Pissing Off Your Customers – Competitive Positioning Gone Wrong

I’ve been an At&t customer for many years, dating back to the time when Cingular bought the At&t wireless brand. In fact, I have been their cellular subscriber since my senior year of high school. However, the company’s recent move to nix one of my favorite features — an unlimited data plan on smart phones — has got me rethinking my wireless allegiance.

In an effort to beef up their business growth strategies, At&t will be replacing the $30/month unlimited plan with two other options. Soon the only carrier to support the iPhone and iPad platforms will offer two data services: 100mb for $15 and 2gb for $25. According to At&t, 98 percent of its smart phone customers use less than 2 GB of data per month, which will be covered by the new $25-a-month plan costing five dollars less than the unlimited option.

I suppose this makes me feel better. Still, I don’t want to be constantly worrying about going over my data limit. And what about the information systems support for all those apps in the app store that require network access to stream content? Apps like Pandora or Slacker — will people be as likely to use them and pay developers for downloads?

At&t’s reasoning to stop the plan is that the $15-per-month plan with 200 megabytes will satisfy 65% of smart phone users’ needs. Meanwhile, if you need two gigabytes, pay $25.
As an analyst at the Boston venture capital firm OpenView Venture Partners I’m always on my phone and, more often than not, siphoning data from At&t’s bandwidth-constrained network.

The bottom line is this: I feel like At&t is playing a game of bait and switch — especially since the iPhone and iPad are not available on any other carrier, at least not yet. When it comes to business development strategies, expansion stage companies should take a lesson from At&t’s data plan blunder and focus on customers from all walks of life.

Peter Zotto
Peter Zotto
GM

Peter Zotto is the GM at Price Intelligently. Previously he was an analyst at OpenView where he helped to identify qualified investment opportunities.
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