Consumption 2.0 and Mobile Society

I’ve just read an article by Hugo Garcia of Futures Lab in Portugal in the latest issue of The Futurist. He was outlining how younger people today are more mobile, more focussed on consuming goods, services and experiences, rather than being attached to things and places. One area that he was strong on was the fact that people are now so mobile and keen to explore the world and their environments.

Location becomes far more important because you are continuing moving around as opposed to tied to a fixed location in the world. He said that one example is the trend towards not owning a home, perhaps ever. I always hear talk about how hard it is to get into property, I don’t think it has ever been easy. When we bought our first home (to give ourselves and our children some long term security) we bought in a cheap neighbourhood and at one stage were paying in excess on 20% interest. For a couple of years in the beginning, we went without pretty much anything, just to pay the interest. Today many don’t want to restrict their lifestyle, making it a choice, their choice is to live for today.

The ‘office’ is for many people today, especially knowledge workers, not somewhere we need to be a lot of the time and the cost of maintaining an office, commuting, car parking (you could almost rent a room for the cost of my Auckland City car park). We go to the office when we need to, for meetings, teamwork etc, but otherwise I can be much more productive from my home office.

Hugo talks about shared mobility. This is not a new concept, but certainly one that is coming back with a vengeance. Back in the 1960’s the Provos introduced white bikes that anyone could use. The idea was that you grabbed a bike, rode it to where you wanted to go and left it there for the next person to use. Their concept, same as today was to reduce pollution and traffic congestion and promote community engagement. They were certainly engaged as very quickly the bikes were stolen and repainted, but the idea was very good.

Today carpooling continues to grow, Zipcars, recently purchased by Avis, which is currently being debated as to whether it was an anticompetitive manoeuvre, is an example of car sharing, which in principle makes a lot of sense. People share ownership in boats, holiday homes and other items and many people are travelling around the world using the services of portals like Airbnb. There are loads of companies sprouting up like Whipcar, which lets you rent out your own vehicle when you don’t need it.

Globalisation is also an area that is changing rapidly. I remember reading history books about the great depression and how people moved from town to town looking for work. Mobility today is something far more international and international borders are being crossed continually by people in search of work, whether it is because they can’t find it at home, want a better life, or simply enjoy the itinerant lifestyle. Over a million Kiwis are working and living overseas, while British and other nationalities are moving to New Zealand to work on projects such as the reconstruction of  Christchurch.

Hugo points out there are pro’s and cons. “Unfortunately, some areas may become abandoned because they lack competitive advantages. The war for talent between countries will increase, but regions that offer good living conditions may gain an advantage.

I note again that knowledge workers, one of the biggest industry segments today can often work from anywhere and travel when required. I know many journalists and developers that live in small towns for the lifestyle, but can still perform on a global stage.

This mobile society opens up huge scope for innovation and disruption, particularly with location based services, applications for mobile use, which can support the new mobile lifestyle. Kiwi developers can and are developing applications used globally, despite those that say you can’t be successful unless you are in Silicon Valley, things are changing. The money may be there, but they don’t have a monopoly of good ideas.

If anyone knows about a mobile lifestyle its Kiwis, anywhere is a long way from New Zealand. We know how to travel, we absorb and learn and we love new technology. Where we need help is harnessing our smarts, to help our innovators and entrepreneurs to learn how to scale and think big. That’s a tough ask and I don’t think our Government is doing anywhere near enough to ensure that smart people are able to grow from small concepts to large global enterprises.

I was just asking myself how I suddenly got on my soap box, but then I’m not sure I ever get off it:)

The Problem With Consultants

What is the problem with consultants?

Consultancy is one of the fastest growing sector in professional business people, the USA alone has over 700,000 of them. IBM Global Business Services and Ernst & Young have almost half a million consultants between them alone!

They charge a lot of money for their expertise and knowledge, if you get one through one of the top firms like McKinsey and Boston Group are unlikely to give you any change out of thousands of dollars an hour. Of course what you are buying in many cases at that level is something you already know, its more a corroboration perhaps when you are making a decision that has significant implications for your business, especially if you are looking at taking it into green fields, although most large businesses don’t take those sorts of risks in the first place even if the potential gains are huge.

Given that IBM possibly has the largest group of assembled business consultants of any company in the world, I guess the adage that no one ever got fired for buying IBM (not strictly true) still carries a cloak of implied job security for decision makers.

