Paul Wallbank – Brilliant Communications

Category: consumer

  • The Sleazy Carnival

    carnival clown stallSeth Godin set up a friends computer and found “the digital world, even the high end brands, has become a sleazy carnival” as he clicked his way through dozens of pop ups, offers and confirmation windows.

    The only real surprise is Seth can’t have set up a Windows computer for some time as crapware has been the bane of IT techs for years. At the 2007 Consumer Electronic Show Micheal Dell notoriously pointed out this crapware was worth $60 per computer.

    Dell’s point was valid in one respect; if you are selling at unsustainable price points then you have to do everything you can to improve your profit margins.

    At the beginning of 2010, Dell find itself locked in the low value, low margin end of the industry with a declining market share at a time when US consumers are banging shut their wallets. It’s fair to say Micheal has reaped what he sowed.

    It’s unfair to just single Dell out – cost cutting, upselling and downright double dealing is endemic in the IT and electronics industry and the vendors only have themselves to blame as they trained customers to fixate on price and then struggled to claw back a decent profit.

    The tech sector has betrayed its customers and only has itself to blame for the lack of trust and declining profits.

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  • Death of the cashback scheme

    I’m no fan of cashback schemes. Having dealt with them on behalf of customers in my old IT support business, I’ve seen too many people messed around by them.

    So the news that the Officeworks chain will stop offering them is welcome and hopefully will see the industry move away from these often unethical and unfair practices.

    The main reason for offering cashback schemes is to keep commisions up for salespeople. If a TV or laptop vendor simply cut prices by $200 they would find the salespeople steering customers to more expensive competitors.

    So it’s no surprise to see which stores aren’t following Officework’s lead.

    If you are offered a cashback, ignore it while negotiating a price as it’s none of the store’s business what you do with it and most certainly won’t help you if there’s a problem down the track. Treat any cashbacks as a bonus and don’t factor it into your purchase.

    Or better still, avoid electronics stores staffed by commission driven sharks.

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  • Has Microsoft learned anything from Vista?

    Has Microsoft learned anything from Vista?

    CNet’s Ina Fried reports Microsoft has set an October 22 release date for Windows 7, their new operating system to replace the flawed and unpopular Windows Vista.

    In an article earlier this year, Ina quoted Microsoft Senior Vice President Bill Veghte that Microsoft has learned important lessons from Vista.

    One lesson they appear not to have learned is how multiple versions of the product confuses the marketplace and tarnishes their brand.

    That we still have FIVE versions of the new system, and that they’ve locked themselves into a release date before the final Release Candidate version, doesn’t bode well for Windows 7.

    As usual, the advice for most computer users will be to sit and wait until the first Service Pack is released. I wonder if Microsoft will repeat the bluff of claiming there will be no service pack which failed so dismally with Vista?

    Let’s see if they’ve actually learned anything from the humiliation that was Vista.

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  • Ignoring your customers

    The new Facebook design has picked up lots of critics with nearly 800,000 users giving it the thumbs down.

    However Dare Obasanjo claims Facebook founder Mark Zuckerburg doesn’t care. Apparently Mark’s view is “the most disruptive companies don’t listen to their customers“.

    That’s true – Steve jobs ignored the howls of protest when Apple dropped support for floppy disks and the Apple Desktop Bus which left millions of Mac users stranded with obsolete equipment.

    Even more famously, Henry Ford told customers they could have any colour Model T they liked as long as it was black.

    Both were right and the customers followed them, although not without some grumbling.

    So you can succeed by knowing your customers needs better than they know them, but it’s a risky ask as Microsoft found with Windows Vista, Ford with the Edsel and Coca-Cola with New Coke.

    Time will tell if Mark Zuckerburg’s right. It’s a high risk strategy though.

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  • Dell’s $70 netbook bundle

    Vodafone’s $70 a month bundled laptop deal sees them joining Optus and Telstra in offering these plans. To date, there’s been almost zero uptake with these products as the dealers don’t seem to know or care about them.

    Let’s see if Vodafone and Dell can do a better job of marketing these packages.

    For consumers, it would pay to shop around on these deals as Vodafone currently offer the 5Gb data plan with a free modem for $39 per month.

    Over a 24-month period (which is what we’ll have to assume the plan is without any further information) then the package costs $1,680. If we subtract the data component of $936 (24*39) that “free” netbook will cost $744.

    Not bad, based upon Dell’s list price of $699 that’s a 3.2% APR, but you can be sure Dell and other netbook vendors will have better deals on their computers next month.

    It always pays to do the sums closely before committing to these contracts.

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