Monday, November 10. 2008How "Brave" Exetel Is......John Linton ...a total misconception - Exetel is quite the reverse. I had two phone calls and an email earlier this morning from business acquaintances congratulating me on Exetel's bravery in raising its prices "across the board" in "these difficult times" when they were being pressured by the managers of their sales operations to reduce their prices to allow them to meet their 'sales targets' and other associated 'numbers'. I was somewhat taken aback by the effusiveness of the language used and also very surprised that they had been made aware of the minor changes we had made in the latter part of last week - none of them are in the communications business and none of them, at least as far as I'm aware, use Exetel services in either their personal or business lives. Each of them wanted more details on how and why we came to the decisions to increase rather than reduce pricing and how and why we went about it in the ways that we did. I suppose it was all very flattering up to a point but as I explained as plainly as I could it wasn't a decision we had any choice about. It seems to me that so many people "just don't get it". "It" being that Exetel is a very small company that operates on razor thin margins and is totally financed by the money of its shareholders who are also its directors and managers. So I told them that I didn't have a clue as to how the next weeks, let alone months, will 'play out' but that I had no reason to believe that anything positive was going to happen so I did what every financial management text book recommends in such circumstances - I raised our prices and froze our capex and hiring - stock standard 'uncertainty mitigation' with no hint of "bravery" and every 'hint' of uncertainty, fear and cowardice - fiscally speaking. When asked what impacts I had seen so far on aspects of our business I had to admit that, apart from a rapidly escalating number of payment defaults and some small business bankruptcies, order intakes had been, and still are, running slightly ahead of the original forecasts. This puzzled all three 'enquirers' and I had no better explanation as to why we had taken the actions we had before we had experienced any 'downturn' clear signals other than my personal "fear" (a long way from bravery) that it would be too late to 'take evasive action' once a downturn did become obvious. As I said to each one of them - I would love to be responsible for a company with fat product margins and big advertising and promotional budgets and be able to 'manage' the business without the burden of knowing any decision I made might destroy the brittle financial future that Annette and I have spent our lifetimes trying to establish as well as causing operational and possibly financial inconvenience to our customers, employees and suppliers. It would be good to be a 'hands off CEO' with advisers and divisional and line managers to take the burden of decision making and the subsequent consequences of not making the agreed targets. I don't, by choice, have that 'luxury'. I found it helpful 'listening' to three different decision makers talk about how they were going about dealing with what version of the current financial conditions in their industry they were confronting. While none of them was optimistic I suppose the consensus was that they didn't know to what degree, if at all, they should be pessimistic and where they should go, outside their own company and their established advisers, to get a better understanding. I'm not sure they found anything I said was helpful but it reinforced for me that the burdens of having no 'support' in making the decisions a small company has to make is very much offset by not having a bunch of divisional and line managers all aggressively pushing their own 'career' self interests rather than taking other aspects of the company's operational needs (not to mention the share holder's and customers and employees of other parts of the company) in to account. There are some, obviously significant, advantages of having all decisions made by a small group of people who have an intimate knowledge of all the factors involved in the decision making - and, of course, no-one to blame if the decisions are incorrect. It's an extremely uncomfortable scenario in difficult times such as these because you get to keep saying the words "I don't know what is happening" and "I don't know what will happen" and have to cope with the fact that the people you are working with look at you expecting you to then go on from that point - which a sensible person can't do. As the oldest of my acquaintances of this morning said when I mentioned this - "at least being told you don't know what is happening or what to do beats being told by someone they know exactly what to do and knowing they actually don't". We agreed that if the CEO of BMW could say he was in no position to provide even an estimate of BMW's 2009 revenue or profit less than 7 weeks before the start of that reporting period we were kidding ourselves if we thought we could do it for our respective companies (we were both mildly interested in the new 8 series due in 2010 which has just had its development canceled in the same press conference as the reference to the 2009 year we were both watching at the time) It was nice catching up with people I haven't talked to for a while and it was some comfort (like the interviews in Saturday's AFR) to get a first hand glimpse in to how other people are dealing, or perhaps more correctly - not dealing, with the current uncertainties in their different areas of the Australian marketplaces. I know I couldn't add anything to their knowledge and, unlike Exetel, they are, and have to be, reliant on input from people they don't think are advising them correctly but are still required to make decisions based on the arguments and 'facts' with which they are confronted. My guess is that their "marketing people" will prevail over their "financial people" and they will lower their prices and take the hit to their bottom line rather than take the harder, for them, decision of not allowing that to happen. I'm glad, in a way, that we didn't have any 'fat' in our pricing to allow us to have a choice.
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I would like to congratulate you also on having the bravery to increase your prices instead of trying to survive with less or by cutting staff.
To decrease negative feedback I probably would've added to the base plan prices rather than a perceived 'backdoor' charge, it is preferable to dumping staff or infrastructure (which probably would cost more than keeping it anyway). Even with this fee increase, I will continue to recommend Exetel to my friends and hope that one day my own exchange gets an Optus DSLAM. Actually, my only negative comment about Exetel is how your notification emails are worded. I think you would keep a lot of people happier if they were less adversarial. Maybe looking at getting a small PR company (because it is a good idea for them to work in similar ways and have similar motivations to your own) on retainer to help out with releases like this. Comment (1)
Thank you for the support and the feed back.
I'm always puzzled by comments that our notifications are "rude" and need to be 'marketingised'. I have just re-read the notification of the $3.00 account administration fee and I simply can't see how any person could find it rude/offensive/dismissive/whatever in ANY way. OK - I wrote it, as I do all such notifications, but, so help me God, I completely fail to see how any part of it could be viewed other than the straightforward and precise conveying of unwelcome news without any attempt to 'sugar coat' it. I may have mentioned in these ramblings that I loathe and despise "marketingese" that attempts to disguise/distort facts. Comments (7)
I think Wayne meant you should get a small PR firm TO sugar coat it.
