adrianmott.com

This is a guest post by Luke Owen, Editor over at an excellent music blog, Hip2beSquare:

It started out as an innocent birthday gift from my girlfriend (now bride to be) and my family and slowly turned into a business case report if only I was in business school. My usual rant is revolved around a band I’m digging on my music blog (www.hip2besquare.net) but knowing Adrian’s audience I thought this would be an appropriate story to tell here.

When two companies partner, there is typically an initial reaction of joy and comfort – knowing that by hashing this partnership both parties will prosper. And in the case of AT&T and Apple, this is most certainly true – but mostly for one partner. Apple could easily sell their iPhone whether they’re with the large worldwide provider or not. The point is just that, worldwide. Most other providers in the US have poor worldwide service if any. This gives you a little glimpse as to how the decision was made by Apple – the lesser of evils so to speak.

If you’ve been paying attention to the latest App Store scandal concerning Google Voice, you won’t be surprised by my assumptions here that Apple and AT&T are currently on bad terms. But what is interesting is how one handled a customer’s cry for help in purchasing both an extended 2 year service along with the new iPhone 3GS.

As I was saying, it started out as an innocent birthday gift. Knowing my interest in the iPhone, my girlfriend purchased a set of gift cards from an AT&T representative. She collaborated with my family on the deal. The reason they didn’t buy one  on the spot is my two-year contract was about to expire and I was also aware that a new iPhone was around the corner. So as my birthday came and went, I waited. First my two-year contract came up (mid-May). Then came the announcement of the new iPhone (early June) and finally the release (June 19th).

At this point, I already knew one limitation of the gift cards – I couldn’t pre-order. But this was only the tip of the iceberg. After a couple days of letting lines die down, I made a few calls to stores – “Hey, you got any new iPhone’s left?”  “Left?”, they would say. “We haven’t gotten any yet for walk in sales, just pre-orders”.

I figure it would take a few days for these pre-orders to be filled and after that the regular walk-in purchases would be ready to rock. I did check with Apple stores in hopes that by some chance they would accept my AT&T gift cards but my hopes were squashed when I called the Cambridgeside Galleria store. But when asked if they had any for walk-ins the attendant said, “yes, we have plenty”. Hmmm, I thought. This is strange. The AT&T store that’s in the same building has zero, zip, zilch for sale. Something fishy was a brewing.

That entire week I called AT&T stores. I complained, I became frustrated and unfortunately a lot of that was geared towards AT&T for not knowing the story. But then I realized, is this really their fault? Why would Apple keep the phones out of these stores for so long? As of this article (July 31st), most stores still do not have them in stock, only pre-order.

We finally tracked down the AT&T rep that sold the cards to my girlfriend to see if she had any idea why after almost a month my birthday gift was essentially meaningless. She was very polite and very apologetic. She conversed with her supervisor. They tried to come up with a strategy to get me a phone but only had bad news for me – they could only pre-order and they need a single credit or debit card to place the order. Even worse, these specific cards could only be used for iPhones or accessories so the option to buy up my monthly fees for a few months with the cards and just go ahead and buy the phone on a credit card was out of the question.

Finally, I crafted a letter that I would send to both parties. First, to the well known Steve Job email addresses (sjobs@apple.com, sj@mac.com, etc.) where customer service reps review inquiries from “Apple happy” customers. Maybe they’re so use to praise that they’ve become lackadaisical because as of August 3, 2009 they have yet to reply.

As for AT&T, I received a response within a day from Brandi, an Online Customer Care Professional. Her message was very apologetic for the situation I was in. She explained that she set a “commitment” in their system to get back to me on Monday (this was on a Friday) and that they would check with AT&T stores in my area to see if anyone could help me out.

Low and behold, I received both an email and a phone call from Brandi herself on Monday. Her message on my phone was to let me know that she found a few spots that could help and her email would include the details on where I could go. One of the stores was right up the street from my office in downtown Boston – a store I had visited off and on to check in-store availability during the weeks leading up to this point. “They must have just come in”, I thought. As I got there I looked for Susie, the rep that Brandi directed me to seek out. She was busy so I spoke to another rep. When I explained I was there to buy an iPhone the rep said, “Did you pre-order?” I said, “no, I was told you had a few left to buy over the counter”. “We haven’t received any for those kind of purchases,” said the rep. I finally got the attention of Susie. She knew of my situation and told me to wait a second. After a minute in the back room she surfaced with a brand new iPhone 3GS that had my name written all over it. At last! I have my new phone.

What is interesting is that based on the first reps statement this store had still not received any phones for in-store purchase. This was a special situation and unless I had sent in my letter I may very well still not have a phone.

Given this unique situation with these gift cards, which I was told AT&T didn’t sell very many of, I was able to get a glimpse of the Apple/AT&T relationship. One they probably want to try and avoid their customers from experiencing. Apple is at serious odds right now with AT&T and my theory is that they’re pulling a fast one by restricting easy access to the iPhone for in-store purchases at AT&T until they’ve sold a certain number directly from their Apple stores.

Unfortunately, this has caused a new Apple customer to have a bad taste in his mouth for how upper management communicates to their various partners. I know that Apple is typically herald for their customer service, especially within the stores. I know from first hand experience, as I’ve been an iPod owner for several years now.

But the problem here lies in the future of Apple.  There’s no question that other developers are on the fast track to create similar smart phones (see Palm Pre).  There’s also no question that Google will eventually be competing with Apple in this space (see Schmidt’s recent removal from Apple’s board).  So if Apple hopes to continue being the dominant force in the smart phone world, they’ll need to become more then just savvy marketers.