Wednesday, November 17, 2010

How not to treat your customers - Virgin Mobile provide another lesson

As discussed previously, I already have incredibly low expectations of the customer service I will receive from Virgin Mobile Australia but they've managed to negatively exceed my low expectations again and I think it's a great lesson in how not to treat your customers.

Since the iPhone 4 came out in Australia in August I've called Virgin Mobile a number of times to find out when I could get one. Every time I called I was told they had none in stock and that I should call back another time to find out more. The same message to check back later is posted on their website. I continued calling every few weeks to check in for 3 months until my sister's boyfriend told me he had walked into a Virgin Mobile store in Brisbane and walked out with an iPhone 4! Ok I thought, clearly their phone support team doesn't talk to their stores and their stores have stock which their website and phone team don't have access to. I was obviously annoyed that I hadn't been told this.

So 5 weeks ago I called 2 Virgin Mobile stores in Sydney, one in the city and one in Bondi Junction. Both stores asked whether I was a new or existing Virgin Mobile customer. I told them I was an existing customer and they told me they would put me on the waiting list which was about 4 weeks long.

4 weeks passed last week and I hadn't heard back so I called both stores and was told that I was still on the list but that it was still about 4 weeks long. Then I had a thought, I wonder if Virgin are preferencing new customers over existing customers? So the next day I called the Bondi Junction store back and asked if they had any phones in stock. Again I was asked if I was a new or existing customer and this time I lied and answered 'I'm a new customer'. I was told, 'We're getting some new stock in this afternoon and we'll have a phone for you, I'll call you back later today to come and pick it up.'

What the f&%*!

Excuse my language but I've been a Virgin Mobile customer for the last 18 months and this business is going to preference a new customer over me. Someone who has called up for the first time is going to get a phone that same day and after 4 months of waiting I'm supposed to continue to wait for my phone! There is so much that is wrong with this that I'm not going to go into it all except to say that I hope we never, ever do anything remotely similar to this to a single one of our Shoes of Prey customers, let alone one who has been with us for 18 months, let alone have it ingrained in our culture and business processes that these sorts of decisions are ok.

In fact we recently introduced a VIP club for customers who have ordered more than 5 pairs of shoes - they get lifetime free shipping. And we know many of these customer's names (we should be learning them all) so we can ensure we're going above and beyond our already normally high levels of customer service for them. It amazes me that Virgin are doing the opposite. Clearly they believe that existing customers will keep waiting and they're better off prioritising their limited supply of phones to new customers.

Anyway, naturally the Virgin mobile person didn't call me back when they said they would, no surprises there. I called back the next day and was put on hold, the guy didn't hit the hold button and instead put the phone down on the desk, I could hear him talking to another customer which was fair enough. 20 minutes later he still hadn't come back to the phone so I hung up. I called straight back and yep, the phone was off the hook as I got an engaged signal. I called back more than 10 times that day and got the engaged signal for the rest of the day, he left it off the hook for the entire day! I'm glad I hung up and didn't stay on hold. The phone was back on the hook the next day, I called up and was told the delivery had arrived and I could pick up my phone, which I now have.

The frustrating thing is I am still signing up with this company, for another 2 years in fact. I make a lot of overseas calls and they are the only company to include international calls in their caps. If it wasn't for that I would be taking my business to any other phone company but in the meantime I will take some satisfaction in warning off everyone I can from using them and continue to learn from them by doing the exact opposite of anything they do customer service wise.

One of the many things I find incredible about this is that Virgin Mobile are trashing the Virgin brand. Virgin Mobile is owned by SingTel, the same company who own Optus and they license the Virgin brand. I suppose SingTel's strategy is to profit all they can and if the Virgin Mobile brand gets trashed in the process they can simply ditch it and license a new one. Because they don't own it themselves they're not as incentivised to protect it. If I were the Virgin company, or another company licensing the Virgin brand I would not be pleased with Virgin Mobile's actions.


  1. If it helps, Vodafone now also include international calls as part of its cap (or just use Skype over 3G) :-)

  2. shocked, but not surprised.

    having worked in telco's as a consultant and knowing the fine margins they experience, it makes complete sense to generate as much customer loyalty as possible.

  3. I wonder what Richard would say:


  4. Hi Michael

    I went through a similar thing with a phone purchase (and, oddly, a sofa from Ikea which took 3 months to deliver). The dreaded "It'll be in next week" spiel.

    I did a lot of research and the people in the stores are the most useless of the lot (both technically and saleswise) they just want to sell you something / anything and get you on a contract.

