Internode managing director Simon Hackett has published a lengthy apology to the ISP’s customers for a pricing plan migration “stuffup” that had seen the company inadvertently alienate some of its oldest and most loyal customers.

In mid-July, Internode had revamped its monthly plan structure, with the aim of unifying its disparate product offerings under one simplified structure. At the time, the new plans caused a stir amongst some customers, because it turned out that some were better off on their existing deal. Internode however, claimed the high wholesale prices placed on the company by the likes of Telstra meant pricing had to be adjusted in order to allow the company to remain “financially sustainable.”

Compounding the problem, Internode subsequently confirmed a number of existing out-of-contract customers would have to be moved onto its newer plans because of the so-called wholesale “price squeeze”.

But in a post on Whirlpool published yesterday, Hackett acknowledged that some customers had been notified about these compulsory plan migrations, but revealed his company had inadvertently targeted the wrong customers.

Internode had intended to implement the forced plan migrations in a way that was “incremental”, he said, not in a “big bang” way. In addition, the ISP had intended to exclude customers who had been buying services from it for a long time (for example, longer than five years) from the migration process initially, in order to reward their loyalty.

However, Internode’s actual implementation of the plan went awry. The net effect of what Hackett described as a “stuffup” was that its algorithm for selecting customers “selected that first batch of un-lucky people in the perfectly worst possible way – starting with our oldest applicable out-of-contract customer and working along from there “.

“So we didn’t just fail to be random about it – we’ve hit on exactly our longest term customers first,” added Hackett. “Oops. That explains why the people here on Whirlpool who have been with us the longest all seemed to be disproportionately singled out. That’s because they were. Not intentionally, but that’s what happened.”

“It is a stuffup and its my fault,” said Hackett. “I’m really sorry about it.”

As an immediate first step, Internode is planning to withdraw all of the price change notices which it issued last week, and will be changing its processes so that it rewards its oldest customers in future by leaving them until last in future changes. In addition the customers who received Internode’s first batch of notifications last week will “never” see a price rise as part of the current changes, and may receive a further offer as a goodwill exercise.

Hackett also reiterated that Internode would never have targeted its oldest customers intentionally. “It’s certainly not been intentional – nobody would intentionally target their longest term customers to get it in the neck first,” he wrote. “Gah.”

In general, customers reacted very positively to Hackett’s disclosure, although some had already confirmed plans to migrate to another ISP. “This is what I love about Internode – honesty. Thanks for the post Simon. Sure, not everyone’s going to be happy but at least you’ve done your bit to explain why,” wrote one.

Image credit: Internode

Related posts:

1. Internode unveils NBN pricing
2. Terabyte war: Internode in plan changes
3. Internode forces some customers onto new plans
4. Internode snips broadband plan range
5. Internode hints at NBN pricing change

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1. CC
   Posted 05/08/2011 at 11:06 am | Permalink | Reply

   Technically, it wasn’t a pricing plan stuffup, it was a migration plan stuffup.

   And Internode did target all the right customers, just in the wrong order.

2. Jack Webster
   Posted 05/08/2011 at 11:29 am | Permalink | Reply

   This is what needs to be the case across all of our ISPs. I’ve been in direct contact with Simon before, and he is truly a great guy within a profit-focused industry.

   I know I’ll always pay a bit more with Internode, but it’s a damn sight worth it.

   • John
     Posted 05/08/2011 at 6:57 pm | Permalink | Reply

     “I know I’ll always pay a bit more with Internode, but it’s a damn sight worth it.”

     Cliche FAIL

     • Pete
       Posted 05/08/2011 at 9:21 pm | Permalink | Reply

       It may be a cliché but nonetheless true.

       Internode have been fantastic to us recently. We have to move home for three months while the wreckage of ours is rebuilt (Cyclone Yasi) so we have to also move our connection. As it’s not a long enough period to qualify for a “free transfer” we’d have had to pay a $99 fee twice. Not only that, we’d have not been able to keep our 200 gig plan.

