iYogi Refers to Incident as ‘Tylenol Moment’
Avast, an antivirus maker that claims more than 150 million customers, is suspending its relationship with iYogi, a company that it has relied upon for the past two years to provide live customer support for its products. The move comes just one day after an investigation into iYogi by KrebsOnSecurity.com indicating that the company was using the relationship to push expensive and unnecessary support contracts onto Avast users.
In a blog post published today, Avast said it came to the decision after reports on this blog that “iYogi’s representatives appear to have attempted to increase sales of iYogi’s premium support packages by representing that user computers had issues that they did not have.”
“Avast is a very non-traditional company in that positive referrals and recommendations from our user base drive our product usage,” Avast CEO Vince Steckler wrote. “We do not distribute our products in retail, via computer manufacturers, or other similar channels. This model has served us well and has made us the most popular antivirus product in the world. Last year we added over 30M new users on top of almost 30M new users in the previous year. As such, any behavior that erodes the confidence our users have with Avast is unacceptable. In particular, we find the behavior that Mr. Krebs describes as unacceptable.”
Steckler said Avast had initial reports of the unnecessary upselling a few weeks ago and met with iYogi’s senior executives to ensure the behavior was being corrected.
“Thus, we were shocked to find out about Mr. Krebs’ experience. As a consequence, we have removed the iYogi support service from our website and shortly it will be removed from our products,” Steckler said. “We believe that this type of service, when performed in a correct manner, provides immense value to users. As such, over the next weeks, we will work with iYogi to determine whether the service can be re-launched.”
Steckler added that Avast will also work to ensure that any users who feel they have been misled into purchasing a premium support receive a full refund. The company asked that users send any complaints or concerns to support@avast.com or even to the CEO himself, at vince.steckler@avast.com.
iYogi executives posted several comments to this blog yesterday and today in response to my reporting. After Avast announced its decision to drop iYogi, Larry Gordon, iYogi’s president of global channel sales, sent me a formal letter that was unapologetic, but which promised that the company would endeavor to do better. Gordon called the incident, a “Tylenol moment for iYogi and the leadership team.” His letter is reprinted in its entirety below.
Hi Brian:
I have enjoyed reading your blog, except for the last post; for obvious reasons. But even all the latest comments provide iYogi with opportunity.
I’m the president of global channel sales for iYogi, and I am writing to communicate our model for providing freemium services. As you probably know, remote tech support is still a new service category and creating a market and meeting consumer demand for subscription-based services required an innovative marketing approach. So we invented a “Serve to Sell” model for ourselves. Similar to antivirus products, and now mobile games, we want as many people to try our service as possible, and then we use that service-experience to upsell our subscription-based all-you-can-eat tech support, which many think is a pretty good deal at $169/year. We call it “try it before you buy it.” It works well. The trick, of course, is not to turn anyone off in the sales process.
For this reason, we have focused on creating a terrific service experience; we audit 30% of our agent engagements through KPMG and have CSAT rates that our amongst the highest in the world for any type of CE service or product, not just tech support. But this is the new world of total transparency. Any type of flaw or snafu can be broadcast and amplified. It’s thumbs up or thumbs down. That is why we need to be perfect. And need to get better.
In the last five years we have grown rapidly and now have close to two million subscribers, across four geographies and deploy over 5,000 tech experts. At this scale of operations, it is likely that given all the variables of a services business, a customer could experience an over enthusiastic or an erroneous sales pitch from a tech agent, as described in your post.
We market to consumers through the Internet and partner with high-growth technology companies like Avast. While technology in some respects is becoming simpler and easier to use, in some cases and for some people it has become more complex. It requires assistance with setup, installation, integration or application support. We have worked with Avast for almost two years and assisted 363,605 of their customers. They can also seek support through the Avast forum, but these customers choose voice and remote support as well. Despite the recent turn of events, we believe that this model is a perfect complement for the major freemium AV player and has enhanced their brand’s engagement with this group of consumers. This view is endorsed by the customer satisfaction scores for Avast customers over the last nine months that show over 95% of the respondents are satisfied, with a large majority being extremely satisfied (84%). 4% are not satisfied and we need to do a better job with them, and will figure out how to fine tune the agent sales process even further. The technical process has not been a question.