Perhaps it is the fees that put people off consultants especially when compared with the salary packages of the people who are hiring them, often to tell them things they already know, or for mining information from employees of their own company. Of course consultants don’t have job security between consults and often can’t even talk about what they did for their clients to earn those dollars because the IP is commercially sensitive. Do you get better value from a consultant who works for a top 1o company, or one who is self employed? Maybe, sometimes. Often not.

As a consultant myself, I think a common problem that people have is that the information they provide is known within the company, but for various reasons it wasn’t available to key decision makers, or they didn’t want to hear it from staff who sit below them on the corporate ladder. It is also frustrating for companies when it appears that the solutions or recommendations that consultants make seem to come so easy for them. It also frustrates many companies that they aren’t able to get those answers from interns and graduates they employ who they expect to have the latest thinking on their industry.

The problem for the graduate and the difference between them and the business consultant, is that the good consultant has business experience. They may have specialist knowledge in an industry, be that biochemical nano technology, banking or retail They have years of experience understanding and finding solutions for problems.

A key thing that I bring as a consultant, is that I don’t have emotional baggage in your business, I am not phased by who is the boss, I am not married to the corporate Business As Usual credo of ‘this is how we roll’. I can see things that might be staring in your face and you don’t see them, because we are wired differently. I’ll tell it to you how it is.

I am also passionate about solving business problems. I get out of bed excited about the opportunity to understand your business and help you to find solutions to your problems, how to grow your business, how to find out what your customers really want and need, how to harness the knowledge your people (your most valuable asset) have and want to share with you. I can save and make you money. Sometimes I can do that very quickly with knowledge I already have after many years of working in a variety of roles including my own companies, sometimes it may take weeks or months. I can take knowledge from a wide range of industries and transpose them into relevant solutions for yours.

The problem with consultants is that people bring them in too late. Why wait for an ambulance at the bottom of the cliff? Why not talk to specialists on your way up who can help accelerate your progress and help prevent costly detours or mistakes?

The problem with consultants is sometimes they will tell you what you don’t want to hear.

New Beginnings for Luigi Cappel

Hey folks and valued readers. It has been a few days since I posted and I just wanted to let you know that there have been some changes in my career, but that I am still around and will continue to share my thoughts and interests in this blog.

After 8 years it was time for a move from Geosmart and I have now joined a relatively new company called Imersia as CCO. Imersia was founded in 2009 by entrepreneurs Dr Roy Davies and Jon Lowther, a couple of very clever guys with ideas about the world we live in and the world we want to live in, similar to mine.

In a nutshell we are working in location based services, mobile, Augmented Reality, proximity based marketing, GPS and more across a wide variety of industries with a local flavour, i.e. the business is based in New Zealand and we would like it to stay that way if possible, but a global focus. Effectively I am walking the talk, I have spent many years consulting and evangelising, I’m still doing that, but also much more on the creating side, at least from a company perspective, I’m not a developer myself.

So stick around, don’t delete your RSS feed because I still have lots of exciting ideas, if I say so myself, about leading the way into the future we want, from a technology perspective, but also about the kind of world we want for our families and future generations, cool toys and business tools as well as a safe and sustainable environment. I am ever the idealist.

New Zealand is full of clever people and I am hoping we can enable more of them to take part in the global stage. I’m keen to see some new names appear in the lists of Kiwi innovators contributing to our GDP and being supported by our Government. I love names like Tait Electronics (I spent 7 happy years working for them), Gallagher Electronics and Fisher & Paykel, but isn’t it time for some new kids on the block?

Watch this space:)

Luigi Cappel

The Near Future in Mobile and Location

When I got my first in a series of Palm’s (I still have most of them including the Handspring Flossmaster) people looked at my as if I was a geek. OK maybe I was, but I was only doing what many or most of you are doing now, mobile computing. OK, the dental floss dispenser was a bit of a gimmick, but a very cool one and it was actually done as a promotion, not as a serious concept.

Handspring Flossmaster

So back in the 90’s I was reading eBooks from Fictionwise and other sites which are amazingly still there even though Palm and Handspring are long gone. Fictionwise was already there before Amazon was launched and several years before the Kindle existed. I used to use my PDA during dead moments in-between appointments, while exercising etc. I had apps for Africa, work outs, diaries, games, even mobile email at 9.6kbps on my Ericsson mobile with its expensive Bluetooth dongle.

