In an Australian Federal Court today, a judge ruled that Telstra, the country’s largest communications company had misled consumers in a recent advertising where it promoted an “unlimited” mobile broadband plan that really wasn’t “unlimited”.
The judge ruled that the plan was severely limited and that the advertising was delivered and constructed in such a way that the limitations were obscured to the point where the consumer would not have reasonably understood the offer.
In essence, the Telstra mobile data plan in question gave the consumer 45GB of data at full speed and then once the customer hit that threshold in a given month, the download speeds would be throttled to 1.5Mbps which would put a natural cap on the plan.
Testimony from one person who gave evidence was that a Telstra Store employee said that 1.5Mbps would be “miserable” performance for something like Netflix and would not be fit for purpose.
Telstra are not alone, Vodafone has a similar offer of “unlimited” data that relies on a bunch of fine print. Optus also had one that they pulled from the market because there were complaints and in 2012, they were fined $3.6m by the Australian Consumer and Competition Commission for a misleading “unlimited” plan.
Uniformly, mobile phone companies in Australia are not trusted by consumers – the Telecommunication Ombudsman complaints about mobile providers show astronomical figures that are constantly growing.
Let’s be clear here, Australia has world-class mobile networks.
Telstra’s 4G network is geographically the largest, fastest and most complex mobile network in the world and daylight is second. The Telstra network is the one that the carrier equipment makers use for testing – 4Gx is widely available in every city in Australia and during the Commonwealth Games a few months ago, Telstra deployed the first commercial, working 5G network in the world.
The prices are also pretty reasonable by international standards where you can get 40GB of data per month for less than US$50 per month.
Yet somehow, despite having good networks with great performance and reasonable prices, these companies are very much disliked and deemed “not trustworthy” by the public.
The reason is pretty simple – they have a history of being deceitful and duplicitous dirtbags that routinely treat their customers with utter contempt.
The Federal Court ruled today that Telstra created an ad that was deceptive in nature – when you think about it, that’s a pretty “high hurdle” to get over. An ad can be unintentionally vague and lead to confusion and a judge could order it be removed, but to outright declare that it was “deceptive” implies intent.
The reality is, they can get away with being hated because their product is pretty much a requirement for most people. Mobile phones are so much a standard way of life for most people now that here in Australia, the “basket of goods” that the government uses to measure inflation includes a standard mobile plan.
But when your customers don’t like you, that causes other problems.
Customers have no affinity for these companies – porting mobile numbers between networks is pretty straightforward, so you see people who sign month-to-month deals or “pay as you go” and bounce their number between carriers a few times a year based on the best deal on offer.
This churn rate for these companies is a real problem when coupled with fierce competition.
The other thing it does is it limits their ability to offer additional services.
Telstra has a bunch of advantages in this market because they are also the largest broadband supplier in the country, but their market share is falling rapidly and will continue to as the National Broadband Network deployment continues.
You’d think there’d be an easy and natural synergy for the big mobile carriers to offer fixed-line internet bundles with mobile. Telstra owns a 35% piece of the largest cable company in the country, Foxtel, and again, you’d think they’d eat up market share bundling that as well.
It makes perfect sense… Except the consumer says, “No.”
Consumers dislike the mobile companies because they’re not always honest and ethical companies that put the customer in the centre of what they do.
And that’s a great takeaway here.
You need to be thinking about everything you promote and how you position it from the perspective of, “Is this a good and fair offer for the customer?”
Too many times people think sales is trickery, it’s not.
You see this with newbie copywriters who think that they can learn some guru secrets to writing copy using NLP kung-fu that will compel the person to buy whether they want to or not.
That’s just nonsense at best, but in truth, what they are looking for is a way to use underhanded coercion techniques to separate the customer from their money.
Calling something “unlimited” and making the limitations impossible to read, understand or even find, is not clever, it’s unethical.
Nobody wants to be treated like that, so why do that to your customer?
For me, this is about the silver rule (as opposed to the golden rule), “Do not do to others, what you would not want them to do to you.”
When you’re making offers, think about what’s in it for the customer, how does that make them better off and is what you’re offering clear and concise?
Nobody wants to be tricked out of their money and building that kind of chicanery into your business model is a recipe for failure.