Frost & Sullivan Analyst Details Questionable Verizon Sales Tactics

Verizon Communications Inc. (NYSE: VZ) has been criticized for attempting to upgrade a customer’s broadband connection through questionable sales tactics.

The customer was Dan Rayburn, Principal Analyst at Frost & Sullivan and EVP at StreamingMedia.com.

According to Rayburn, three different sales representatives attempted to convince him that his Netflix, Inc. (NASDAQ: NFLX) video would be “smoother” and have “better quality” if he upgraded from Verizon’s 50Mbps broadband service to its 75Mbps service.

Source: Dan Rayburn, streamingmedia.com

The problem, according to Rayburn, it that upgrading to a faster broadband package would have no impact on the quality or smoothness of the Netflix service.

“For the average consumer who doesn’t know any better, or isn’t technical, they could be paying for something they don’t need and can’t use,” Rayburn said.

The attempt to upsell Rayburn did not appear to be isolated, either. Not only did three sales representatives make the same claim, Rayburn said that Verizon tried to make the same sales pitch two years ago, “promising better quality Netflix streaming,” if he upgraded his service.

Daniel Kline at The Motley Fool also pointed out that it would be better in the long-run for Verizon to make changes to its sales tactics.

“If a consumer learns that he or she was paying for unnecessary service -- and the broadband provider had convinced that customer that he or she needed it -- that customer is likely to jump ship at the first opportunity,” Kline wrote.

Rayburn reiterated the problem with such tactics and claimed that the “average customer gets no improved service in return and false expectations are being set, which is bad for the streaming media industry and over-the-top content providers, not to mention consumers.”

“This tactic by Verizon needs to stop and stop now,” Rayburn concluded, and Verizon needed “re-educate their sales force and do away with this sales tactic immediately.”

Verizon Communications recently traded at $50.58, up 0.35 percent.

Netflix recently traded at $556.13, down 0.16 percent.