I helped introduce the first Symbol Palms in New Zealand with bar code readers and whilst they are now running a different OS they are fundamentally being used for the things I suggested such as warehouse inventory management, field sales automation, ticket management at events and so on.

Then my devices got audio and became phones, so I could listen to music, podcasts and started publishing my own podcasts and getting my songs on other people’s shows through to the last few years when my Smartphones got GPS. During that time we went from PDA’s that could also function as phones through to now where our mobiles are powerful computers that are as ubiquitous as I said they would become.

So here are a few thoughts on what is coming next, things that you dear reader are likely to take for granted within the next few years.

As a consequence of your use of check in functionality on your mobile using Facebook, Foursquare, Google+ or whatever software you chose, details about your interests, your friends and family and your activities will be profiled along with most of the people you know. You will get notifications based on where you are and your interests, on your mobile offering you relevant deals as well as a load of spam that will have you wondering whether you should disconnect alltogether, but you won’t.

Your mobile will be your multi-modal navigation device, not just while driving or keeping the cabbie honest, but walking, running, hiking, boating, shopping, providing navigation on the road and even inside buildings such as shopping malls, hospitals and university campuses. You will be able to see where your friends and family are and you will be offered deals based on mutual interests and be able to buy them and pay for them on your mobile.

You won’t have to carry loyalty cards any more. They will be maintained on your mobile which will give you the option of looking for deals, comparing prices and getting directions to the nearest retailer with whom you are a loyalty member. You will also have the option of having your mobile notify you of deals based on its prediction of your needs. For example on a Saturday morning when it sees you are buying garden tools at the DIY, it may offer you a promotion at the nearby garden centre which is uniquely created for you.

You will have a personalized newspaper on your mobile which carries both stories and advertising offers of specific interest to you. You will be surprised at first at how relevant they are. You won’t have to search for stories any more and you won’t be pushed information you are not interested in. You will only buy newspapers on rare occassions and within a few years printed newspapers won’t be available any more.

Music is an interesting one and the way you enjoy it will change dramatically in the near future. Within 24 months music CD’s will be out of production and you will either subscribe to a music service with a monthly subscription or possibly it will be offered as part of a mobile offer from your telecommunications provider. The question at the moment is whether the major music provider will be Apple, Nokia,  Vodafone or a service such as Spotify.

For those who want to really get into their artists, you will be able to download apps. Several years ago I wrote a piece for NetGuide, which they declined to publish. I said that CD’s would die because the record companies were not providing any added value. I suggested that they add music videos, interviews, digital photos, background stories, lyrics etc to the media. It wouldn’t have cost them anything because it was all material that they already had access to. Anyway, long story short, guess what is already available to an iPhone, Android or other device near you? All of those things. Bands and their management are using off the shelf tools to put all of these things onto mobile devices including gig calendars, social media and the ability to purchase event tickets and merchandise from within the applications. They will also allow you to communicate with other fans from within the applications and future functionality will include the ability to remix tracks and record your own cover versions to share with other fans. Competitions and special offers will also be included.

In future when you go to a concert you will be able to hold your mobile up towards the stage using facial recognition to identify the performers using augmented reality and take tagged photos showing the names of the artists and of course the location the photos or videos were taken. Of course the facial recognition will also identify your friends and associates for posting and sharing on your favorite social media pages.

I could write a book on this stuff, but I thought it was time I shared a few things with you before they start happening and you take them for granted. I like being able to say “I told you so”.

In finishing I note that Apple have just filed a patent on mobile facial recognition. They also mentioned biometrics, funny, I still have a HP iPaq with a finger scanner. Want to know more about facial recognition? Here’s a quick 2 minute primer.

Smart Wallet Coming from Google

The Smart Wallet is coming says the Herald this morning.

I’m sorry but I have to laugh. A number of us have been trying to convince Vodafone and Telecom in New Zealand to do this for years. All I used to hear was ARPU and its not core business, while I was saying imagine having half a percent of the revenue. It’s a ubiquitous device people, your mobile is the only thing you always have on you, perhaps besides your wedding or engagement ring.

Ericsson had a proof of concept drinks vending machine in Auckland where you could  text for a drink at least 15 years ago. New Zealand used to be a centre of excellence for Voda back then. NZ was the first to mass adopt EFTPOS in the world, many other firsts, but then we fell asleep. ARPU doesn’t just have to be about data and voice revenue people. Ask eBay what business they are in, its not selling products, its financial services and transaction facilitation, I’m sure they say it better.

