Why We Love Apple and Hate AT&T

Most readers of this blog know that I'm a huge Apple fan.  So you won't be surprised to learn that in spite of my ongoing battle with AT&T I was lined up with hundreds of others outside an AT&T store in Colorado Springs early Friday morning in an attempt to be one of the first owners of the new iPhone 3G.

As we got closer to the assigned hour (8 a.m.) the store manager kept walking down the line and counting the people.  Each time she seemed to be more and more concerned.  A rumor started circulating that the store had only 50 iPhones available.  Sure that this wasn't the case, I used my Blackberry to email my new friend in AT&T's President's office and received an almost instantaneous response: "I would be shocked and amazed if any store ran out on the first day.  My understanding is that all stores including Apple stores, would be fully stocked. Let me know if you find out otherwise."  I breathed a sigh of relief and assured those in line around me that the rumor couldn't be true...the highest office at AT&T had told me we'd all be getting phones.

Once the line started moving and the first group of customers were inside the store I decided to go up to the front of the line and talk to a store manager myself.  A man who identified himself as the "Market Manager" was standing at the door looking stressed...so I asked him if the rumor was true.  He told me that he didn't know how many phones they had and if he did he wouldn't be allowed to share that information.  While this didn't make much sense it satisfied me that he hadn't told anyone there were only 50 phones so I went back to my place in line.

Then, at about 8:15, the police cars arrived.  Two squad cars sped up to the front of the store and the officers got out and stood by the entrance.  The store manager, a young women, came out and stood with the officers beside her.  The crowd fell silent as she announced that they had only 6 phones left.  They had started the day with only 40 phones.  She told us that any one else in line would be allowed to place a "direct fulfillment" order and would receive their phones in 7-10 days.  Then she dropped the bombshell...she announced that they were expecting another shipment of phones the next morning and they would be available on a first come first served basis.  She suggested lining up again on Saturday morning for a chance to get those phones.

I got on the phone to my contact at AT&T's Office of the President and he seemed shocked that any AT&T store had started the day with so few phones. He asked me to hold while he called other AT&T stores in the area to see if he could find a phone for me.  He came back on the line after a few minutes and sheepishly admitted that every store he had been able to reach was in the same boat.  They had each started the day with less than 50 phones and sold out in less than half an hour.  He then offered to check stores in a wider area for me...and found out the same thing...they had sold out as well.  He assured me that no one in his office knew that the stores were going to be so short of phones.  Then he asked me to hold  while he called the Apple Store in Denver for me...he came back on the line and told me that the Apple store had huge lines but the store manager was sure they had plenty of phones for everyone.

So, I decided to drive to Denver.  Two hours later when I arrived at the Flat Irons Mall the line to get into the Apple Store was so long that it stretched out of the air conditioned mall and into an outdoor courtyard.  As I chatted with those in line a similar pattern emerged. Pretty much everyone in line at this point had been at an AT&T store that had run out of phones...no one was happy with AT&T.  But here at Apple, things were different.

The atmosphere in line was almost party like.  Even though most of those in line with me had already had a disappointing morning there was a shared anticipation of the payoff to come.  Apple store employees came by every half hour or so with status updates and bottled water.  They assured us they had plenty of phones and apologized that the line was moving so slowly due to the AT&T activation process.  After I'd been in line for an hour an Apple store manager came by with cold Starbucks drinks for everyone.  It was really clear that the Apple employees were happy to see us and understood that we were sacrificing our day to be part of their product launch. 

I was in line for five hours before I reached the store entrance. As I waited in the short line inside the store one of the managers came up and asked if I was an existing AT&T customer.  I told him that I was and briefly explained my unfortunate situation.  He asked me if customer service had been able to sort out my problem since he had heard stories from other's in line who had the same issue and AT&T customer service managers had issued them credits.  I told him that I had been in contact with the "Office of the President" of AT&T and that they refused to help me.  At this point the manager gave me a heartfelt apology.  He told me that he was so sorry that AT&T treated customers that way and that it was really unfortunate that Apple's partner for the iPhone didn't value customers in the same way that Apple does.  Here's the thing...I believe he really meant it.  It wasn't patronizing...it was a heartfelt apology.  He then introduced me to another employee and told that employee "look after this guy...he's had long day and he's a really important customer."  Ten minutes later I walked out of the Apple Store with two shiny new iPhones.

So here's my rant:

Is it just me or did AT&T have weeks if not months to prepare for the iPhone launch.  The fact that additional phones had already been shipped with a scheduled delivery date the day after the iPhone launch points clearly to a planned shortage. Did AT&T really want all their stores to run out of phones on the morning of the launch?  Did they think that "selling out" of the iPhone would be good for publicity?  What about the hundred's of customers who spent hours in line only to discover that they were being used as pawns in AT&T's marketing strategy.

As Seth Godin points out in his post yesterday on Scarcity: "The danger [with creating false scarcity] is that you can kill long-term loyalty. You can annoy your best customers. You can spread negative word of mouth. You can train people to hate your scarcity strategy (Apple did all four this weekend)."  Unlike Seth I don't blame Apple for what happened.  The vast majority of folks in line at the Apple Stores were people who had already tried to purchase an iPhone at an AT&T store.  I think the blame lies firmly with AT&T...and that's why the only real problem with the iPhone is AT&T.

The day before the iPhone launch, after hearing my story, the manager of AT&T's "Office of the President" told me that he would love to help me but even he had to follow policy and he refused to issue me a credit.  I was hoping that if I was able to reach someone high enough at AT&T that they would do what they all agree is the right thing and fix my problem.  However, he proved beyond a shadow of a doubt that at AT&T policies comes before people.

In spite of this, because I love Apple, I took 12 hours out of my day to get my hands on a pair of iPhones.