       I asked Internode if there was any possibility of some help here as it’s a time of great expense for us. I got an email from Simon, who was on holiday at the time, saying that they’d waive the transfer fees and let us keep the 200 gig plan.

       Can anyone name another ISP that gives that level of service from the very top?

       Simon and all the team at Internode are the best.

       • John
         Posted 05/08/2011 at 10:56 pm | Permalink | Reply

         Don’t disagree one bit Pete,

         I’m a loyal node customer myself & have been since 2003…..

         I guess I’m the only one who hates it when people can’t even get a cliche right so I’ll just make like a tree……. and get out of here.

         lolz

3. Jon
   Posted 05/08/2011 at 11:38 am | Permalink | Reply

   Mistakes happen, it’s inevitable, but it’s the manner in which a company handles those mistakes that really matters. Simon has indeed done Internode proud in this respect.

   The transparency offered by Internode around this issue, and every other development within the company, is very much appreciated. He acknowledged the error and took it on the chin like a man. I respect that.

   Internodes continuing efforts to be as transparent as possible are one of the reasons I’m a loyal customer myself.

   • Renai LeMay
     Posted 05/08/2011 at 12:13 pm | Permalink | Reply

     +1

     This is one of the reasons I’m with iiNet. But as it’s been getting a bit iiCorporate recently, I may eventually make the switch to the Node. That way also, when I hassle Simon about stuff, I can add: PS, I’m a customer!!!

4. CMOTDibbler
   Posted 05/08/2011 at 11:43 am | Permalink | Reply

   Were the plan/price changes only for resold Telstra ADSL/ADSL2+ services?

   If the changes also apply to ADSL2+ services delivered on non-Telstra DSLAMs and backhaul, how is Telstra to blame?

   It always seems to be someone else’s fault.

   • BIll
     Posted 05/08/2011 at 12:53 pm | Permalink | Reply

     Internode always blames someone telstra, even optus gets blamed by internode for doing something

     And even the nbn is getting the blamed by internode

     Reason why i left internode because its wont accept the blame when its has some bearing in the fault, it always blame others

     • Eric
       Posted 05/08/2011 at 1:06 pm | Permalink | Reply

       “Internode always blames someone”

       Hey Bill… I’ll quote from the story on this page:

       “It is a stuffup and its my fault,” said Hackett. “I’m really sorry about it.”

       • BIll
         Posted 05/08/2011 at 1:58 pm | Permalink | Reply

         But that doesnt happen too often though eric,

         internode majority of times , blame others

         • Eric
           Posted 05/08/2011 at 2:07 pm | Permalink | Reply

           There is a difference between “explain” and “blame”.

       • CMOTDibbler
         Posted 05/08/2011 at 2:16 pm | Permalink | Reply

         I’ll quote from the article too …

         “Internode however, claimed the high wholesale prices placed on the company by the likes of Telstra meant pricing had to be adjusted in order to allow the company to remain “financially sustainable.””

         Internode might have accepted responsibility for the stuff up with the notifications. It’s still blaming Telstra for the plan/price changes though.

         • Eric
           Posted 05/08/2011 at 5:53 pm | Permalink | Reply

           There is a difference between “explain” and “blame”.

           • CMOTDibbler
             Posted 06/08/2011 at 11:29 am | Permalink | Reply

             Yep, and the sentence I quoted clearly pins the blame for the plan/price changes on Telstra. Why mention them otherwise?

             • Eric
               Posted 06/08/2011 at 1:58 pm | Permalink | Reply

               There is a difference between “blame” and “explain”.

5. Hamish
   Posted 05/08/2011 at 11:47 am | Permalink | Reply

   At least he has the guts to see his error and issues and apology ok TPG where is your apology for having a next to useless network ?

   Silence is deafening.