Sometimes its hard getting people to listen at the bleeding edge, but imagine if you had listened way back then, which was before Google sets up workspace in Susan Wojcicki‘s garage!

I remember loads of coversations with people like Adam Clark at M-Com, going back even to our days at Advantage back in the late 90’s, along with other members of the Wireless Data Forum where we worked hard to try to drag people into the future such as in this Herald story from the turn of the millenium.

Sorry folks its soap box time. We have so many clever people in this country and yet our leaders don’t recognise the opportunities to cash in on their expertise and knowledge. Years ago we lead the world in many ways including banking  and financial systems, EFTPOS, retail barcode scanning and much more. We still have the expertise, but we seem to have dropped into a spiral of this is the way we do business, its prudent, reliable and safe. Or perhaps they are saying that ots too late because Google is already doing it. But guys, we told you to do it before Google existed. Google isn;t forever and it doesn;t mean that noone can get great ideas of the ground.

If you follow publications like Harvard Business Review, Futurist Magazine and other forward looking publications, they will tell you that your greatest assets are your people, your staff. When was the last time you sat down and asked them what they thought, right down to the intern who’s pushing the mail cart? Why do so many people leave their companies because they feel they can do it better? Recent surveys say half of Kiwi workers want to leave their jobs. It wasn’t all about pay as the following quote shows:

“Asked what they most wanted to improve about their workplace, employees’ top gripes were “systems and processes” (41 per cent), communication (39 per cent), and rewards and recognition (38 per cent).”

There are those who make things happen, those who watch things happen and those who wondered what happened. There are also those who said it would happen but couldn’t get people to pay attention until after it happened. Of course being first doesn’t mean being best or being dominant.

Now as to testing with NFC. I watched a demo with NFC in the Netherlands in 2009 and it was cool. There were 2 phones in Europe at the time that had NFC, both from Nokia. Now that Vodafone is going to have a look at NFC in NZ, how many models of phone do we have that support the technology today? How long would it take before an early majority of people had a capable device? Just because Google is looking at NFC, does that make it the best technology? Are there alternatives? If we were best placed to implement mass adoption of EFTPOS and bar code scanning, could we be well placed for m-Commerce on mobiles? Ask Rod Drury or Adam Clark.

I’m just saying……………

Moores Law in Location Based Applications

Have you ever noticed that whatever application people come up with, you are always hungry for the next big thing? Well I am, especially when it comes to mobility and location based applications. I and several of my friends and associates tend to look 5 years into the future on a regular basis and are always looking to innovate with features or technology that either doesn’t exist yet, is still too expensive, or the target market still doesn’t get it. That’s probably where we will always live.

The good thing about that is that as a consequence of our focus, the building blocks for the things we dream about become much more apparent to us when they arrive and we want to share those things with you.

There were 2 standouts for me this week. The first is that Foursquare is launching push at their hackathon which starts tomorrow. You can read more about this on my GeoSmart blog. Basically it means that developers from tomorrow will be able to use an API that sends a push notification for users of their apps. For example a bar could send a notification to you telling you that there are friends of yours in the bar and offer you a deal to come and join them.

The other is in combining Location Based Technology with Game Mechanics, or Gamification. There is a very good 101 presentation about this on Slideshare by Aaron Strout of WCG.

I’ve met with a number of people developing location based games and the game element is a factor that I believe will really pull people in. I have just downloaded TapCity onto my iPhone and iPad after watching a podcast video interview on Untether.tv (one of my favourite location based podcasts) with Dave Bisceglia co founder and CEO of The Tap Lab. I strongly recommend that you watch this video or listen to the audio version if you are interested in location based games or proximity based marketing. These guys have big plans and dreams and I believe they are going to be a huge success. I have to also mention how impressed I was with their response to a couple of questions I had from them.

If you join the game, you will find I have 2 personae, Luigi C and Claes C, mainly because I first set it up on my iPad and then found that it was more suited to my iPhone. Anyway try out the app which you can download in the iTunes Appstore for free, friend me and tell me what you think. I was pretty impressed that for a relative start up, they already have players all over the world, in fact someone already owns my office! I won’t settle for that, but was impressed that it was even there.

