I wonder how many people, business owners and consumers alike are experiencing excessive frustration, anxiety or even depression as a result of the Confusion Marketing tactics employed by some businesses? Confusion Marketing is the controversial strategy and practice of deliberately sending confusing marketing material in order to hinder consumers’ comparisons with other similar offers.
Many examples are to be found in the telecommunications, banking and finance sectors, where pricing plans, contracts or interest rate offers can be so complicated that it becomes impossible to make direct comparisons between competing offers. You will find that with companies that employ such tactics that when you want any form of customer assistance to sort out your bill, statement or service issue, you might as well resort to prayer because that is likely to be more useful than the current standards of service on offer. Confusion Marketing is the opposite of what we endorse as ethical, transparent selling and business practices. Sadly, Confusion Marketing is still classified as a legitimate selling strategy, but is really nothing more than deception, sleight of hand, trickery. Like smoking, just because it’s legal doesn’t mean it’s right.
In March 2006, Theresa Gattung, former CEO of Telecom New Zealand, courted controversy by characterising telcos to a Sydney audience as not “straight up” with customers on pricing. “Think about pricing,” the press quoted her as saying, “what has every telco in the world done in the past? It’s used confusion as its chief marketing tool. And that’s fine … But at some level, whether they consciously articulate it or not, customers know that’s what the game has been. They know we’re not being straight up.” On February 2, 2007, Gattung announced that she would leave Telecom at the end of June 2007. The net results of Confusion Marketing show there is very little loyalty and a great deal of company switching, subsequently wasting valuable time and energy which could be dedicated to other more productive tasks. Even Einstein would have trouble working out the confusing, ambiguous contracts on offer.
Expensive Mobile Phone Bill
Bill shock is an obvious result of confusion marketing for all the wrong reasons. Bill shock can generically be used as a term for the surprise an individual receives when the amount owing on their bill is higher than expected. Other examples of bill shock have been noted in credit card bills, rental bills and utility bills.
The amount of anxiety and distress an individual faces due to these circumstances shows the extent of how poor this business practice is. I wonder just how many man hours are wasted in lost productivity because people are forced to spend hours and hours working through the finer details to make an informed choice.
The same can be said for the hours spent on the phone waiting to get through to someone intelligible to work out a dispute when confronted with Bill shock or incorrect bills. The Productivity Commission would have a field day trying to work out just how much of our time and money has been and is wasted because of Confusion Marketing. I would love to send a bill to our current telco for all the hours my business manager has had to spend to get our telecommunications plans working effectively, and even then there are still issues. Based on present calculations, I would be able to send a bill for $4,000 at least. I wonder how they would respond to that.
Since 1 July 2010, Bill shock is illegal in the EU. Eurotariff protected consumers by introducing a cut-off mechanism once the bill reaches €50 per month, unless they choose another cut-off limit. There is speculation that this legal precedent will be copied internationally causing quick industry response on solutions for the problem. Maybe we could get Confusion Marketing made illegal as well? Perhaps then those businesses and markets that still choose to indulge in this dubious practice will to start to be better business citizens and take responsibility for their actions. We live in hope.
Remember everybody lives by selling something.
Author: Sue Barrett, MD of www.barrett.com.au
Having worked in the telco industry selling mobile phone plans I can attest to the confusion of said plans. The number of mistakes made when clients request changes is very high, because no one really understands the multitude of call plans and the quite often the consequence of making changes – not the carrier, not the customer.
The sooner Confusion Marketing is made illegal the better, how any right minded company would get involved in such tactics beggers belief – but unfortunately they all do.