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I see. I'm not a 'sugar coat' type of person and it has never occurred to me that Exetel should be any different.
Perhaps I need to re-think that position. Comments (7)
The Exetel headlines on Whirlpool are definately generating a Troll feeding frenzy.
I have noticed that there seems to be a large number trolls eminating from Internode -- I think they are just trying to justify in their own minds why they pay so much for their internet access. Lets be honest John , you do have an abrasive character -- but Id rather have you managing the ISP I use,than some chardonay swilling trendite whose opion of themselses is only exceded by their fear that Exetel may do them damage if Exetel arnt crushed now. John Lane in the aanet whirplool forums has been putting the boot in bigtime. Its amazing what kind of stories he can put together with cut and pastes - and out of context quotes. I have the benefit of actually being a long term customer of Exetel and exeperiencing what I consider to be an excellent service for an excellent price. Comment (1)
Thank you for your continuing support - I really appreciate it.
Me - abrasive? Good heavens I'm just a penniless migrant who is grateful to Australia for being so kind to me and letting me recover from my many mistakes and teaching me never to put with fu**wits. Three years living in Maroubra by yourself starting before your 18th birth day gives you a very good grounding in real people, real personal and financial issues and how to deal with dross. But I have to thank George Lucas who taught me, much later in life, that you don't have to be a Jedi Master to manipulate the weak minded. As for Internode's pathetic little d***heads or Eftel's human detritus attempting to destroy Exetel (what a laugh that is) I think that 2009 will be an interesting year. I'll have to take your word for Eftel's latest hysteria but based on what I've been told don't you just wonder how weirdly obsessed peolpe like the oleaginous John Lane and his twisted lickspittle lackey Jason Mikronis must be to keep a 'library' of my various posts on different media for the last five years? Come to think of it - it's pretty creepy! Comments (7)
A bit irrelevant but I notice that when I come in for one of my periodic bashings on Whirlpool it is almost invariably from Internode customers. I like Simon Hackett (I gave him a god damn award this year!) and also John Lindsay but what is it about their most loyal and activist customers that makes some of them the most obnoxious little twerps in the Australian blogosphere? And where do they get all that time from to post 24/7? Man, all Exetel did was put its prices up by a degree of cents a day. It gets bashed for trying to survive without adding to unemployment and eroding its service? Man.
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I think there is only one reason - and that is that those immature litte boys can't bear to think that any other ISP offers better internet plans/services than the one they chose.
Because they have no life - they spend their time on totally pointless attacks on entities they can have no affect on but it makes them feel like they are doing something. Cervantes summed up their damaged mental processes in his famous book. Comments (7)
Well makes sense to me if your revenue (after costs) from charging $3 extra is greater than the revenue you may lose if customers leave. Though as far as prices go, Exetel's plans seem to be the best value out there, so customers would have to have other reasons to leave other than price. As they say, however, it's the final straw that breaks the camel's back. So there will be people who respond by changing to another ISP, though I assume you're banking on this being insignificant.
I'm not an Exetel customer, though $3 would have absolutely no bearing on any decision to change to Exetel, whatsoever. That's as far as ADSL2+ is concerned. I assume it doesn't apply to HSPA since that would be a 60% increase on the $5/month minimum fee. Comment (1)
It's not possible to estimate the quantum of customers who might move because of a $3.00 ($1.90 for more than 50%) price increase - if I was to guess I'd say less than 20 customers but it wouldn't matter what number it is - we make so little profit on a customer at the current rates we barely break even so losing customers at the current rates isn't an issue for us.
The HSPA plans don't incur the account administration fee. Comments (7)
As a customer I actually thought it was quite a reasonable email. I harbour the sneaking suspicion that those who have been offended are of the opinion that businesses should be thrilled with their custom and kowtow to them as much as possible to retain it regardless of any commercial realities. It's odd.
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I read the email in it's entirety. To me, paragraph 3 read like an ultimatum. When I read it, I wondered if you were actually trying to slow/stop growth - as you have mentioned could be a plausible action in these times.
In the past some such paragraphs have included statements along the lines of 'we value highly all of our customers and do not wish to lose any of you, but as a courtesy have provided you with this penalty-less out' (not even close to those exact words, but along those lines). Anyway I am sure I will never understand all of your day to day business actions, let alone your motives for being in business, so perhaps this 'business action' is going exactly to plan. I will keep my personal opinion/feelings other than the above to myself as in reality $3pm cannot dissatisfy me with my service - which I doubt I will ever leave. Comment (1)
Graham, I always value your input and suggestions.
I will, as you and others have suggested, attempt to 'soften' my information conveying style in any future such communications. Comments (7)
I've been a customer for around 3 years now and have no plans to leave, even with this $1.90 (for me) increase.
I note that you have pushed the rewind button on the ADSL1 offerings as they are the same or slightly better when compared to what Exetel were offering at the start of the year. There are just fewer plans to pick from, no tiny quota and no large quota plans. Comment (1)
Thank you for your support. Exetel constantly makes minor changes to its plans as circmstances change with our providers or in other areas that affect our business.
We removed the high download plans because we could no longer offer the lowest costs at those levels and, effectively, we would lose a great deal of money on them if we attempted to even match the offereings of some competitors. The same applied, to a lesser extent, to the very low end plans. In good times we could afford to offer plans/classes of plans that made no money - in bad times we can't do that. Comments (7)
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