How I lost my cell phone in a shell game

by David Batstone

Customer care is one of the eight principles I use to determine whether a
company operates with integrity: "A company will represent its products
honestly to customers and honor their dignity up to and beyond the
transaction."

One would think that this principle would be a high priority for any
business hoping to retain customers. Yes, but that's assuming that they
focus on customer retention. All too many companies rely on engaging new
customers and exert little effort to satisfy the customers that they
already have. My own research shows that the average company devotes 3 out
of every 5 of its operating dollars to new customer acquisition, and only 1
out of 10 to customer retention. Conclusion: most companies anticipate
customer churn, and consider it the cost of doing business.

Do you want to know what really irks me? The way so many companies renege
on the promises they make. One of the more convenient excuses I've noted of
late is what I call the "corporate shell game." I'll use a personal example
to show how it works.

Back in 2001 I visited a PCS SmartMart store to buy a cell phone and a
service package using Cingular Wireless. On my purchase contract with PCS
SmartMart appears the Pacific Bell name and logo as well as those for SBC
Global Network. SBC is a major shareholder of Cingular Wireless and also
owns Pacific Bell.

Sorry for the detail, but the background is relevant to understand how I,
an unassuming customer, got shelled.

I purchased the top-of-the-line Nokia cell phone, and along with it paid a
$100 insurance policy for three years' coverage in case my phone was lost
or stolen. When I lost my cell phone in early 2003, I congratulated myself
for having the foresight to buy an insurance policy - until I visited the
store, that is.

A few things had changed. The store now had a Cingular Wireless sign, not a
PCS SmartMart sign, on the front. More shocking, the customer service agent
told me that Cingular Wireless no longer stocked the Nokia model that I had
purchased and, hence, the company could not replace it. The only thing he
could do for me, he added, was to give me a Motorola phone that sells for
$300 lower retail value. He assured me that my insurance policy was still
valid if the Motorola phone broke down, but that I would have to agree to a
one-year service contract to use Cingular Wireless service.

Of course, within nine months the Motorola phone broke. I returned once
more to the store. This time I was informed that PCS SmartMart had gone
bankrupt and Cingular no longer would honor my insurance policy. Once
again, a Cingular agent told me that he would only replace my phone if I
signed up for yet another year of cellular service. If I refused to do so,
I would be charged $150 for cutting short my existing service agreement.

I may not be a clam, but I know when I'm getting royally shelled. I left
the store immediately and within a week had signed up for wireless service
from a competitor. Cingular will not be receiving a $150 payment from me,
and soon I will be canceling service that both my wife and daughter have
with the company. To say I'm leaving with a bitter taste in my mouth is an
understatement. I'm experiencing the spurned emotions of churn.

I since have gone back in my records and looked up the original contract
from PCS SmartMart. The company clearly identifies itself as "an exclusive
agent of Cingular Wireless." All the same, Cingular acts as if it is my
responsibility, not its own, that PCS SmartMart is no longer solvent.

And that's the corporate shell game. Large companies are regularly engaged
in mergers, acquisitions, spin-offs, and strategic commercial partnerships.
Such financial engineering does not wipe clean the slate of customer
transactions. Don't you wish that by marrying and changing your name you
could simply eliminate all of your past debt?

Companies must be held accountable to the promises that they make to
customers, whether offered directly or through one of their subsidiaries.
Integrity calls for no less.


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