The concepts are all very well, but if you want to look at proximity based marketing, location based games etc as part of your marketing plan, the best way is to experience what someone else is doing. As you will learn in the interview or on their website, this is just the beginning for them. They have some very exciting plans. What I don’t know as yet is whether they plan to release API’s or whether all their development is going to be inhouse.

Either way we can learn a lot from these people. I hope they are hugely successful in monetizing their games both for their innovatio and foresight and to show everyone else that this can work. If they can sell virtual items in the same way as Zynga has on Farmville, then imagine what Burgerfuel, Borders, your regional tourism operator, world cup events like rugby organisors could do with real items!

Presenting to IT Professionals with Sead IT People

A couple of weeks ago I had the privilege of presenting to a group of ICT professionals at the Mercure Hotel hosted by Sead I.T. People. The presentation in the series of Sead Latest in IT Seminar was on Mobile Marketing.

How did we get here

Sead Presentation

Covering topics including the latest Gartner Hype Cycle predictions, Location and Proximity Based Marketing, Check-In Marketing, Mobile Computing, QR Codes, Business Intelligence using maps and the hot topic of the use of personal devices in a corporate market, there was something in it for everyone. Case studies illustrated not only practical use of technology, but professional processes to ensure that projects were well designed for success.

The presentation outlined the ongoing chasm between people in the ICT profession and their colleagues when it came to understanding and use of new technologies, particularly mobile and location based. I encouraged the audience ranging from consultants to CIO’s to consider how they can educate and encourage their companies to understand the new technologies and how they fit into their business frameworks. There are great opportunities for IT people to be welcomed back into the boardroom by working closely with the management team to show them how to implement and benefit from new technologies, safely and securely.

Luigi and the Sead Team at the Mercure

The Aftermath of the Christchurch Earthquake: BAU?

So Christchurch had a devastating earthquake and of course the situation is going to take years to get back to a new form of normal. Some people have left, more will leave, some may go back one day. Some suburbs will cease to exist, or will perhaps become memorial parks because it is too risky to rebuild, both financially and from a human risk.

In recent blogs, I’ve wondered what we learned. I’ve been exploring some key areas and also thinking about human psychology and how not only do most of us think it will never happen to us, but we also tend to think it is someone else’s responsibility to do something about it.

So in the blogs to come, I want to look at a number of aspects of perhaps what should be done and who should take responsibility, because BAU or Business As Usual doesn’t seem a suitable answer. We all have immediate needs and there are things we can do to prepare at all levels, individual, family, local and regional government and much more.

Here’s what we know beyond any doubt. Natural disasters happen. They generally give minimal warning. In Japan they had 1 minute warning of the big earthquake and in some cases up to 30 minutes warning of the tsunamis.

New Zealand is on the ring of fire and has always had earthquakes. We rose out of the sea through earthquakes. Our magnificent mountains rose from the sea as the plates moved and squeezed them out. Maybe with a bit of help from Maui if you like.

Christchurch surprised some people and others though it was obvious with 20:20 hindsight. What we have also been told for years is that a big one will happen in Wellington. We have also been told that there is a very high likelihood that a new volcano will appear one day somewhere around greater Auckland. It could appear at sea, it could appear anywhere. Just have a look at the location of current volcanoes.

 

 

 

 

 

 

 

We are made up of a number of islands in New Zealand. We love our beaches and coastline and many of us live within walking distance, or conversely within tsunami’s reach. We don’t believe it will ever happen to us, but then why have Civil Defence set up tsunami maps and early warning systems?

 

 

 

 

 

So this will be a series of blogs on what we can or should change. I will look at short and long term. I will look at what we as the public should do for ourselves, our families and our community. I will also look at segments such as insurance companies, Telecommunications providers, power companies, food businesses, manufacturers, distributors and retails, Civil Defence, oil companies, the education business, health, SME and Corporate Business, Town Planners, local and regional government, traffic planners (I’ll be at the IPENZ Conference this week) and more.

I’d like to start with a little survey and would love you to participate:

The end of Whitcoulls and Borders in New Zealand

If you have a Borders or Whitcoulls voucher, even if you hate the idea of spending double to be allowed to spend your voucher, I recommend you do it quickly, because within a couple of weeks it will be worthless. It was interesting to see that there is no mention of the current situation on the Borders website which talks about eBooks coming soon, although Whitcoulls have been a bit more responsible with a home page announcement.

