For a long time, I have enjoyed using the word “confusopoly” although I am ashamed to admit I couldn’t remember where it came from until I looked it up yesterday. It was Scott Adams who defined confusopoly in The Dilbert Future in 1998 as “a group of companies with similar products who intentionally confuse customers instead of competing on price“. He lists banking, insurance and telephone companies as examples of these, and (quite literally) illustrates the point in this classic cartoon.
The reason this came to mind was that I recently switched mobile phone providers. I removed the mobile option from my home phone & broadband contract, which had cost an extra £5 per month when I added it a few years ago. Yet, when they removed it, they decreased my total monthly bill by £12. How can that be? Clearly, they were overcharging me.
It made me wonder how much I was being overcharged for all my other utilities, so I tried to switch to better tariffs (without switching providers) for gas and electricity. It was a fairly soul-destroying experience; yesterday I got an email from the gas company saying my new tariff isn’t compatible with “EnergySmart” – I neither know, nor care what “EnergySmart” is, and I have no recollection of ever asking for it. Now I have no idea if they’re going to change the tariff, and I’m not sure I can be bothered to find out.
So it occurs to me that these types of companies are not just confusopolies, they are “apathopolies” (a word I feel I can claim to have invented as there are currently no Google hits at all for apathopoly or apathopolies), relying on customers either being too apathetic to seek the best deal, or giving up trying. Let’s face it, we’ve all got better things to do with our lives than learn the weird terminology and product names utility companies keep inventing for gas, electricity and phone calls.
The era of the social customer should put an end to confusopolies and apathopolies. As consumers, we should use the power of social networks to crowdsource the knowledge required to navigate through the obstacles these companies put in the way of getting the best deal. Collectively, we have this knowledge, but we don’t yet use it to bring about a change in suppliers’ behaviour.
I recently persuaded my mother to get a wireless broadband router. I said “ask them to give you one free, they’ll say no, so point out that they give free wireless routers to new customers and if they don’t give you one, you’ll switch suppliers. Then they’ll give it to you free”. I spoke to her two days later and she said that this is precisely what had happened. Similarly, the outrageous extra cost that insurance companies try to charge renewal customers – whenever my home or car insurance renewal notice arrives, it is very, very rare for me not to save £50-£100 just by ringing them and expressing outrage at how much more they are trying to charge me than they would if I were a new customer.
Do they think we’re idiots? I find it quite offensive that a company that I pay money to treats its customers with such contempt. Most people know this happens, yet still it persists. Sometimes I make a point of ringing the insurance company and saying “even if you do now offer me the best price, I’m still cancelling, so that you will hopefully understand that this is an unacceptable way to treat customers”. But sometimes it just feels like all too much effort; what do they care if they lose one customer versus the profit they make from all those gullible renewal customers? The apathopoly wins again.
Well, “no more!”, I say. Social customers of the world, rise up and demand an end to confusopolies and apathopolies. Use your collective wisdom to guide your fellow customers to the best deals, and tell these companies that you are no longer willing to be treated like an idiot. Forget all those endless offers for teeth-whitening and foam pillows from Groupon; the true power of social commerce and group buying is in consumers uniting to put pressure on big suppliers. And suppliers, take note, this change is coming – you think you know about the power of the social customer, well, you ain’t seen nothing yet.
So rise up, my friends, rise up. If you can be bothered, that is.
You answer your own question in the penultimate paragraph: the reason these companies treat “older” customers differently – expecting them to pay incrementally each year – is that they know for every one conscientious / annoyed person who badgers them to remove extra fees, there will be 10 who don’t see what’s going on or can’t be bothered. The cost of dealing with people like us is easily outweighted by the increased margins from all the others.
But do you think online social communities will tip the balance sufficiently? Surely we’re looking at nrmal distributions of populations here? Even with more empowered consumers “moving the needle” on the average level of awareness to these issues, there’s likely to be a rump of the population that’s not an active part of such communities – and that group is likely to overlap with precisely the group who don’t have the savvy to question higher prices…
@Neil… An interesting question. A bit of Googling around suggests that Facebook usage among the over-55s is growing faster than any other age group. Of course that’s probably because so many of the under-55s are already on Facebook, but it does suggest that the older segments of the population are catching up.
I do think we will reach a tipping point, then see a sudden and widespread change – the “secret” will become so well known that it is no longer economic for companies to treat their customers with such contempt, and they will be forced into change. That may not happen this year or next, but I am sure it will happen.
In the meantime, I believe there is a real opportunity for suppliers (and it is typically utility/finance suppliers) to take the initiative and set out their stall as a more customer-oriented, ethical business – a company that customers trust to simply renew with every year because they know they are being treated with respect.
Idealistic? Maybe. But I do believe it’s coming and that social networking will drive that change.