Before you read the full story, I want to start with the fact that Vonage gave me great customer service, but getting there was an unnecessary adventure.

Back in August of 2009 I signed up for a Vonage phone line when AT&T dumped their VOIP service in Colorado. I was happy with AT&T Callvantage for years and had actually left Vonage for AT&T years ago because of frustration with Vonage’s service issues and dealing with their call centers in India, which have since moved back to the United States.

In February of 2010 I realized that I was using the phone on rare occasions. Using the combination of my iPhone, Skype and Bria was a good one for my personal and business needs. When I called to cancel Vonage I was reminded of their exorbitant early termination fee. (I consider this common telecom company extortion. Can you name one other service you have to pay to stop using? But we’ll save that for another post.)

It was cheaper to finish out the contract at $10 (plus $6 in taxes and fees) each month for 100 hours of local service, which I knew I wouldn’t use, rather than pay the early termination fee. So I agreed to that change.

On August 30, 2010 I called and finally canceled the service, or thought I had. A few days ago I noticed that I had been charged $16 in September and again in October. I called Vonage yet again to correct the mistake. For an hour I explained the situation to their representative and then to his supervisor, who said they did not have the power to issue a refund for the $32.

Their notes showed that I had accepted a free month of service in exchange for continuing the service, which is not an agreement I had made, though the representative kept trying to push me into accepting it. They were robots following their scripts with a mandate to not let a customer leave easily.

During conversations with both of them I did something I have never done in these situations before: I mentioned that I have over 30,000 Twitter followers with whom I would be sharing my experience. They didn’t seem to care. After they acknowledged that my account notes demonstrated I had dropped to the lowest plan in February, they claimed the only way they could help me was to cancel my service and possibly issue a refund later.

According to the supervisor I spoke with, any refund issued would still require them to review the August 30th recorded phone call to confirm that I had not accepted a free month of service (which, incidentally, they had charged me for anyway). I asked the supervisor why anyone who was forced to pay for a service for 6 months that they wanted to cancel would agree to staying on for a free month. Any thinking person can understand how illogical that argument is.

Ideally, a good customer service rep would acknowledge the mistake and rectify the situation in a way that the customer leaves feeling good about the company. This would result in the spreading of positive stories about their experiences with the company. Instead, the people I dealt with repeated in a mechanical way that they understood my problem, but that they couldn’t solve it.

What a difference 17 hours and 30,000 Twitter followers makes!

I posted a note on Twitter about this at 5pm Thursday night. By 9:30 am @Vonage responded to me by asking me how they could help and then brought @Vonage_Voice into the online conversation. A virtual Twitterstorm ensued in front of about 35,000 people following me and @Vonage.

The Vonage social media customer service person was helpful and tried to get me offline as quickly as possible to talk with someone on their Executive Response Team. Undoubtably, this was mostly done to make me happy enough to stop telling people online about my bad experience with Vonage. My refund was magically issued about 2 hours later, without anyone reviewing my August 30th phone call.

So why couldn’t the representative or the supervisor I wasted an hour on the phone with offer me the same solution?

I’m sharing this story in hopes that Vonage and other companies will address their ineffective customer service systems so that customers don’t need to resort to calling them out publicly in order to be treated fairly and receive a resolution for their account issues. Having an Executive Response Team is smart. Not giving lower level employees the freedom to fix an inexpensive mistake is short sighted.

In hindsight, how much revenue will Vonage lose on the negative public relations this easily solvable situation generated? Vonage’s competitors and tens of thousands of potential customers can now discover and review customer to corporate communications on the social web that are now indexed and archived online forever in the Library of Congress.

How much money was wasted by having 4 employees use up two hours of company time responding to my case? Definitely more than the $32 a representative could have refunded to me after a 10 minute conversation.

This isn’t a Vonage issue as much as an issue with doing business the old way versus the social business way. We’ve all had similar experiences and wasted dozens of hours with companies that continue to use antiquated customer service systems.

