Monday, August 8, 2011

Dangerous Dependencies: ATT and Other "Providers" Not Providing...

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Choose your vendors with caution. Diversify them as you would a balanced asset portfolio. Prepare for contingencies. Do some serious work on that "Plan B". Supply chain management gurus, vendor relations experts, indispensable project managers, thought-leaders and other decision makers and trusted advisers --- there is a new tactic being aggressively mobilized that can leave your business, practice or organization utterly paralyzed. This is not merely a strong negative indicator (like the recent credit downgrade of U.S. Treasury securities by Standard and Poors, which is a macroeconomic monster looming on the horizon). No; this is a microeconomic alert. It concerns you, directly and immediately.

If you cannot easily increase your price (if you are a monopoly, this sometimes takes a combination of lobbying, timing and other impediments to the juggernaut bulldozer of your all-but-guaranteed profits and "progress"), all you have to do to increase your profit margin during this annoying waiting period is to decrease the amount of quality and quantity of your service to customers or subscribers. AT and T is leading the way!

Douglas E Castle's favorite analogy: This is just like selling a "newly packaged" but somewhat smaller candy bar for the same price as the earlier, larger version. After several iterations of this "disappearing trick," you find (oh, no!) that you no longer have enough of a chocolate bar to share it with your buddy. In fact, you don't even have enough to satisfy your own chocolate lust. What happened? Where did it go? What's the world coming to?

Please read more, and then return to this page:
  • AT&T will cut speeds for heaviest data consumers
    AT&T confirmed Friday it will slow speeds for the 5% of its subscriber base who use the heaviest amount of data -- although these users may or may not notice the speed reduction -- saying it will restore full service for these users at the start of each billing cycle. The plan, which will take effect Oct. 1, is aimed at battling congestion on AT&T's networks by targeting those who use about 12 times the amount of bandwidth than the average smartphone user. "Even as we pursue this additional measure, it will not solve our spectrum shortage and network capacity issues," AT&T said in a statement. Bloomberg Businessweek (7/29), Los Angeles Times/Technology blog (7/29)

I believe that this marks a precipitously increasing tendency amongst utilities, dominant companies, and monopolies. Especially in light of the declining U.S. Dollar, the less-than-stellar "Jobless Recovery" (rather like a meatless beefburger), and a growing fear amongst the recipients of the Government's largess (i.e., you're too big to fail -- here's some money, and have another toss! Hey, we're all friends, right?)

In sum:

"If we cannot raise the price immediately to maintain or increase our margins, we will start cutting back on the quality of service in the meanwhile."

These folks are aerating their ice cream, cutting their drugs with powdered milk, putting up falsified meters and thermostats, and recycling their non-recyclables... short-cuts are the order of the day.  

If you order a soda, expect it to be mostly just carbonated water -- real flavoring costs money.  Any more poor analogies?

In Sum More:

In an era of decreasing expectations, this is the big business and big government view of expectation management and customer experience management (CEM). Be prepared for a looter's festival of this type of conduct. Prepare your mindset and your business. ATT wants more market share -- as they get bigger, they get greedier. This is not about Loaves and Fishes. This is about looting and lawlessness.

ATT is more brazen than most -- they are taking a leadership role in this, but as we will all see, they will be one of a growing number of faceless opportunists to pick the increasingly shallow pockets of the small- to mid-sized business consumer.

Pay close attention. Be vigilant. Be proactive instead of reactive.

Don't panic. Prepare.

Douglas E Castle

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