Your call matters, and other lies; Why is Seven’s share price tanking?

BY Tim Burrowes

November 24, 2023 11:10

Your call matters, and other lies; Why is Seven’s share price tanking?

Welcome to Best of the Week, written on a rainy Saturday morning in beautiful Sisters Beach, Tasmania.

Today: Those pesky humans interrupting the rise of AI; Seven’s disappearing share price and new publishing plans; and the biggest lie in marketing: You call matters to us.

Unmade’s paying members know their subscription comes in handy when it’s time to look at the Unmade archive, with pur paywall kicking in after two months. Do your job better by upgrading today.

Your call does not matter to us

Tim Burrowes writes:

Before I came to Australia in 2006, a journalist friend of mine who’d made the same switch four years earlier kindly wrote me a long email setting out the lie of the land.

I remember two things from it. First she told me to get in the habit of watching the ABC’s Media Watch.

And second, she said that Australian consumers will put up with anything. She used the example of banking.

At the time, most Australian banks had started to pass on a hefty fee for withdrawing cash from ATMs outside their network. Consumers meekly went along with it.

In the UK, the high street bank Barclays had planned to charge anybody using a non Barclays card. There was absolutely uproar, led by newspapers. In the face of the backlash, Barclays backed down, and the UK became somewhere you could take cash out from any ATM.

My friend’s theory was that although Australians like to tell themselves they’re a larrikin nation who’ll stand up to the establishment, it’s not the case. The truth of the matter is that in Australia, brands in all sectors – not just banking – can get away with abysmal service and not suffer for it. Mainly because lack of strong competition means there are rarely better alternatives.

Yes, marketers may increasingly be calling themselves chief customer officers but that doesn’t give them the power internally to provide a great service. The internal calculus remains that the cost would outweigh the business benefit.

On Tuesday night, we ran our Compass event in Melbourne. I asked a question of our five panellists: Does anybody think that consumers actually believe the hold message ‘Your call matters to us’? Five shaking heads.

The customers know that’s as big a lie as blaming it on “unusually high call volumes”. The least unusual thing in the Australian customer experience is unusually high call volumes.

My question to the Compass panel was inspired by having spend the previous day on hold for 50 minutes and then 48 minutes trying to establish why my bank had randomly blocked an online purchase, and followed up by putting a stop on my credit card, all without making any effort to let me know.

It took me a day to even begin to sort it out because I already knew beforehand I’d be meeting unusually high call volumes

My bank has recently added an extra circle of hell to the on-hold torture. Interspersed with the same message informing the customer that their call is important, comes the same song played over and over again. And not even the whole song. Just for the first 30 seconds before looping back to the start. I presume they’ve found a loophole to avoid paying the rights fee. If it was an interrogation technique it would be illegal.

David Bowie’s Starman used to be a favourite, now I can’t bear it.

By contrast, whenever I call my UK high street bank, I’m quickly speaking to a helpful human. So it’s perfectly possible.

But in Australia, the calculus of investment is that investing properly in customer service does not provide sufficient business upside.

I’d exercise consumer choice if there was any. For a time I had bank accounts with all four of the big banks. Last year I needed to do some admin, and had to call them all. They were as bad as each other for on-hold times.

The same goes for any large scale service in Australia. Dealing with Telstra is a similarly horrible ordeal.

And of course, the backlash against Qantas for poor service has done nothing to dampen travel demand.

An associated lie is the one Jetstar tells when it apologetically informs passengers that the delay will be about 15 minutes and please stay near the gate. That was a message I heard a lot over the loud speaker as I attempted to return home from Compass on Wednesday.

Like the words “your call is important to us”, the passengers don’t believe what they’re being told, and the airline knows it, but scripts it anyway. It’s slightly more polite than the alternative: “What else are you going to do? Walk?”

Chief customer officers are powerless when they come across the profit imperative. Bad service is good business when it’s cheaper. Might as well stick to the marketing.

The human factor

Considering he was fired on Friday night and reappointed by the end of Tuesday, the drama around Sam Altman’s long weekend created an unprecedented number of “emergency edition” tech podcasts. It would take longer to listen to them all than the number of hours Altman was out of OpenAI.

What’s wonderfully ironic about the whole debacle, was that it was all so messily human.

Having had a mysterious falling out with Altman, the OpenAI board misjudged every human factor involved including the reaction of the company’s staff to the poorly explained firing of their founder, and Altman’s move to join their biggest shareholder Microsoft instead.

No matter how big a business gets – and OpenAI was worth US$80bn before all this unfolded – they’re still exposed to human frailties.

We need to talk about Seven

Something quite odd has been going on with Seven West Media’s share price in recent days, and momnths.

Since February, it’s halved. On Thursday, it fell to its lowest level since November 2020, with the company’s market capitalisation dropping to $350m. Think about that – the country’s number one rated TV network is worth about the same as one year of its AFL rights deal.

Seven’s performance has been worse than any other large media stock on the ASX.

Half way through last week, market sentiment really seemed to against Seven, with its price falling by 1.8% on Nov 14 and 3.7% on Nov 15. This week came falls of 1.9%, 3.9%, 4% and 2%. Then yesterday morning, a sudden jump of 8.7%, with the highest volume of positive trading in the stock since last year.

One of the odd things about all this movement is that market conditions have not changed significantly since the company’s downbeat full year update back in August.

How we covered Seven’s August update:

What’s also unusual about Seven’s recent share price moves is that they haven’t been following the same patterns as the wider market.

Meanwhile, the AFR yesterday revealed more about Seven West Media’s new digital publishing venture. The company has applied for the trademark “The Nightly”.

According to the AFR, Chris Dore, former editor-in-chief of The Australian – who left under something of a cloud – will be a columnist on the new evening publication, which is being masterminded out of The West Australian’s newsroom. Dore will be, according to the AFR’s source, “a Joe Aston-like figure”. Easier said than done, I suspect.

Still, the publishing rhythm of evenings (presumably eastern time) is an interesting one in that it follows that of new arrival Capital Brief.

Campaign of the Week: Climate Change Is Changing Childhood

In each edition of BOTW, our friends at Little Black Book Online highlight their most interesting advertising campaign of the week.

LBB’s ANZ reporter Casey Martin writes:

Howatson + Company have created a spot for UNICEF aimed at bringing attention to the effects of climate change when no action is taken to better the situation.

They have used home videos and images from past generations and compared them to the childhood memories of the current generation that is growing and learning in a world that is falling apart. The spot pulls on the heartstrings of Australian audiences and serves as a reminder that action needs to be taken and children need to be listened to, especially when it concerns their future.

In case you missed it…

On Tuesday, we took a look at the most talked about Christmas ad of the season:

On Wednesday, we analysed the new era of Australian radio:

On Thursday, we interviewed Nick Rynne, manager of Seven’s new community sports platform Streamer:

On Friday, we explained the crucial battles the TV and radio industry are locked in for when the transmitters turn off:

Index on the up

Seja Al Zaidi writes:

The Unmade Index perked up yesterday, with a 0.61% lift bringing it up to 596.3 points.

Seven West Media saw the biggest growth rising 8.70% in share price, while Enero Group followed with a 5.30% lift. Southern Cross Austereo rose 0.98%, Domain 0.57% and Nine 0.52%.

Ooh Media dropped 1.81%, while ARN Media fell 1.63% and IVE Group 1.46%.