Consumers with QuestionsSony and Apple have been hit with customer dissatisfaction in the past week: Apple for it location based data being stored on iPhones and iPads and Sony for its Playstation Network Data Breach. In each case, while the company responded to user concerns, they did so late, later than customers expected.

Apple iPhone Location Based Data Problem

In an Associated Press article, Apple was blamed for its slow response to the discovery that it was tracking location data on user’s iPhone4s and iPads without consumer approval or knowledge.

Customer were unhappy about:

1. Consumers did not know that there was data being tracked on their iPhone.  It was found by some researchers by accident and reported in the press.

2. There appeared to be no disclosure of this tracking information. On investigation, it was found that Apple’s  privacy policy does cover this though most consumers don’t read privacy policies. There are too many and they are very wordy.

3. The customer cannot not opt out of location tracking. (It turns out Apple claims it is a bug in their software they intend to fix)

4. It was unknown who was gaining access to that data (Apple? Application Developers? Other companies that aggregate data about people) or what they might be doing with it. It turns out that Apple’s  privacy policy covers that issue.

“… Apple and our partners and licensees may collect, use, and share precise location data, including the real-time geographic location of your Apple computer or device. This location data is collected anonymously in a form that does not personally identify you and is used by Apple and our partners and licensees to provide and improve location-based products and services. For example, we may share geographic location with application providers when you opt in to their location services.”

While the privacy policy does give Apple the right to collect this data, consumers have many concerns about how this is implemented and what information they truly have. An excellent article on the issues associated with location based tracking can be found on the I’ve Been Mugged Blog here.

5. When this information was made public, it took Apple a week to come out with a statement clarifying the data captured, where it is stored, who has access to it and how it is used. They claimed that they had to investigate the situation first.

A US Senator wrote to Apple complaining about the lack of information and warning that children under 18 are using these phones and that the tracking information could endanger them.

6. While Apple did release its statement, it only addressed the iPhone, and not Apple’s iPad.

Sony Playstation Network Security Breach

Sony’s Playstation Network was hacked between April 17 to 19th and 77 million users names, addresses (city, state, zip), country, email addresses, birthdates, PlayStation Network/Qriocity passwords and login, and handle/PSN (PlayStation Network) online IDs were stolen and some other potential sensitive personal data could have also been stolen, including credit card information. Sony shut down it’s PlayStation Network and Qriocity online service on April 20th and took about a week (April 25th, 2011 in the US, later outside the US) until released its statement about the problem and to warn consumers about the security breach.

According to a Blooomberg article, Sony is now being sued by a consumer.

Consumers are also complaining that they have been experiencing increased credit card fraud recently and rightly or wrongly are blaming the recent Sony breach.

Lessons Learned

Organizations in crisis need to be very responsive when problems surface.

In both Apple’s case and Sony’s case, there is a perception that they took too long to respond to customers. In both cases the companies indicated that they needed to do research to understand the problem and implications before issuing a statement.

It is perhaps better public relations and customer satisfaction practice to let customers know that the company is aware of the problem and working on understanding it and providing a response than saying nothing for a week.

Silence is counter productive. During the silence period, one has to wonder what the company is hiding and why they are not responding. This kind of action can scare off prospects and erode customer satisfaction and loyalty.

What is your opinion? Leave your comments below.

 

 

 

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Adele Berenstein

Adele Berenstein is an Experienced Customer Satisfaction Executive, recently retired from a Large Global IT Organization after a long productive management career including Sales, Marketing, Services, teaching and education center management and most recently, 19 years in customer satisfaction management. She turned around divisions with customer satisfaction problems, implemented measurable improvements and management systems, and implemented programs to prevent problems from ever affecting customers.

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