I was mulling over some conversations and circumstances from the last few days this morning, and decided to put my thoughts into a post titled “Why Telecom Sucks.” Telecom sucks because the companies in it are dominated by two different motivations, both of which suck for the customer. The incumbent phone and cable companies’ core motivation is to leverage their monopolistic power to extract as much profit from existing investments as possible, and never, ever exit. Technical innovation in these companies can usually only happen in pursuit of new monopolies, not new customers. Customer experience is inherently only a necessary expense.
On the other hand, competitive telecom is almost always driven by the exit strategy. Price is the main differentiator, and the main motivation to acquire customers is for the purpose of an exit. You don’t need to hold onto that customer for life, you need to hold onto him for just as long as it takes for someone to come in and pay you more for that customer than you paid to get him. Technical innovation and customer experience need to be slightly better than the incumbent, but only far enough to get that customer to sign up. Even mature, publicly held competitive telecom companies continue to think this way well past the exit of the people that built the business…long term investors like Warren Buffet are nowhere near these boardrooms (although he has made one exception).
What has developed is that the universal expectation from any customer that does enough business with a telecom company, is that the the telecom company will say they are great, but break that commitment early and often, and that is just the nature of telecom…the best you can get is a provider that sucks less. When a company puts on the hat of “I want to be good enough for this customer to choose to pay me for the rest of my life and his life to work with him” it changes everything. For both the company and the customer.