Which brings us to the opportunity we face. This is a Tylenol moment for iYogi and the leadership team. We have a great offering, our guys do great work, and we have helped millions of people for free. We have kept them safe. We have saved them time and aggravation. We are the only guys doing this. We have also made a mistake and will improve to keep it from happening again. We know how to do it. It will cost us some time and money, but it will be well spent. Like the makers of Tylenol we think that we can improve even more. Keep an eye on us, just like our partners and customers do. Tell us again how we are doing a few weeks from now.
Larry Gordon
President, Global Channel Sales
iYogi
NY, NY
A Tylenol moment? As in the purveyors of a bad product and dealing with the fallout, or the consumption thereof? Either way his metaphor sucks.
Regardless, if you have to upsell (and that’s not necessarily bad), do it AFTER you’ve solved your customer’s basic problem. Sheesh, nothing like holding a solution hostage.
Perhaps referring to the the 2010 Tylenol recall. Hopefully not the 1982 Tylenol murders.
might just mean it gave him a headache
He is probably referring to the 1982 incidents. Most business historians give the makers of Tylenol high marks for how, when the problem became apparent, they moved quickly to pull Tylenol off store shelves and kept it off until they had a solution.
Exactly. Provide a solution first before pushing a sale. Nothing wrong with a little upselling but don’t they think the customer will more likely buy it after he/she got a good experience/resolution from that call?
Is the Avast CEO’s email address supposed to include his first name, BK? It’s not linked that way in the story.
the email with or without the first name works.
Brian,
I bought a new laptop for the kids yesterday, an acer (cheapest on on the shelf) and today recieved an unsolicited call almost exactly like what you describe iyogi doing. Purchase was from a local computer store that has the initials MC. I’m calling their corporate office tomorrow to see what they know about this and I’m also reporting it to the attorney general of my state.
My wife got the call and knew that something was wrong the moment they mentioned windows, strictily Linux here.
That was an apology from iYogi? The company told customers they had problems that were not there, then pushed a costly subscription to fix them.
End of story, no need to wait a few weeks. The fact that Avast is considering doing business with iYogi in the future is troubling.
I’m assuming that Avast is contractually obligated to allow iYogi a certain amount of time (e.g. 30 days) to attempt to “cure” a breach before it can terminate the contract.
That said, courts have stated that “…a party’s conduct in breaching an agreement may justify its immediate termination, even if the contract includes an express provision granting the breaching party the right to cure before the contract is terminated, when there is a material breach of the contract so serious it goes directly to the heart and essence of the contract, rendering the breach incurable.”
Avast has acted ethically, and in my view has redeemed itself.
Larry Gordon’s iYogi letter, however, raised all kinds of red flags for me. I’ve been exposed to a fair share of vague corporate-PR-speak over the years, and that is what this looked like. I would have rather seen a clear and concise statement that “we have never endorsed this bait and switch practice and will sanction those who may have done so in our name.” Instead, we were treated to references to the Tylenol scare and boasts about customer satisfaction – note: that satisfaction was actually with with Avast, not iYogi – but the implication was that iYogi was responsible for that satisfaction.
I agree with Rick Zeman, above. The Tylenol analogy was lame. No one died in this incident, iYogi was merely exposed for employing distasteful and perhaps dishonest business practices. In 1982, Johnson and Johnson were recognized to have handled the Tylenol incidents well because they were forthright, immediately pulled and then repackaged their product, and cooperated fully with law enforcement. In other words, they took concrete action rather than merely issuing statements. I’m waiting to see concrete corrective action from iYogi.
JMO.
I took his “tylenol moment” as a sign that it was a massive headache, I didn’t think to relate it to the poisonings. I still see it as a huge headache, but now I’m not sure which way he meant it to be.
Kudos to Avast for taking this issue seriously. It reaffirms my faith in them. I wish other companies would take this same approach when it is discovered their partners have questionable ethics.
As for iYogi, I will keep an open mind and see how it goes. I’m not sure any company that employs support staff that are commissioned on sales can effectively provide honest quality support. But I guess we shall see.
I’m not sure what a “Tylenol Moment” is, but I’m betting they were having a Maalox Moment over at iYogi.
Avast can talk to their upper management all they want, but I would like to know how the phone support techs are compensated. If it’s on commission, especially if they are independent affiliates, there’s no way you’re going to avoid a repeat of this debacle.
