Baby boomers and social media, or not

Last week's Wall Street Journal served us an article on why email is dying. For my money, although email has ceded ground to other communications channels, it still has plenty of legs.

Outside of the tech elite, email is still the second best way to reach someone (the phone ranks as the clear first choice). If you are dealing with people outside of your social network, sending an email is the second best way to communicate non-urgent information.

Also, the shiny new social media toys we use today may not be in vogue ten years from now (hello and goodbye MySpace), but it's hard to believe email will ever go away. For example, snail mail, email's close cousin, has held its ground despite being faced with cheaper and faster competition. Fewer people letter, but bills still fill my mailbox.

Other means

That being said, even email can't reach all audiences. Some people aren't online, especially the old and poor.

My mother bought her first computer last week. My father owns an iPhone but has no interest in using the Web or email (don't ask me what he was thinking when he bought the iPhone). My grandmother uses email, but never checks her Facebook page. But, they all send cards and letters. They are not alone. There is large demographic who don't live on the Web and don't miss it. And yes, I know the demographic of people who don't use the Web shrinks every year. I read the survey from the Pew Internet and American Life Project:

• Senior citizens: Broadband usage among adults ages 65 or older grew from 19% in May 2008 to 30% in April 2009.
• Low-income Americans: Two groups of low-income Americans saw strong broadband growth from 2008 to 2009: First, respondents living in households whose annual household income is $20,000 or less saw broadband adoption grow from 25% in 2008 to 35% in 2009. Second, respondents living in households whose annual incomes are between $20,000 and $30,000 annually experienced a growth in broadband penetration from 42% to 53%.Overall, respondents reporting that they live in homes with annual household incomes below $30,000 experienced a 34% growth in home broadband adoption from 2008 to 2009.
• High-school graduates: Among adults whose highest level of educational attainment is a high school degree, broadband adoption grew from 40% in 2008 to 52% in 2009.
• Older baby boomers: Among adults ages 50-64, broadband usage increased from 50% in 2008 to 61% in 2009.
• Rural Americans: Adults living in rural America had home high-speed usage grow from 38% in 2008 to 46% in 2009.

While those numbers point to an overall rise in Internet usage, they also point to the limitations of social media. If you want to reach baby boomers, you will need to find a channel that speaks to the 40 percent of boomers who do not have broadband access. And if you are looking for the folks who did not attend college, nearly half of them can only be reached through traditional marketing channels.

The takeaway

Those of us in the tech bubble need to remember not everyone lives on the Web and some of the non-Webbies have money to spend. To reach those people, traditional media and marketing technique are required. In other words, just because you have a shiny new stick, you should not throw away the old bat that can still hit the occasional homerun.

Consolidation, bad customer service, disaster

As consolidation sweeps across an industry, customers suffer. Oligarchies stifle competition, setting prices and releasing products that meet their needs, not the consumers. For a classic example of this, see OPEC during the 1970's, Ma Bell before the 1980's break up, the music industry or, for a more recent example, the U.S. auto industry. The other lesson here is that oligarchies hurt themselves. The lack of competition leads to complacency, a failure to innovation and focus on the bottom line not the end user.

No where is this clearer than in the customer service department of large corporations. Every call to a customer service department starts with a machine and menu of options that generally starts off letting the customer know how to pay the bill. From the outset, the company sets the image that its chief role is to collect payments, not provide service.

Customer service departments in large corporations are similar to human resources. They work for the people providing the service, not the people receiving it. As a result, they stick to corporate policies rather than resolving customer issues.

A case in point: I recently cancelled my FiOS service with Verizon because I moved out of their coverage area. While I liked the FiOS service and the channels, especially now that I am living with a more limited and more expense lineup from Comcast because I am no longer in a competitive market, for the first six months of my relationship with Verizon, I was over billed. Problems that I thought were resolved, snuck back into subsequent bills.

Cable bills are paid in advance. That means, you pay for June service before you actually receive it. They also don't prorate your last bill, but ask you to send in the full amount and promise to send you a refund check 6-8 weeks later, if they remember. During all that time, they collect interest on your money. During a call to Verizon I point out that there was no need for me to pay the full amount of the June bill, they had cut off service and I returned the equipment so I could not siphon off services. Verizon said they hadn't determined the final bill. But why not, I asked I had been without service for a little over a week, why couldn't they simply prorate the bill on the spot? Because that's not the way it's done came the answer.

Verizon is by no means alone in this, when I switched over to ATT to buy the iPhone, each of my first four bills contained $40 of extra services that I never ordered. It took four separate 30 minute phone calls to finally resolve the problem.

I mention this not because I think everyone should check their bills carefully--you should--but these companies can get away with this lack of customer service and over billing for two reasons:

1) They think people will not notice that they are being over billed and they are right.

2) There is no penalty for over billing. In fact, because most of us sign one or two year contracts to get favorable rates, there is a penalty on us if we fight back by taking our business away.

Bad customer service is one symptom of a larger malaise, a lack of focus on the customer. This disregard for the end user is fine as long as the consumer cannot find other choices, but it kills the corporation when sea changes occur. Most often this sea change comes with a shift in technology, such as the oil crisis and the resulting demand for cars with better gas mileage or Napster and music industry reluctance to embrace the Internet.

In both cases, the reigning colossus lost because it tried to dictate end user behavior and failed as outside forces proved to be too strong. To be fair, both the auto and music industry had products that inspired loyalty, but as giants who focused on their bottom lines rather that what was good for the customer, they didn't innovate and are on life support.

Who is next?