The demise of these companies isn’t about eBooks, it is largely around debt as pointed out by Liam Dann in this morning’s Business Section of the NZ Herald.  and the business models. I’m not going to discuss the debt because that doesn’t reflect on the industry itself, it reflects on higher level financial decisions and the economy, not on the book trade.

Book stores and music stores are in industries that are steeped in history of “this is how we’ve done it for the last 50 years and why change it if it aint broke”.

As was mentioned in today’s NZ Herald story by Isaac Davison, “In 2010, 9.67 million books were sold, an increase of 1.2 per cent in volume but 0.1 per cent down in value against 2009. This was despite the mark-up on books in New Zealand, which saw paperbacks sold for as much as $20 more than online, even after shipping costs.”

So much for Amazon (of course there were a huge number of Kiwis including myself who purchased from Amazon as well) being the cause of the demise of our local stores.

I also appreciated the comment in the same story from Jo McColl of Unity Books that many people bought hard copy books as a consequence of having purchased eBooks. I’ve done that too. I read eBooks, listen to Audio Books and still have a personal library of around 2,000 print books. The same with music, I listen to lots of music online but have still purchased at least 10 CD’s so far this year.

I might have to go to a separate blog about how Whitcoulls and Borders business model needed to change in order to stay viable and vibrant (ignoring REDGroup‘s debt which doesn’t reflect on the book trade business model itself) because for these guys its too late unless they get a savvy new owner (who will not purchase the chains’ debt) who is ready to adopt a new business model.

REDGroup have called in Administrators. I don’t care who the administrators are. Their role is a short term one and it isn’t about changing the business model or trading back into profit. It is about the creditors.

They will try to negotiate with the book publishers and wholesalers and other suppliers who are desperate to get paid for their product and worried about their future viability in NZ. Inland Revenue want their taxes and will be first in the queue.

They will need to negotiate with the 1,000 staff who will have to have new short term contracts and will be justifiably worried about whether they will get paid at all, let alone have a future with the chain, but at the same time, will be essential should they find a new buyer for the chains.

Based on the outcome of their negotiations a decision will need to be made on whether to go into receivership which is next most likely step. If that happens, enjoy the book sale, because there will be many bargains up for grabs.

The shame of it is that (outside of the decisions that got REDGroup into this financial position) the problem in the trade is that the business model needed to change and like the music industry and other industries, the people running them don’t get it. They should have learned from the music industry, which still doesn’t get it. Other industries who don’t get it include banking, telecommunications and consumer electronics to name a few.

What should they have done and what can other retail businesses do in order to not follow Borders and Whitcoulls into the mire? Subscribe to my blog and I’ll give you a few pointers for free. It isn’t rocket science, but it is a fundamental shift in thinking, whilst also remembering the fundamental simple principles of retail and distributon.

We live in a new world, its exciting and there is a lot of money to be made, but the fatal flaw is thinking that if you do the same thing you have always done, that you will get a different result.

There is an RSS feed to this blog. Come back and read some of my ideas on how companies like Whitcoulls and Borders can thrive and prosper.

Here are a few things I would look at:

• Understanding your business
• Communication with customers
• Communication with staff
• Distribution methods
• Stock turn and inventory management
• Engagement
• In Store Events
• Proximity based marketing
• Shelf Management
• Relationships with community
• Relationships with education
• Location Based Business Analytics
• The Internet
• Gift Registry

I could and probably will go on. The answers are a mixture of the old and the new, neither of which these chains have effectively managed. Borders started in the right direction in the US, but didn’t continue the evolution. International chains like Borders and WH Smith focussed more on the  era of globalization than evolution of the business model. Something that would have made short term heroes who have probably made their money and moved on, but was only ever going to be short term.

Air NZ Customer Service

I was going to blog about 3D Bio-Plotting today and if this is of interest to you, bookmark or subscribe to the RSS feed. This is going to be a very exciting disruptive technology that has the potential to have a huge impact on our life expectancy and the health industry.

In my last blog I wrote about how John Donahoe, CEO of eBay has a good understanding of what business eBay is in and it isn’t helping people buy and sell things online, or about their recent purchase of Red Laser for comparison shopping.

