentive system tomorrow, raise everyone's base pay, and retrain and if necessary anyone who does not put the customer's needs first.

[Activator]

I recently left my position with an apple store, but I can tell you the intense relationship between Apple and ATT from my experience.

Apple has forced ATT to open some of their private networked site for Apple managers to review customer account information on the back end, this is called POS(dot)com.

The incentives for ATT reps is absolutely correct, and they'll even activate unsold phones that Apple stores are trying to activate which gives them credit for the contract, but then stops Apple's systems from selling the phone. Once an iPhone is activated, it cannot be sold, it must be activated post-purchase.

One time, my store was not able to process any iPhone sales for 4 hours. Typically, ATT will tell Apple when their systems will have down time so that store can post easels stating that iPhone activations are currently unavailable. Well in ts case, ATT did not inform us that all of our state would be down for that period of time. Wheni called our corporate office, within two minutes I was explaining to an ATT vice president what was happening. My corporate partner was on the call as well and began berating the ATT VP and demanded to know how they failed in living up to their "agreements". It was amazing to hear someone attack a vice president of a company so quickly and hear the poor guy bumbling his words as he explained that he was in vacation and did not know why we weren't informed of the downtime. Within ten minutes all of ATTs systems were back online and we were selling phones again.

Sorry to hear about your experience in the store. In my experience about 1 in 10 customers will face hurdles taking several hours due to ATT. Once, I had account issues that took a solid two weeks to resolve for my customer. Of course, we at Apple took care of everything and I would call her every few days to update her on her account status.

It's an awful system, and Apple can only get it's work done by bullying ATT. To Apple's defense, no one at ATT makes your job easier and that's where we all lose.

[John]

For your iPad reading, you might try this:

http://blog.instapaper.com/post/545408126

I have no connection at all, but people seem to like it.

[Andrew Nash]

Thanks for the nice case study and analysis of customer service issues. I also really enjoyed your article on the iPad. Glad you are back and wish you a speedy recovery!

[joely]

It isn't grammatically clear that the antecedent to "the Company" is AT&T, not Apple.

[Bob Sutton]

Jik, thanks for supporting me, but unfortunately, I am so typo prone that I suffer from this problem even when I am not working on pain killers. And my consumption is way down! ltg thanks and I went back and tried to make repairs!

[jik]

@ltg: Dude, give the guy a break. He just had heart surgery and he's tripping on pain killers. The fact that he can blog at all is remarkable. :-)

[iElvis]

Next time I suggest bypassing the Apple Store and going directly to the AT&T store when you have AT&T account issues.

I recently had to do something similar (upgrading my wife from her old phone to an iPhone) but did it at the AT&T store by my office. I had to wait 20 minutes (it was lunchtime), but getting the phone took less than five. I was out of time that day and had to go to the AT&T store by my house to activate it, but that took about two minutes.

There was no upselling and no monkey business. Could be the store employees and the phone reps are under different incentive systems, but I've never had anything but good experiences going to the stores.

[jik]

I was a Cingular customer before they merged into AT&T. In my experience, Cingular's service and network quality were excellent. The difference after they merged was like day and night.

I'm sure that by now everyone knows how much AT&T under-invested in their cellular infrastructure, thus guaranteeing network overload, dropped calls, bad network bandwidth, etc. when they started selling the iPhone. How long has it been now? and their network is still overwhelmed and performs extremely poorly.

Everyone is probably also aware by now of how AT&T sued Verizon to try to get them to telling the truth in their ads about AT&T's 3G network. The fact of the matter is that in terms of real 3G coverage, AT&T's network is quite sparse; Verizon was telling the plain truth, and it was despicable that AT&T's response to the truth was a bogus lawsuit rather than building out their network to adequately serve their customers.

I don't know about other cellular providers, but AT&T coverage along the Acela Express route between Boston and New York is horrid. Given how many business people travel that route every day and try to get work done on the way, you'd think it would be an obvious candidate for good cell coverage, but it's a disaster.

AT&T has one, and only one, advantage over Verizon, and that is that when you are actually in an AT&T 3G coverage area, you can talk on the phone and use the Internet at the same time. Apparently, Verizon phones don't support this. I've many times tried unsuccessfully to find the answer on the Internet to the question of why this is so. Why can't Verizon sell phones that do this? If they start doing this and get the iPhone onto their network as I believe is in the process of happening, then there won't be any reason to stick with AT&T.

[ltg]

A great story, but hard to read 'cuz of all the grammatical errors and confused sentences. A little cleanup will make this a much more powerful piece.

ltg (Once an editor, always a pain in the... :-> )