6. John Fitzgibbons
   Posted 05/08/2011 at 12:06 pm | Permalink | Reply

   The Internode defenders will be out in force on this one, but these people that were “targeted” were always going to receive this message. They just should have been last to receive it. Internode is now in backtrack mode because these longer term loyal customers whinge the loudest (especially on whirlpool) and it is causing them problems.

   In saying that, at least they admitted their mistake and apologized. More that you can say about most big companies. The mistake even means that they won’t be migrated now – so in the end they win.

7. Dave
   Posted 05/08/2011 at 1:03 pm | Permalink | Reply

   Blah, blah, blah…more Node headlines and for all the wrong reasons. Anyone else sick of Simon’s long-winded, self-important rants every single time the company breaks wind? Boring.

   • Hamish
     Posted 05/08/2011 at 1:30 pm | Permalink | Reply

     You only have yourself to blame by clicking the link and reading it.

8. James Dave
   Posted 05/08/2011 at 2:20 pm | Permalink | Reply

   Doesn’t anyone have actual lives than to worry about this ?.

9. Harquebus
   Posted 05/08/2011 at 4:13 pm | Permalink | Reply

   The way things are going, there is going to be plenty of spare bandwidth. Discretionary spending is almost deplete.

10. Justme!
    Posted 05/08/2011 at 4:23 pm | Permalink | Reply

    Internode has bad management these days.

    True be told, they scared so many are leaving because of price gouging they are now doing a backflip. Nothing new with Internode. Prices change more than anyone, never know what’s what with them.

    Find a another ISP!

    • Hamish
      Posted 06/08/2011 at 10:53 am | Permalink | Reply

      How is it bad management when they make a mistake and then apologizes for it?.
      At least they acknowledge what they have done wrong and have done something about it.
      You must of made mistakes in your life you don’t go and kill yourself to find a new life to fix it.
      Bad management I see is ISP’s offering cheap deals but not allocating enough bandwitdh to its customers, or constant billing errors and having pretty useless tech support when you need them.

      I am with TPG and I can’t wait to leave them at least Internode seems to have the guts to know its faults and adresses them.

      Please find me another ISP that has a CEO that can admit their faults I bet you can find only a couple.

      Other ISP”s like TPG is like Mitsubishi hide recalls and defects and tries to cover it up under the carpet.

11. SQL
    Posted 05/08/2011 at 4:25 pm | Permalink | Reply

    SELECT * FROM ‘customers’
    WHERE ‘plan’ = ‘fail’
    ORDER BY ‘date_joined’

    WTB a “DESC” on the end of that statement eh Simon?!

12. Goddy
    Posted 05/08/2011 at 5:50 pm | Permalink | Reply

    And this is why Internode is the best damn ISP in Australia.

    Name me another ISP whose CEO visits a community forum to answer to his customers. Yeah, keep thinking.

    • alain
      Posted 05/08/2011 at 6:17 pm | Permalink | Reply

      Where do you think the majority of Internode customers come from, have a look at the Whirlpool survey results year after year at the number of Internode customers answering the survey, beats any other ISP by a substantial margin and is totally disproportionate to the actual number of customers in Australia with the biggest ISP’s.

      Also look at the high percentage of Internode customers who answered the question in the affirmative that Whirpool influenced their choice of ISP.

      You might as well call it the Internode survey and others.

      Other than that I cannot think of any reason why the CEO and Internode Rep’s have a high profile in Whirlpool.

      • toshP300
        Posted 05/08/2011 at 7:21 pm | Permalink | Reply

        the funny thing is most people outside of the techworld have never heard of “Internode”.

13. David Robinson
    Posted 05/08/2011 at 7:20 pm | Permalink | Reply

    It’s Internode this,Internode that.All the “Internodians”strike me as being a wee bit precious.

14. Edward Borland
    Posted 06/08/2011 at 11:00 am | Permalink | Reply

    I’m looking at Internode because of this sort of integrity. Good product, service and people.