I was going to make a similar comment but you just said basically exactly what I wanted to say.
Yesterday, I began research for a free AV with which to replace the discredited avast!. However, I had made no decision yet to do so. Barring true emergency circumstances, I find it pays, in general, to avoid haste in making major changes to my computer system. That is why I usually wait 2-3 days to install Windows patches, hoping that any unexpected problems therewith will have been found and solved by then.
Having read Brian’s latest post on the iYogi situation, I have put any change to my AV on indefinite hold. I, too, tend to think that avast! is making a major effort to acquit itself. Furthermore, I tend toward the theory that lightning rarely strikes the same place twice. Ergo, I think it likely that another AV service will be caught in a major error before avast! repeats any mistakes or commits any new ones.
Having been burned, avast! is apt to be on its guard for quite some time to come.
“Tylenol moment” – Seriously, WTF! (Someone pull an Lord Sugar on him soon1)
= It’s a business mode they chose to use! = It’s not freemium in this case it’s outright deception! =
At best it’s over incentivising their agents in the freemium space lead to them to fib about issues to push hard for a purchase, at worst it’s a fu5king scam.
Larry Gordon should get penalised for his lame response and and iYogi will have to re-brand to recover. I’d bet the masses agree.
Thats my $0.02.
This is not just some overzealous agents acting on his own.
Remember, their support PCDiagnostics software also showed numerous “errors” and “problems” on a brand new patched-up Windows installation, a method which every rouge antivirus employs.
Combine that with agent scaremongering and outright lying (when the agent said yellow exclamations in Windows Event Viewer mean problems) and the picture is pretty clear.
Therefore, scamming seems to be a practice for this company, not an exception.
Avast is used primarily by those who don’t know any better, so these kinds of scare tactics would’ve worked miracles in reaping profits from them.
Avast knew about this for some time, but took only token action to cover their back and let the business go on as usual.
For my part, I’ll actively discourage avast use on every PC I come across that it installed.
The main issue here is the way how iYogi operates. Instead of resolving the user’s issue and then offering him/her the paid for service, many would probably consider buying iYogi’s service. I mean, wouldn’t you, if they’d resolve your issue instantly the first time you’d call them? That would show they are really competent and they know what they are doing.
But if you call them for specific help, but they instead don’t give you the solution for help but instead give you fake info about non-existing problems and try to push you their paid for service first and still not resolve your initial issue. Then what was the point of the call in the first place? If you wanted a paid for service you’d just take the computer to a local computer shop or something. It’s what most users usually do.
Doing a long term money harvesting by giving customers a false sense of being threatened by some phantom errors is just lame and the worst business practice you can imagine. Sure you’ll fool some users (frankly, 2 million iYogi customers worldwide is not exactly a huge number) but in a long run, such business practice never worked. Honesty and good service is what makes good companies operate for decades. You can gain customers quickly, but you can lose 10 times more of them if they find out you’re dishonest.
I work in a retail channel and i can tell you first hand. It requires a lot of work to gain a customer that will return to your shop again, but takes just 1 wrong moment and you’ll lose that customer and probably all the others which will hear that customer bad experience. Or if it was really bad they’ll go public with the story and you can lose thousands of potential customers. And trust me, you don’t want that.
…Doing a long term money harvesting by giving customers a false sense…
CORRECTION:
What i meant there was “short term” not “long term”.
It’s a shame this kind of reporting can’t happen to local businesses. I used to work for a company that has a model not much different from iYogi. The guy I worked for would do the same thing with opening up the event viewer and use that as a reason that emergency work must happen soon and then when he would have their machine in the shop he’d call them up and con them into buying a new machine, the antivirus he carried, sell the installation of office off of a warez vlk and charge 150 an hour for “data recovery” a.k.a. copying files from the old hard drive into the new pc. I couldn’t stomache it and when I could afford to I left that company but I tried to help as many people the RIGHT WAY before I jumped ship.
You guys do not get the point.
Iyogi is a ompany in India. The management tortures the Team Leaders for revenue and the Team Leaders torture the call taking agents for revenue, otherwise agents would lose their jobs. So, the poor agent is instructed to con people and make sales.