Was it worth it? Yes, I love the iPhone...its probably the best electronic device I've owned.  But after my ongoing challenges with AT&T, unfortunately its bittersweet.

What can we learn from this?

We love Apple because we believe that Apple respects us as customers and as people...we hate AT&T because their actions show they don't. 

So, how do your customers feel about you?

Comments

[Partners in Grime]

From what I've seen, it's only Apple that really knows how to value customers.

[A]

who do you think allocates the phones? APPLE - if AT&T didnt have enough to go around, its because Apple controlled shipments. If Apple wanted a smoother launch and customer experience, they could have allocated more devices to AT&T who has the larger distribution network. Get your head out of the sand!

[Jon Dale]

A,

Thanks for your comments. You may be right...however, my conversations with higher ups at AT&T did not lead me to the same conclusion as you've reached.

Thanks for reading.

Jon

[Rachel]

As an unfortunate rep on the phone representing AT&T in iDay as we called it. Yes the stores were not prepared. The man you spoke with who seems to be very high up is right about the credits. If we issue a credit even remotely associated with and iPhone, it's our job. Who made that rule? Apple. Working with them on a regular basis (the visual voicemail is having a lot of trouble) i know that many of their reps are extremely rude and not helpful in the least bit. I put everything i have into every call i take. I get screamed at on a regular basis about the reasons we can't do things for customer's with bad experiences because of the iPhone. Who set up the rules? Apple. I have bills to pay and I'm putting this out there for all AT&T haters..... would you loose your job so someone else could get a new cell phone? Me either.

[Ryon Fuqua]

Granted, I am a moron. I am also coming late to this party, that is responding to this blog, so for that I apologize.

I realize that people inside AT&T would know more about the internal workings of the company than I would, but the comments here seem to be about shifting the blame of this customer service faux pas to Apple. I think it is clear that it is AT&T's fault. They don't go into these deals (that is the association between the two companies) without hammering out all these details beforehand (that is "how many phones are we going to get on the launch day?" and "when will the next shipment be in?"), and anyone who believes that the AT&T stores inventory was controlled solely by Apple and therefore lays the shortage at Apple's feet is not assessing the facts honestly. AT&T's name is on the sign. They have control over what happens in their stores to a great degree, because they will be held accountable for those events both legally (though that is clearly not an issue in this situation) and in the eyes of their customers. The higher-ups at AT&T are not morons. They know how this works, and it is a great publicity stunt. "At AT&T stores across the state the iPhone sold out in the first half hour. Then they sold out again on the second day in under an hour! This is the most successful product launch ever!! Everyone should do business with AT&T!! See how much demand there is for our products from our customers?!!"

AT&T is part an old guard of companies who make their money by volume (I know, what company doesn't, but they do it in a very "customers-are-cattle-here-to-serve-our-bottom-line" kind of a way). They offer sub-par service to people like me who could not justify the expense of that service were it not at a discounted rate. Then realizing that the dollar really is almighty, adjust their customer service policies to minimize loss or revenue even if it means they piss off a large number of people in the process. The only time they adjust these things is if enough people stand up and give them the finger that it makes a significant splash in the bottom line. It's the Wal Mart way of doing things, and it is time tested. The trouble is that they are a technology company, and that stuff is going to get cheaper. Apple's way of giving customer love is the wave of the future, and eventually these "customer non-loving dinosaurs" (I'm going to trademark that phrase) will be relegated to sharing space with check-cashing services in the shady part of town.

I know I'm oversimplifying, but I don't believe I'm wrong at the root of the thing. Companies like AT&T define success differently from companies like Apple. Apple is experiencing a huge swell in their customer base because they have made policy out of nurturing that customer base. They celebrate their customers. And their market-share is growing. This is not coincidence.

[angie]

I have at&t wireless and there customer service and company is not consumer friendly at all. They are taking advantage of the consumers. The phone I had broke so I wanted to upgrade to the Iphone for it work purposes. I'm not due for a "phone upgrade" until 8/09 (which is 3 months away). After calling customer service, I was told I qualify for the Iphone upgrade price of $299.00 for the 16gb I spoke with a rep by the name of Pedro. He informed me he would not my account so there would not be any problems. WIth in the hour, I went to best buy to purchase the Iphone only to find out taht I was not qualified for the 299.00 upgrade price and there were no notes in the system from Pedro. I called customer service again and spoke to a Shawn (he said he was a call center Manager) in the OK call center. He check the notes in the system and to my disbelief, no notes where in the system from pedro that I would pay the 299 for the Iphone. Shawn (the so called manager) said there was nothing he can do since Pedro did not note the account the he told me the phone would cost 299 but he would email pedro and his manager to inquire about it. and I would receive a call back from Pedro's manager that day and he would also follow up with a personal phone call to me to make sure I heard back. In Shawns words. " If they are a good manager, then they will call you." Well here it is 2 days later and I never received a call from either "Manager". I contacted the Office of the president today and spoke with a Niana.. Although she was a nice person, she offered no assistance at all. She explained there is no early upgrades for the Iphone due to AT&T's policy and they are not willing to make an exception for a 3 month period. She said this is an aggreement AT&T had with apple. Well after telling her I spoke with apple and there is no such aggreement, she back peddled and said if was just AT&T's policy. She did inform me that I do qualify for an early upgrade on any other phone but would have to pay an additional $75.00 early upgrade fee. So basically, to upgrade to a phone that would meet my busines needs, it would cost me almost 300.00 including the "$75.00 early upgrade fee" but would only cost me $195.00 to cancel my contract with AT&t. So I chose to cancel my contract with them. I would recommed any consumer look into other Cell phone companys before choosing AT&T. There are not consumer friendly and refuse to work with consumers. I would recommend someone interested in cell service to check out Tmoible.