Quick: Name a US passenger railroad that successfully transitioned to or purchased an airline in order to continue in the passenger transportation business.
Can’t think of one?
That's because there weren’t any.*
Passenger railroads during the 1950’s and 60’s, at least in the United States, were avid followers of the “Ostrich Strategy,” based on the widely accepted myth that ostriches hide their heads in the sand to avoid predators.
These days, the Ostrich Strategy is on full display in the way that some companies deal with negative comments or sentiment on social media. Case in point: Stamps.com.
A month ago I posted a story right here on LinkedIn about a colleague of mine who had had a terrible experience trying to unsubscribe from Stamps.com. He’d NEVER used the service, but had a hard time quitting, much less getting any kind of a refund.
Over the last 30 days my "Trustability Hall of Shame" post accumulated more than 100 comments, the vast majority quite negative about the company, including more than 30 customers reporting that they had experienced the same exact kind of shoddy treatment when they tried to quit Stamps.com’s service. Apparently, this company's primary customer loyalty strategy consists of making it very difficult for customers to quit.
What is remarkable to me, however, is that throughout this entire period, while thousands of LinkedIn members viewed this content, we have yet to hear a peep from the managers or executives at Stamps.com.
Until just a few days ago, anyway. On May 30 I heard from an ex-manager at the company,Bry Willis. Bry contacted me to say he had resigned from his position as “program manager” at Stamps.com in 2006, largely because he just couldn’t stomach the abusive way the company was exploiting its customers, essentially tricking them out of all the money they could! Here’s what he said in his email to me:
During my tenure, I had numerous conversations and sat in on many strategy sessions, and their customer policy is not an accident. We created IVR roadblocks to route cancellation calls to long queue with the intent to secure at least an additional month of service—and even then were routed to a retention queue. We even refrained from sending collections notices or raising any red flags so as not to remind someone they may have a dormant account. At one point, we secured a service to allow us to capture payments from expired credit cards by bypassing the expiry. This kept revenue flowing. A customer-centric approach was never valued.
I never felt that this was very ethical, but this was the MO. When I left in 2006, in order to receive a severance package, I had to sign an accord not to "speak badly" of the company or any of its officers for a period of 2 years lest they claw it back.
A couple of the comments on my "Hall of Shame" post point out that Stamps.com is a public company, and has maintained (so far) a decent financial track record. And it's obvious from this former manager's email that the company is eager to squeeze every last nickel out of even the most unwilling of customers. But hey, drug cartels and other organized criminal activities are also profitable, but this doesn't excuse their actions.
Nevertheless, as of today, no one who currently works for Stamps.com has dared to comment on, correct, apologize for, defend, or otherwise make any reference whatsoever to the company's controversial practices. We haven’t heard from a soul at the company!
According to LinkedIn, 177 employees of Stamps.com are members. And personally, I even have a first-degree connection with their chief legal counsel, Seth Weisberg, who I connected with just five days after my first posting about the company, anticipating some type of reaction.
We can only conclude that the executives at Stamps.com are either the most clueless managers in business today, or they are purposely following the Ostrich Strategy. My money would be on the latter.
*Outside the US, Canadian Pacific Railroad did buy a small “bush” airline, which became CP Air and operated for more than 20 years before being merged into Air Canada.