I’m afraid that’s true for most of the call-centers in the world…
@Brian Krebs:
Hope you have an eye on ‘Kishore Chinni’ and a close look to the numbers (~500 calls/day from AVAST clients isn’t a big deal, but two million subscribers at $169.99/year is an annual volume of 1/3 billion with 5,000 employees…)
@ChennaiBrain: What you describe is what I would expect. In fact, it’s pretty much the best situation I could imagine.
I’m more concerned that the agents might be allowed to operate relatively independently and that they are paid per sale, with no one actually monitoring how they do it. They might not even be employees — they could be independent affiliates. In those cases, iYogi management would have no power to promise any improvement.
Even worse, if their set up is such that iYogi doesn’t actually know what their agents/affiliates are doing when they are remoting into the customer’s computers, they don’t know if the agents are making some money on the side by installing trojans to augment their personal botnets.
Avast is a good antivirus. Those using it, please continue to use it.
So basically what he is saying that it’s always ok to make an unsolicited call to someone whose information another client paid you to protect?
If this is the culture in India I will be sure to stay away from any company that has operations in India! I prefer my data to be in safe hands and not receive random calls from people asking if I am dumb enough to buy their service.
@ken,
Whoa, let’s not jump to conclusions here. For one thing, there are always people anywhere in the world desperate enough to make brazenly stupid sales goofs like this (do the words “boiler rooms” ring any bells?). Blaming that on “culture” is as mistaken as that “Tylenol moment” metaphor iYogi used in its rebuttal. Not all companies — in India or elsewhere — are after the quick buck, but castigating an entire nation’s ethics because of a bunch of unscrupulous people is really not a good idea.
Whoa, 😉
Lets not forget they are in a position of trust from the users prospective… then they pitch rather than help.
Brian Krebs: Destroying bad tech businesses, one company at a time ! MUAHAA XD
You’re awesome…….
All this points to the importance of having professional people with whom you can consult about what’s best for your situation. If something sounds strange contact your trusted techie and ASK! Most will gladly check it out and advise you accordingly. Better Safe Than Sorry!
So Avasts says “we will work with iYogi to determine whether the service can be re-launched.”
What? Even after the shenanigans that Brian discovered? Just dump ’em, Avast. Don’t give the crooks another opportunity to damage your business even more.
Here is the interview with Vince Steckler, avast! CEO, about the issue:
http://www.techweekeurope.co.uk/interview/avast-ceo-were-still-working-on-making-freemium-services-work-67650
Holding a customer hostage in order to upsell is an old tactic. Once upon a time I worked for Qwest, now CenturyLink. Management would hound hardcore on us to sell sell sell sell. If we didn’t sell, we didn’t make money which meant management didn’t make money which meant the Over Lords in Qwest got upset. I recall many times where I had to proclaim I was waiting for my computer to give me information so that I could fire questions and sales pitches off to the customer to try and sell whatever I could to them. Even when many customers were calling in to try to lower their bills, I was REQUIRED to sell anything and everything. So, I can see where iYogi is coming from and it is a crappy business model for customers especially when they withhold service just to make a dime.
“Tylenol Moment”? I’d call it more of a “Purple Kool-Aid” moment.
I would love to know who the 8 people are that went through the comments on the last article and thumbed down any posts critical of iYogi.
So far no thumbs down here. I guess the iYogi astroturf team is still in bed.
I was so… amused. .oO(Hope Brian provides us with some hint’s whether iYogi was sooo clever or Avast was sooo lame to downrate comments?!…)
Iyogi does monitor agents and keeps track of the remote access. Its not true that agents are not monitored. Iyogi has always addressed the Avast issue being the Primary Issue.
So iYogi is fully aware of the horrible tactics used by it’s sales force.
And lets start calling them what they are a “sales force.”
Is this for real or just a disgruntled employee?
“FRAUD SALES TECHNIQUES & PRACTICES
i like to bring the peoples attention towards FRAUD SALES TECHNIQUES & PRACTICES going on in IYOGI TECHNICAL SERVICES”
http://www.consumercomplaints.in/complaints/fraud-sales-techniques-amp-practices-iyogi-technical-services-c465992.html
Thx, enlightening.
Major difference between the makers of Tylenol and iYogi. The makers of Tylenol recalled their product because SOMEONE ELSE had poisoned a few bottles of it on the shelves. iYogi is responsible for poisoning itself.
I’m pretty amazed that Avast! is (maybe?) planning to continue to have a partner agreement with iYogi. Anyone can come up with soothing words for others to hear but what really counts is actions.