15. Hamish
    Posted 06/08/2011 at 12:33 pm | Permalink | Reply

    Who remembers XIS internet? they failed before they even started really now that what you call bad management.

16. Dessy
    Posted 06/08/2011 at 3:54 pm | Permalink | Reply

    Internode stuffed up twice this time:

    a) by raising prices even further beyond what is reasonable when compared to other ISPs
    b) failing to even do that reasonably

    do yourself a favour internode fanbois and let Internode whither and die. Instead support ISPs whose ceos don’t spend all their money on jetplanes and sports cars.

    • Sniper
      Posted 09/08/2011 at 1:35 am | Permalink | Reply

      jet planes HAHAHA since when has a glider been a just plane, and as for the sports car/s well jealousy is a curse.
      Customer service starts at the top with Internode, and if people dont like that, well thats just tough they can use DODO or TELSTRA.

17. Long term customer
    Posted 07/08/2011 at 1:15 pm | Permalink | Reply

    Will check my email but pretty sure i’m not affected.

    Any stuff up is my doing.

    I got the /29 subnet i 48 hours i think it was.

    Not even game to play with IPv6 atm IPv4 is proving enough fun atm.

    Sympathies to the people who got gotten by this glitch it’s similar to the change to our ports saga
    in the DSLAMs but i can’t whinge about that because there is enough warning about it.

    Two or more stuff ups compared to endless by the rivals yeh roight next you’ll say that connect never have any outages barely ever even.

    Or billing going cuckoo to the point of creating fictitious amounts.

    Not a fan boy but node is local how much of your money stays in Australia with other providers?

    Granted they employ local people but like certain companies are claiming “no one is applying”
    which is a whole different story.

    It’s more are the candidates worthy if not they’re not counted as an applicant.

    Same applies for informal application for employment.

    So a lot of fibs get told at the best of times via the media i equate it to better the devil you know than the one you don’t.

    Please note Internodes business model is unique it is like no other.

    Do not compare it to the big corporates even though it’s in the same ballpark and and they all play the same games.

    Thing is Internode is the entitity not the board not the stakeholders (so much).

    The only similarity is emnploying staff.

    Apart from that it’s money going back into Internode and we can see that.

    If Simon wants a fighter jet stuff it he’s earnt it cut the guy some slack you try do better.

    Fair dinkum jealousy can be a green eyed monster on these things.

    Apart from that this guys has morals he’s not out to strip the company of it’s assets or merge with another idiot company.

    Every decission is scrutinised and so what if a mistake is made we are human computers are made by
    humans sorry but the saga continues.

    Theres things i don’t like also about Internode but they treat me decent so i prefer that than
    some twit in a fly by night call centre or dingey datacentre stuff up my billing.

    I’ve been very nearly every ISP keeping things here in Oz WA next choice personal service.

    Othwerwise much of a muchness with the corporates it’s a case of who are they reselling?

    And in bigpuddles case it’s why can’t your network work as good as wholesale customers gear?

    • BIll
      Posted 08/08/2011 at 3:45 pm | Permalink | Reply

      alot of contradictions in that post, if internode wanted to keep it long term customers it wouldn’t have made this mistake, funny how internode is apologizing publicly when it is going to lose customers and now its back pedaling.

      and people are praising internode for this mistake its joke , if this was another isp/telco who isnt a god like isp on whirlpool people would be ripping the ceo, or md apart

      • Sniper
        Posted 09/08/2011 at 1:41 am | Permalink | Reply

        So you have NEVER made a mistake ever.
        Internode’s MD realised that a mistake had been made, apologised and took steps to mitigate it and reverse it.
        How many other ISP’s and/or companies would do that. VERY VERY FEW IF ANY.

18. Adam
    Posted 08/08/2011 at 12:19 am | Permalink | Reply

    Stop dumbing the plans down!
    Bring back choice!