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Don’t forget who the customer is!

turbotax-logoThis started off as a rant against Intuit. This is a company that seemingly revels in generating angry customers. Every year when they update TurboTax, they do something to piss of their customer base.

With Web 2.0, whatever that is, these transgressions are always right out there in the open. When are these companies going to figure that out?

When I first looked on Amazon, TurboTax Deluxe Federal + State + eFile 2008 had 450 reviews. 157 – more than one-third – were one-star reviews, which is as bad as you can get. More one-star than five-star, even though most people consider this the best tax software available. And what makes it even worse is that Intuit managed to erase a TON of negative reviews by essentially changing their SKU and resetting the review count at Amazon.

Why are people so angry at Intuit this year? Because they decided that raising the price and nickle-diming customers wasn’t enough – their brilliant MBAs thought they could extract even more from their customers, so they restricted TurboTax to printing only a single tax return. I’d like to meet the brilliant strategist who thought that up.

Pricing should be based on what the market will bear, not based on how much the product costs you to make. But you also have to be fair to your customers, especially if they are repeat customers, which is typically true for TurboTax. If your customers don’t think you like and respect them, they will desert in droves as quickly as possible as soon as a viable competitor comes along. Don’t believe me? I’ve seen it happen. Consumer franchises are always fragile.

When Micropro shipped WordStar, we didn’t yet have the Internet or big-box stores. People bought software from small local stores or from the company direct. Some companies thought the stores had an obligation to support the software, since they had such large margins (typically 40% in those days). In theory this is reasonable, but in practice it was absurd. Even the most stubborn managers quickly realized that stores weren’t supporting their software. So the smart guys – WordPerfect – made customer care (not just support) a primary business differentiator. And MicroPro, which had been the dominant word processor, continued to tell customers to go to their dealers for support.

First MultiMate, and then WordPerfect took over WordStar’s #1 slot pretty fast. MultiMate also quickly lost their dominant position, because the product was so bad (I managed it for a short time when I worked at Ashton-Tate, and it was the worst software I ever worked on). But WordPerfect stayed #1 until Windows shipped. Microsoft’s utter conviction in the future of Windows played the decisive role in making Word the eventual winner in this category. While we were scratching our heads about whether to support Windows or OS/2, MS worked feverishly to develop and promote Word for Windows.

(By the way, could it be that this was the biggest finesse ever in computer industry? Is it possible that Microsoft never intended to support OS/2 at all, but pretended to so everyone else would waste massive amounts of money and effort on OS/2 instead of on Windows? Interesting thought.)

bevmo-logoI was reminded of this today by a “conversation” I had with Bevmo. Every time I use their website, I’m aggravated by how truly awful it is. I could recite a list of problems, but there’s really no point, and here’s why: when I sent them a customer feedback form, they cleverly told me how I “really” should be using their website. Pahleeze. I’ve been doing websites since 1995! I wasn’t asking for no stinkin instructions, I was using a Web 2.0 tool (there we go again) to start a conversation with the store about how they could improve their website. And I wasn’t even going to charge them for this advice!

OK, I know that if I got to talk to the CEO of Bevmo, I would probably have gotten a more reasoned response. But CEOs listen up: unless you’re answering the phones and emails, you’d better make sure that there’s a robust and reliable feedback loop from customers to management and developers!!!! Hey, I wrote some feedback about Zoho products and I heard from their CEO. I had problems with some postings on Craig’s List, and I heard from Craig himself. And at Bevmo, somebody told me I was too stoopid to use their site. I ask you: who’s stupid, and who’s smart?

Just to close on a note of personal branding, which is the primary topic of this site, the same lessons pertain to us as individuals. You’ve got to listen, not just talk. We have better tools than ever before for doing this – if you’re looking for a job and you’re on a success team, that’s your primary feedback loop. You’d better listen and fine tune your efforts, or you’ll end up like WordStar did. If you’re writing a blog to help in your effort to become a subject matter expert, seek out and act on the suggestions of your readers. Make sure you come back from in-person networking meetings where you learned as much from others as you offered them about yourself!

Posted in Marketing, Personal branding.

4 Responses

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  1. Bob Meighan says

    Wally…. I appreciate your sharing your feedback regarding TurboTax and allowing me to respond. You state that they (TurboTax) “decided that raising the price and nickle-diming customers wasn’t enough – their brilliant MBAs thought they could extract even more from their customers, so they restricted TurboTax to printing only a single tax return.”

    The reality is that nearly 80% of our customers experienced a price DECREASE this year as a result of our including electronic filing in the price of the TurboTax product. The other 20% did experience a price increase, but it was less than what they would have paid if they efiled their federal return. As for pricing for each return, we were actually trying to provide parity/consistency to how we price our TurboTax Online services where the majority of customers prepare their return.

    As a company that has a history of listening and responding to its customers, we heard quite loudly from the small number of customers who were negatively impacted and promptly rescinded the per return charge pricing. We also responded by included not just one free federal efiling in the price, but five (the maximum allowed by the IRS). While we may not please every customer, we do listen and respond to address each customer’s concerns.

    By the way, you are being way too kind to consider me a “brilliant MBA.” I was delighted to simply graduate from college!

    Bob Meighan
    VP, TurboTax

    • Walter Feigenson says

      Thanks Bob! See folks, this is what Web 2.0 should be all about.

      Despite my nasty comments about TurboTax, Intuit’s bob Meighan is somebody to be proud of. Rather than running away from the issue, he attacked it head-on and presented the Intuit side. My respect for Intuit just went up. But wasn’t it predictable that the market would respond as it did to this implicit price increase? If not predictable, then it’s certainly something that could have been researched by contacting some previous buyers of the software – Intuit has their contact info.

      It is true that my overall cost decreased this year, but Intuit can’t claim full responsibility for this, since all federal filing fees were abolished this year.

      Anyway, my message remains the same: don’t take advantage of your customers – the customer franchise is fragile and needs to be nurtured. Also, the bigger you get, the bigger your target area is. People are much more likely to forgive the little guy than the big corporate monolith.

      A later thought: the reasoning Bob relates for changing the price structure doesn’t really matter. Intuit turned an internal discussion into an external-facing policy. The only thing that matters is the customers’ perception, which was hugely negative. I’ve seen this happen so many times in my career, and I’ve probably been guilty of doing it myself – your internal reasons for pricing better be in tune with your customers’ demands and expectations, or you’re in trouble.


  2. Sandra says

    Hello Mr. Feigenson:

    Thank you for your response to my email on Monday. As mentioned, I’d be happy to talk with you regarding our website and listen to your suggestions on how we can improve the user experience. Our Customer Service reply to your initial email was never meant to imply that you were “too stoopid” to use our site. Not at all. I sincerely hope you didn’t feel that way. It provided simple directions on how to navigate our website.

    I know you’re a good BevMo! customer and I’d want to ensure that your online shopping experience is a pleasant one.

    Let’s chat,
    Web and E-Commerce Manager

    • Walter Feigenson says

      Sandra, thanks for the comment! You’ve proved, as Bob did, that listening to customers is important. I appreciate your efforts to improve your products and services. And as I pointed out in our email correspondence, I wasn’t in any way angry about the way I was treated. -walt