    Like you, I do a lot of intl phone calls. Here's what I did:

    * did a lot of online research based on my needs, espec on Amazon, read the reviews there from other owners
    * went into the shops and looked at phones in the flesh.
    * went back online and bought a phone from Amazon. Cost about $300 less than buying it in Australia.
    * all I needed then was a decent data plan with voice - found a pre paid/no contract one that auto tops up (Virgin - they resell Optus).
    * The phone (Nokia N900) shipped with Skype built-in. 3G with Video :) I also ended up getting SkypeOut credits to cover the cost of Int'l phone calls. Not a Nokia ad, any phone that supports Skype or Google Voice could do this.

    All up I pay $29 a month for unlimited VOIP and top up the SkypeOut with $15 every now and then.

    I did all this without consulting a salesperson and I got a better deal. It'd be interesting to see some numbers on how many people end up doing the same thing - can the bricks-and-mortar stores even compete with that?


  5. They are better off getting new customers, because they surely don't keep customers based on their service levels. Not only are the using the half-baked Optus network, but their call centre is worse than useless. They have repeatedly stuffed up our our accounts causing calls and SMS to be blocked. Unless the problem is extremely problematic, we just ignore it rather than call them.

  6. Haha, thanks Evan. I should have posted this a day before signing up to a 2 year contract with Virgin, I hadn't realised Vodafone were including international calls in their caps now. I do use Skype quite a bit but sometimes the calls are out of 3G range and it's so darn expensive with any other carrier when the calls are charged outside the cap.

    Dom, agreed. I would like to say they must have run the numbers and figured most existing customers will stay, but judging by my experience with them they wouldn't have done that, and even if they had they're clearly not factoring in the fact that while some people might stay, they're going to be very unhappy and will leave at the first opportunity they get.

    Saf - thanks for the link, posting a question now, let's vote it up!

  7. Michael, if you're determined to leave Virgin Mobile to give Vodafone a try, I'm pretty sure most mobile contracts in Australia have a 7 day cooling off period. Might be worth a look...



  8. James - that's a great approach you've taken. I've kind of shot myself in the foot by getting addicted to the iPhone. Your approach could work with that, but I don't think it would end up being that much cheaper because to buy the phone outright costs around $700 or $800 I'm pretty sure. That's about $30 per month over 24 months so my $59 capped plan with Virgin effectively only costs me $29 per month which is similar to what it sounds like you pay. I'd also have to jailbreak the phone to use Skype over 3G tho that's not so bad. I like your creative approach though, I reckon I might be tempted down that path with my next phone in 2 years time...

    Anonymous - Sorry to hear you've suffered similar pain.

    Mike - good point re: the cooling off period. To be honest I can't be bothered now, I have my phone, the pain is over, hopefully I don't need to speak to anyone at Virgin for 2 years until I end my contract.

  9. That is a well written and interesting story. A lot to learn from the mistakes of others.
    That comment from James is helpful, I'll think about doing that. I was waiting for my current Vodafone contract to run out to buy the next iPhone in February.

  10. Virgin Mobile Australia is the worst company I have ever dealt with in my life, their customer service representatives are clearly incapable of giving correct information to any of their customers. I have been lied to twice now in the space of a week, and quite frankly I no longer wish to be put on hold for 15 minutes at a time while they waste my credit!
    I am paying them for a service, and they have the audacity to charge me when they can't deliver a service!

  11. After a very bad experience with Virgin Mobile Australia, I have written them the below e-mail today and i wanted to share that with you in order for you to know my experience:

    Dear All,
    I am writing this e-mail on hope that this information will reach a person that is in charge in order for you to see the faultiness in your call centre and maybe try to fix it !
    I have been through a series of issues with your service and your call center that made a very unsatisfied customer and a bad publicity for your company.
    1- I have requested for my line to be transferred to another person's name and we both spoke to your call center for over 45 minutes and after 2 weeks and when we didn't get our request delivered, we spoke to your call center again and they had no record of such a request !! This basically means that your agent wasted 45 minutes of talk time for us and 2 weeks of waiting for nothing ! As well as she has received credit card information and other information during that call, which even wasn't logged !!
    2- I haven't been informed about of any transfer fees during that call which i heard about in the second call !
    3- When i got the line I got a free month of 3 GB broadband service which i cancelled on the 16th of December, again with your call center....and now i was checking my account online and again it is not done and it was just a waste of time with your agent and will only cause in having a disputed amount with your company !!
    Please check how your agents are operating and resolve these issues for me ASAP as companies such as yourself should not have such bad and low level service.