All they have to do to make the systems better is to treat customers like people instead of dollars. Companies should stop forcing customer service representatives to behave like robots, for fear of upsetting their supervisors when the best resolution is to give the customers what they want – even if that means to cancel service.

If Vonage had done that I would have been posting on Twitter, Facebook and blogs about how this is one company that ‘gets it,’ instead of the dissatisfaction you’re reading now.

Hopefully, as more companies realize that we live in a social ecosystem where people have voices that are heard by other customers, their customer service practices will change. Companies who embrace the social web enjoy customer loyalty from people who will promote them and give feedback on how to make their products and services more valuable. This engagement can only boost the companies’ bottom line if they pay attention and make strategic changes based on the feedback they are receiving.

Operating a business with the customer in mind is more beneficial and cost effective on multiple levels. Maintaining hierarchical systems where both employees and customers are marginalized is both disempowering and costly.

We live in a new era of collaboration between companies and the customers whose loyalties they seek. It’s better to build a large following of raving fans than to burn customer bridges over $32.

Please share your own stories of inadequate customer service in the comment section to help corporate America understand what’s broken in their systems so they can understand how to prevent future damage.

This story was originally published in the Huffington Post.

Click here to view the embedded video.

I don’t want to hate my AT&T cell phone service and the iPhone monopoly, but I do.  To be fair, I know people on the East Coast who love AT&T and can’t stand Verizon.  But in Colorado, Verizon service is awesome and AT&T is way below par.  I’m talking about constant dropped calls, conversations that cut in and out and lack of internet access.

Apparently this is true in Austin and other areas too.

Even though I mostly use my phone for data and hardly use the voice option I have to pay a premium price for it.  The lowest voice plan is 450 minutes so I can’t even lower that to 150 which is still more than I use.

But that’s not the biggest issue.  The worst thing is that I work from home and can’t even access the Apple App store much less talk to someone on the phone from that location.

The AT&T customer service representative I spoke with today pulled up my location and said, “Yes, in your area we have low to no service, but if you walk 10 feet away it could be better. I see that there’s a note to add a transmitter near you, but there is no date scheduled for when it will be built” (Awesome!  And I have a note to give you a million dollar check, but I don’t know when it will be written.)

Me – “Actually, I’ve tried using the phone while I walk my dog in the neighborhood and while driving and it’s bad for at least a 2 mile radius.”

AT&T – “Well, your options are to either cancel your service or pay the full monthly amount.”

Me – “Can I get a discounted monthly rate since I’m not able to use your service or my phone most of the time from my location?”

AT&T – “No sir.”

Me – “But AT&T has a monopoly on the iPhone service contract.  If I cancel my AT&T service then I can’t use my iPhone at all.  I’m not able to use Verizon or another carrier that DOES have great service in my area.  The iPhone is what I want, it’s your insufficient service that I don’t want. So what you’re saying is that I have to pay the full price for monthly service even though AT&T can read the fact that I can’t get decent service from you where I live. ”

AT&T – “Yes, we have the iPhone contract until at least late 2010.  Please understand that the iPhone device is very complicated and is very challenging to service.”

Me – “Then why did AT&T sign an exclusive service contract for service that you admit you’re not able to provide? That’s like signing a contract to provide ice cream in the desert when you have refrigerated trucks that can’t keep the temperature cold enough to keep the ice cream from melting.”

….and on it went and I received a lovely $27 discount for one month though I’ve lived with crap service for 13 months so far.

So I’m just another blogger sharing yet another story about incompetent customer service from a corporation that quite frankly doesn’t give a damn and doesn’t take responsibility for not delivering on what you have to pay for.

Conclusion: iPhone – awesome.  AT&T in Colorado – crap to non-existent service in most areas. AT&T wins short term profit and long term horrible word of mouth & faces a mass exodus in late 2010, customers lose, bloggers write about it and it doesn’t change.  Excuse me now while I leave this in the past and move on to focus on issues I have some control over with hopes that I can go back to Verizon in late 2010.