I wonder if Air New Zealand really understand what their business is at times. If you read their Vision Statement and Guiding Principles, it doesn’t say anything about the travel experience, or about the social relationship with customers or being the facilitator of people’s dreams. In fact a lot that Air New Zealand does is about that, but at times they seem to lose track of that and of course their major focus is on delivering a dividend to their share holders. The bottom line is people do business with people, like me. Individuals who have feelings, not just bums on seats as they say in the hospitality business.

In What Would Google Do, by Jeff Jarvis, still one of my favorite books, this is what he says about airlines:

Air travel’s business model today is based on overselling seats, billing us for checking bags, charging us for pillows and pretzels and just about everything they can think of but air………………. Does that sound familiar. I know it is hard to run an airline profitably, but as someone who has traveled around the world at least a dozen times, there have been many years where I spent 4 months of the year travelling, I understand that traveling is stressful and tiring and little things like being stuck in transit at San Francisco Airport for 8 hours because the Air NZ counter doesn’t open till 90 minutes before the flight and they don’t have an interconnect deal with their partner Lufthansa can be frustrating. They don’t engender loyalty, which I can assure you cost them a lot of money from me from time to time. I have also declined the two invitations to take out an Air NZ Platinum American Express Card. Why would I support an organisation like that, which doesn’t put me first?

Anyway, I started this blog because of frustration over my latest experience with Air New Zealand. Now I have to say that all the people I have spoken to at their service center have been friendly and polite and helpful to a point. But they fall down on some simple things like detail.

So here’s what happened. Last year my wife an I booked flights to Sydney to attend a wedding in Hunter Valley. Prior to the wedding, we were told that my father in law had weeks to live as he had a recurrence of cancer that he was not going to beat. We had to cancel the flight for which we paid $944.20 including taxes and Air NZ said that due to compassionate grounds they would hang on to our money and allow us to rebook at a later date within 12 months, which we thought was reasonable.

I re-booked in January for a trip at the end of this month (I have flown with Air NZ a number of times since then including a trip to Rarotonga in October). I gave my credit card details for the $150 re-booking fee (for 2 of us). Yesterday I went to print off the tickets and organize travel insurance and there was no email. I rang the call centre to find out why and after being transferred and disconnected and waiting a while to speak to someone again, I was told that the flights had been cancelled because they hadn’t been paid for. I was flabbergasted. I gave her my credit card details on the spot, but on checking yesterday, my card account had not been debited. I have already paid in advance for accommodation and we had both applied for leave etc and made arrangements to meet friends over there etc.

Anyway, the nice friendly chap I spoke to went and spoke to his supervisor and apparently, they can still get us on the same flights, but it would now be more expensive for the transfer fee of the tickets. They wanted to talk to the call center person who arranged the booking for us and she is not back until Monday, so they will get back to me on Monday or Tuesday.

So here’s the thing. I have no certainty for one or two more days that I will in fact get those flights and I may have to pay more for my tickets than the extra $150 which in itself would mean that we are paying $1,094.20 for 2 return flights to Sydney from Auckland, at the same time that Flight Center is offering one way tickets for $79 plus taxes (including one bag) at their travel expo.

I can’t believe that the supervisor couldn’t have just authorized the deal on the spot and taken my credit card details once again. What does it cost them for their time to document the discussions, chase the previous consultant who I believed had booked my flights, confirm back to the consultant who I spoke to yesterday and then have him ring me on my mobile to hopefully tell me they will honor the arrangement we had made in the first place. My cost is of course stress for myself and my wife as to whether we will be on the flights booked, that we won’t lose the money we prepaid for accommodation and so on, and it certainly sours our anticipation of a nice little holiday.

On top of that Air New Zealand have had the use of just under a thousand dollars of our money for free for a year. Wouldn’t it have been cheaper and more expedient to just say, sorry, something has gone wrong here, we can’t explain it, but if you will give us your credit card details again, we will send you a confirmation email in around 15 minutes. We hope you enjoy your trip with Air New Zealand. Then I would be writing a blog saying how wonderful and caring Air NZ was, even after they had clearly slipped up. It’s been my experience that often its not the problem but the way it is dealt with that makes all the difference. Frequently when a company has a problem and deal with it well, they will end up with more loyal clients than they would have had if the problem had not occurred in the first place.

OK, I’ve had my vent and will let you know if Air NZ fix things for me or not.

In the meantime, what about your experiences with airlines. What do you think of their visions and their customer service? Do you feel they have a good balance between customer service and shareholder satisfaction? Are you loyal to a particular airline? Why?