Is Bad Marketing Killing Future Sales?

If you're not careful, your marketing group might set up sales channels that ruin your firms ability to forge long-term customer relationships.

The software business is notorious for this. There are now many companies that let you have exactly one support telephone call for free. After that, they charge you $35 per service call. The reason that software vendors charge for support is that their software is inexpensive.

But that's no excuse, because most problems with software are the result of poor design, lousy coding and slapdash testing. By charging for support, they're simply passing along the expense to the consumer as a "we can't develop good software" tax. What's worse, because crummy software is almost always difficult to install, you generally end up burning up the free support before you actually use the product. Then you're stuck.

Note that it's a marketing decision to price the product low and charge for support. And it says: we don't give a crap about you once we've gotten your money. And that's not the best way to get repeat business.

But the most heinous example of customer-hostile support that I've ever encountered came, not from a software firm, but from what's reputedly one of the best companies in high tech: Hewlett-Packard.

A couple of years ago, my HP desktop printer broke. I called the HP support line, got some guy from India, who tried to help me out, but we concluded that the machine (which was 6 years old) was a goner. He offered to sell me a new one, with a 10 percent discount if I returned the old printer for recycling. I said OK, since I needed a printer that worked. He takes my credit card data. So far so good.

About a week later, my new printer arrives, but with no information about where to send the old one. No address. No shipping label. Nada. So I figure that the "recycling" thing was just a way for HP to give me a discount without irritating their channel partners. Fine. I attach the new printer and throw the old one away.

Two months later, I see a charge from HP on my credit card for around $400. My first impression was that it was the charge for the new printer. However, I remembered vaguely seeing the charge on another statement, so I checked back and, sure enough, there was a charge for $400 from HP on the previous month.

I call HP to ask what gives. Turns out that because I didn't return the old printer to their fictional recycling center, HP charged me the LIST PRICE OF THE OLD PRINTER. Now, I could understand, vaguely, if they had charged me the discount, or even for the resale price of a broken printer. But the LIST PRICE? That was more than I paid for the printer at the store when I bought it six years ago!

So I get a support supervisor on the line. He says that unless I send them the old printer, they won't refund the charge. Period. No exceptions.

Now, I understand how businesses work, so I was pretty sure what was going on. Some HP marketing bozo probably thought this scam was a good way to add margin to the bottom line of the upsell program. Every time HP swindled some poor schmuck like me, the company was getting an extra $400 in pure profit. And since printers, like most computer equipment, sell with single digit margins, that's a bump of at least a thousand percent. Enough to make a statistically significant uptick in the profitability of the entire program.

So the marketing idiot running the "recycling discount" program was probably walking into the monthly revenue meetings with a spreadsheet showing profits that were higher than the rest of the printer group. So he was looking like a big hero. Meanwhile, the policy was making customers like me furious. As you can imagine, I will never, ever buy ANY product from Hewlett-Packard again. And now I'm sharing the story with the world.

Please note that this arrangement had absolutely no benefit for HP's sales group. The support guy from India probably got a commission on the new printer, but was probably blissfully unaware that he was setting a situation where a customer would get screwed. And certain the HP support staff weren't benefiting -- unless you think handling calls from angry customers is a benefit.

The only beneficiary of the program was the marketing guy who set it up, because that's the only place where the program would have a financial impact.

The lesson here for sales professionals is clear: don't let the marketing group set up policies and procedures that create angry customers.