DreamHost overbilled their customers to the tune of $7.5 million today. Then, they joked about it.
Today, in what is surely the most readable and contentious blog posting so far in 2009 — er, I mean 2008 — DreamHost took a lighthearted approach to an undeniably serious customer service snafu.
And the blogosphere is going crazy over it.
When running a billing script to clear out their charges for the remainder of 2007 (a script which determines when and how customers of the Internet hosting company get charged) they accidentally entered a date of December 31, 2008. This resulted in nearly every account they service being charged for the rest of 2008.
Wow.
That’s a mistake of colossal, perhaps company-ending proportions. It’s every PR person’s worst nightmare and every vice president of customer relations’ death knell: the complete and utter screw up that can’t possibly be explained away.
Time to call in the PR army.
Only, DreamHost doesn’t have an army of PR flaks. They’re a small company with a lot of goodwill in their community, a decent track record, and a whole lot of lighthearted attitude. So, they relied on their strength: the funny.
With their usual tongue-in-cheek attitude, they posted an amusing blog post (“Um, Whoopsâ€) that explained the situation, what they are doing to fix the problem, and what they have learned from the experience.
Not everyone found it laugh-out-loud funny. I did, but I’m not a DreamHost customer. I have nothing to lose from this mistake. The responses to the blog posting are riveting, hilarious, and deadly frightening from a customer service point-of-view.
If you’re in any way involved in customer service, you should spend at least ten minutes reading DreamHost’s blog post and the responses that follow.
At the time of this writing, according to an informal poll set up by one of the blog’s commenters, the answer to the question, “Will you stay with DreamHost after their billing screw-up,†is 53% yes, 31% no, and 17% undecided.
Ouch.
Did DreamHost do the right thing by being dead-set on openness and transparency? Did they simply shore up their base of dedicated customers who like to laugh, at the expense of more serious-minded customers? What about that swing vote?
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Dreamhost’s problem isn’t their PR technique, but rather their almost complete lack of customer service. They do respond to emails, but they don’t track the problem so the customer service reps never know the history of what has happened. And Dreamhost’s brand of funny means insulting the customer even when it’s Dreamhost causing the problem.
DreamHost’s poor customer service has led to a serious privacy invasion. When my client attempted to sign up for an account, the transaction hung halfway through. When customer service (which can only be reached by tedious email exchanges) “fixed” the problem, the pay by credit card option was no longer available. The customer service representative insisted that we use Google Payments. I proceeded, and then my client realized his financial information is now in the Google system. The worst possible scenario then came true. Instead of completing the transaction, Google called my client’s bank for “preapproval”. This was not to complete the transaction (which was never completed), but to gather information for Google’s marketing. My client is furious, reviewing everyone’s privacy policy, and is looking into ways to bring this problem up at the political, and possibly the legal, level.
Throughout this whole situation, Dreamhost has been nothing but pig-headed. Every customer service representative ignores the case history and either refers us back to Google Payments or says patronizing things like we could have paid with the original credit card system. I offered them a solution where I quietly pay for the account using Google transactions, and they won’t even let me help bail them out!!!
I will never refer another client to dreamhost. Right now I’m looking for the best place to air this complaint publicly in as many places as possible. People have to know that when Dreamhost pushes people into using Google Payments, Google then has their financial information to aggregate and deploy for their own purposes.
Addendum: Dreamhost customer service reps also flame customers who complain on their forums. I know because one accidentally used his forum ID while responding to an email with the customer service issue header on it.