While Xtra explains customers fume

Internet provider ihug must be rubbing its hands in glee. Telecom’s new Yahoo!Xtra bubble service looks like it may very well burst following a weekend of no emails for around 500,000 Xtra clients.

Over-promising but under-delivering is one of the critical reputation damagers for any business. Telecom’s failure to ensure the upgrade of their systems occurred with minimal disruption could cost them dearly in an increasingly competitive ISP market.

Xtra customer John O’Hara was reported in the New Zealand Herald as saying

“This fiasco has cost Telecom my confidence and all my telecommunications business, internet, tolls, phone lines, the lot.”

ihug marketing head, David Joyce noted

“For customers who are irate and want to move there is a real hot offer out there.”

No doubt.

Not only did thousands of Xtra customers suffer from having no access to their email for days and increased spam, they will not receive any compensation for the disruption either. Given the reliance businesses have on email communication I doubt very much whether many of those affected will ‘be patient’ as requested by Telecom whilst the faults are sorted.

Around 95% of disgruntled customers won’t tell a company they’re unhappy with that they are dissatisfied. They’ll simply walk away. They simply find an alternative provider, make the switch and turn the lights out when they leave. And one disgruntled customer is likely to tell 11 people who are likely to tell another 5 people each. All of which adds up to 55 pieces of negative advertising from one irate customer. Even if just 1% of those customers affected choose to switch ISP Xtra faces losing at least 5,000 customers or around $1 million a year.

Effective competition in the telecoms industry in New Zealand is long overdue. First impressions make Telecom’s ‘Bubble’ look like it’s full of hot air. Long live competition.