Randall Howard

Rogers Climbdown - Egg on Face Purely from Rogers Shooting Themselves in the Foot

Yesterday’s climbdown by Rogers on 3G iPhone (in fact, quicly extended to all smart phones) data pricing was nothing short of spectacular. Since the weekend, I’ve watched as many of my colleagues in the Blogosphere have pushed a campaign of long term customer lobbying over the goal line. Clearly, in addition to influential bloggers, Apple is the industry titan that has been able to unclog an uncompetitive wireless market in Canada unlike any other company (or government) so far.

The story has been well covered, with a good selection of the chronology, below:

• Daniel Smith/Smithereens Blog: “Apple Flips Rogers a Bird A Week Before Canadian iPhone Launch? (Plausible Rumor)”
• Mark Evans: “Is the iPhone a PR Fiasco for Rogers” and “Who at Rogers Blew the iPhone”?
• Jim Courtney in Skype Journal: “Score One for the Blogosphere - Immense PR Turmoil - Rogers Caves”
• IT In Canada: “Did Rogers Try the Patience of Jobs?”

However, apart from the obvious power that an internet-engaged base of consumers now has over even the largest companies and apart from a major victory for grassroots campaigning, there is an even bigger lesson to be learned from this.

In a blog post back in April “Early Adopters versus Business Models: Shooting Yourself in the Foot?”, I stressed that companies who fail to engage early adopters and keep them happy risk both sabotaging an emerging market, but also creating long term ill will that is almost impossible to reverse. My personal hypothesis is that that the ratio of the cost to reverse grassroots consumer dissatisfaction (bad will) to delivering a message when the company brand is seen as consumer friendly (good will), may well be as high as 1000 to 1.

While we must await the long term customer fallout from this major misstep and climbdown by Rogers, I suspect that Rogers has suffered a significant long term liability on its balance sheet.

Again, it is clear the companies ignore early adopters at their peril.

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2 Responses to “Rogers Climbdown - Egg on Face Purely from Rogers Shooting Themselves in the Foot”

1. forsyth Says:
   July 10th, 2008 at 22:50 pm

   “Clearly, in addition to influential bloggers, Apple is the industry titan that has been able to unclog an uncompetitive wireless market in Canada unlike any other company (or government) so far.”

   I suspect it is because the device is built by a computer company, not a mobile phone company. It is a powerful Internet device, and needs largely untrammelled access to the Internet. Even on normal 3G phones the applications tend to be on the net lightly, and it’s probably not too hard to estimate the data cost from your own activity. (But the applications are boring and make boring use of the net.) With Internet devices, who knows? The more interesting applications won’t (necessarily) make their demands obvious. Costs can mount quickly; limits will be breached. Friends moan bitterly about the caps silently placed on their ADSL lines when their children download too much video, and it’s much the same story with the iPhone, which in the right context might make exactly the same demands as a PC, and how many end users are prepared for that?

   The old-style carriers are in for a miserable time, but users should eventually be happy.
   I still don’t quite understand how they didn’t see this coming. I’ve only just played with iTouch and iPhone, but it’s obvious. Perhaps they are ignoring their own tech. staff?

   I don’t think it’s all good news for Apple, though. The “Apple” aspect is important because the device is slick and sleek; nice interface. Full marks for that. It’s potentially troublesome, however, because Apple too thinks in terms of monopoly and micromanaged control. Much like the old carriers, in fact.

2. Randall Says:
   July 10th, 2008 at 22:55 pm

   Charles, I totally agree, although from the UK you have no idea how little competition there is here in Canada.

   To be clear, my point about Apple, wasn’t that it was going to win market dominance, but that it is the first player to have the mass to displace a well-entrenched carrier oligopoly in Canada. Presumably, and hopefully, that will open up the market for many comers and, most importantly, the building of useful web-based mobile applications.

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