“Thank you for flying _______ airlines. We know you have a choice a choice of which airline to fly and we appreciate you choosing us.” …really? Do we have a choice or do we just choose whichever airline has the best rate for the itinerary we need based on the airports we’re flying in and out of?

Most airlines only seem to be getting worse.  Unfortunately for them it’s happening in a sea of social media where consumers voice their experiences. Andrew Hyde and Frontier have been sparring for months now through his Frontier Fail website.  Brad Feld’s post today was on Taking a Month Off of Air Travel. And then there’s the infamous United Breaks Guitars video that made their stock plummet:

Click here to view the embedded video.

Unfortunately for us there’s not much choice since most of them are tanking when it comes to customer service.  Virgin and Jet Blue may be the exceptions to the rule.

I received an email a few days ago for Frontier Airlines with the headline “We turned Colorado Day into Colorado Week” offering fares listed between $34-$139 each way.  Sounds like a great deal right?

Well, then I read the fine print, and by fine print I mean the real details that for some reason need to be written in 4 point font that you need  a microscope to read.  Both convenient and awesome!  Here’s what it said:

Fares do not include passenger facility fees of up to $9 each-way, the September 11th Security Fee of up to $5 each-way or fees of $3.60 per segment. A segment is defined as one takeoff and one landing. Fares to/from Alaska do not include arrival/departure tax of $8 each way. Seats are limited and certain flights and/or days of travel may be unavailable at these prices, especially during busy travel periods. Tickets are non-refundable and non-transferable, but may be reissued for up to a $150 change fee (depending on the fare type purchased) plus any applicable difference in fare so long as your flight segment(s) is canceled prior to scheduled departure time, otherwise the ticket(s) and all monies will be forfeited. Previously purchased tickets may not be exchanged for these special fare tickets. If you choose to purchase an Economy ticket through our Reservations Center or at a Frontier airport location, there will be a $25 ticketing service fee. Fares and schedules are subject to change without notice and other restrictions may apply. Based on August 2009 schedule some flights are operated by Lynx Aviation. Be sure to read and understand the rules for checked baggage.

*US: Fares shown are each way for off peak travel. Off Peak is Monday-Thursday and Saturday through 1/15/10. Fares are slightly higher other days of the week. Blackout dates of 9/3- 4 and 9/7/2009, 11/24-25, and 11/28-30/2009, 12/18-19, 12/22-24, 12/27-29, and 12/31/2009, and 1/2-3/2010 apply. Purchasing an Economy fare may result in additional baggage fees: a first bag may be checked for a fee of $15 per person and a second bag may be checked for a fee of $25 per person. Service to/from El Paso, TX and Grand Junction, CO ends 9/13/09. Seasonal service to/from Anchorage, AK ends 9/21/09. Seasonal service to/from Jackson Hole, WY ends 9/13/09.

So, if you’re going to Alaska with two bags not on a black out date and purchase tickets at an airline counter you can add $69 to your ticket price.  This includes things like a ‘facility fee’ and a ‘security fee.’  I think Ticketmaster started this 20 years ago with their ‘convenience fee’ of $5-$10 added to every concert ticket.

Airlines – if you’re going to charge these fees, just be upfront and honest about it.  Yes, they’re lame and that’s why  you guys shamefully hide them in 4 point font and doublespeak language.  We get it, we don’t like it and we can’t do anything about it.

As a marketer I learned the magic of using the words ‘starting at’ before a price a long time ago.  Those $34 tickets are probably only from Denver to Colorado Springs.  Almost no one is going to get a $34 one way airline ticket and who expects an airline to make any profit on a ticket that low anyhow.

It turned out that their rate for the flight I wanted to New York was $299 (before all the hidden extra charges) and I found the same flight on Us Air for $213.

We understand that businesses have costs and are fine paying a fair price for a service, but please stop raping us with quasi-hidden fess.  My final request for all airlines is for your next steps to not include charging extra for having to deliver lost bagage or making the oxygen masks deploy only after a credit card is inserted in the seatback scanner.