An old saw in retailing has it that while a happy customer will tell three people about his experience, an unhappy one will convey that displeasure to 20.
As of early May, Ken and Latrice Innes, in Redding, Calif., had told some 318,082 visitors to their Web site, PacesetterSucks.com, about their less-than-satisfactory experience with the Omaha-based Pacesetter Corp.
The Inneses' story begins with a telemarketing call to their home in November 2001. The couple, in their 20s at the time, agreed to meet with a Pacesetter salesperson. After being stood up once by the rep, a January appointment was set. The resulting contract specified that Pacesetter would install new windows, a storm door, a rear sliding door, a garage door, and a garage door opener and would finance it all through its financial arm, Federal Diversified Services, at 10.9%. According to Ken Innes, a soft-spoken computer programmer and Web designer, what sold him on Pacesetter was the company's guarantee that the work would be completed within 20 days of signing the contract.
Unfortunately, it wasn't. Installer Rick Oaks put in everything but the garage door and opener, which he says he wasn't trained to install and had no means of hauling to Redding from the company's Sacramento, Calif., warehouse. From that point forward, what might have been a poorly managed service situation mushroomed into an increasingly brittle exchange of phone calls and e-mail messages.
The Inneses pointed out to Pacesetter several months after signing the contract that not only had their garage door and opener still not been installed, but the original window installation was unconscionably messy. Other complaints included a broken coat rack, blinds removed and not replaced, and “a giant Pacesetter advertisement stuck in our front lawn” without permission. They argued — insisted — that that gave them the right to cancel that portion of the contract covering the still-uninstalled garage door and opener. Pacesetter at first attempted to convince them otherwise. But then it deferred, and West Coast vice president Gary Kluck sent the Inneses a letter offering to deduct $3,800 from the original contract price. This was accepted, but the homeowners and company went back and forth on other issues, including whether or not a new contract was needed. The offer of dinner out, compliments of Pacesetter, came too late to calm the seething Inneses.
“They called and wanted to talk with me, but they wouldn't say what it was about,” recalls Ken Innes. “I told them if they wanted to negotiate they could do it through e-mail or written mail. I wanted to have a record, because they'd lied to me before.” By this time — spring 2002 — the couple had also contacted the Better Business Bureau and the California State Attorney General's Consumer Fraud Division. Things remained at a standoff until the following year, when Ken Innes launched PacesetterSucks.com. Soon it was the first item to appear on any Google search for “Pacesetter.”
Revenge Sites At the time the Inneses launched the Web site PacesetterSucks.com, so-called “revenge sites” had frequently begun popping up on the Internet. Spawned by the fallout from dot-com crashes, such sites were typically launched by angry ex-employees looking to settle scores with former managers or employers. Ken Innes says that he simply wanted to make Pacesetter management aware of his complaints and warn other homeowners about the stress involved in dealing with the company.
Pacesetter management found out soon enough. On April 25, 2003, company legal counsel James B. Miller sent a cease-and-desist letter to the couple. The threat failed to deter. PacesetterSucks.com, meanwhile, began to grow. Eventually the site included six “visitor feedback books” chock-full of e-mail, plus links. “It had a significant impact on our business,” says Tim Bannon, the company's chief information officer in 2004–2005. That impact took the form of cancelled appointments and contracts. PacesetterSucks.com remains up to this day.
An Omaha Institution In 2002, Pacesetter had been in business for 40 years. That made it ancient in an industry where businesses often come and go in a decade. The company could boast of solid systems for manufacturing, marketing, selling, and installing home improvement products, a highly profitable finance arm, a loyal cadre of approximately 1,500 employees, and a prominent position in the local business community. In Omaha, owners Phil and Harley Schrager were known and respected for civic contributions such as the Pacesetter Academy, a nonprofit that provided academic support for at-risk youth. The University of Nebraska had awarded Phil Schrager an honorary Doctor of Letters degree in 1992, and Pacesetter itself was presented with a Better Business Bureau Torch Award in 1999.
But 2002 was an unsettling time at Pacesetter. Inside the company a growing awareness existed that although both communication technology and the consumer were changing, Pacesetter was not.