This is not the first instance of these questionable practices being perpetrated by iYogi employees if you believe anecdotal and recorded evidence that many others have provided. So why on earth are Avast! going back for more?
As other posters have pointed out the business model of iYogi is one that would appear to encourage disingenuous practices by it’s employees in order to make sales which has clearly happened. Do Avast! actually believe that they can change the culture of this company which IMO is simply there to encourage ripping people off?
Also that letter comes across as the worst sort of PR babble and gives me no confidence at all that anything will change.
The author is obviously just doing his job but since all he’s worried about is making the company look good and to hell with anything else it might as well not even have been printed.
It’s like asking Sea Shepard for an honest assessment of whale populations – why would you expect anything else other than lies and exaggerations to bolster their own interests?
BLAME IT ON GLOBALIZATION..DO NOT BLAME ANY COUNTRY LIKE INDIA OR ANY PEOPLE. BLAME IT ON YOURSELF. END OF THE DAY WHO GOT HOW MUCH AND WHAT IS THE QUESTION…YOU EITHER LIVE WITH IT OR DIE COMPLAINING FOR GETTING FOOLED BY CAPITALISM. WHO STARTED ALL THESE THINGS…I AM HAPPY BECAUSE I KNOW THE FACT THAT WE CANNOT STOP IT. ONE OR ANOTHER WAY ..PEOPLE GET FOOLED ALL THE TIME..MAY BE BY GUY NEXT TO YOU OR IN SOME OTHER COUNTRY OR BY YOUR SO CALLED LEADERS ..LETS NOT TALK ABOUT IT…
Jaker — Caps button’s on, dude. I assume you know that because your name is all in lower case. Anyway screaming comments tend to get buried. Good luck.
Bravo! I want whatever you’re taking if it leads to this much clearheadedness and brilliance!
N TRUST ME I LIKE BURGERS…ITS SO YUMMY!!!
target their vc funding too
draper fisher jurvetson, sap ..
http://en.wikipedia.org/wiki/IYogi
Brian,
Not sure if you are aware but iYogi also provided customer/technical support to CA (Computer Associates) customers and the forum was filled with many complaints where customers were urged to pay subscriptions to Iyogi, massive rip off prices of US$169.00 yearly subscription.
CA promoted a free support service with a nominal charge for removing virus’s from infected computers BUT iYogi took this to a new level with CA customers.
Buzzword heavy SEO @ http://antivirus.iyogi.com/ too.
WOT Add-on for Firefox claims this site is dangerous . . . !
“WOT Add-on for Firefox claims this site is dangerous . . . !”
WOT ratings are user-driven, and Brian’s article was discussed in the forums.
avast! shouldn’t claim this came as a surprise. I reported the problem in September, through ‘contact’ on their site and in the forum they moderate.
Every PC support vendor milks the target audience by tacit scaremongering and absolving themselves of the actual issues, though I agree iYogi has been really pushing it too far. Dell does this (have faced this myself, with their first generation i7-based XPS laptops), and so do many other AV & hardware vendors (almost all the computer vendors gave massive promos and lucrative deals on the pathetically crippled & heat-inducing i7-first-generation-based PCs & Laptops due to Intel’s armtwisting & clout), so let us not jump to crucify Avast now.
Hats off to Avast in taking the bold step to terminate iYogi’s contract after media reports (especially thanks to this blog!). Sure, they might have known about iYogi malpractises for a while, but remember, it is not easy dissolving contracts abruptly between long-standing partners, and it is the media whose job is to be acting as watchdog (rather than being Apple fanboys, LOL!).
Avast has been improving by leaps and bounds over the past few years, and changed from a clunky AV with a niche fan-base, to probably the most popular free AV (aside from MSE, of course).
Avast’s mobile product is also the best featured freeware product on the (Android) market, and even commercial vendors like Norton (Symantec) have been taken aback by Avast’s runaway popularity, and have been pushed to the wall to improve upon their featureset and provide value-for-money.
That said, most computer users (except for maybe very old people) are quite savvy about technology these days, and can comprehend if a support vendor is trying to take them for a ride. So, if iYogi has been successful in their unethical ways, their audience is equally to blame for not publicizing the aggravations earlier. Rather than mauling Avast, let these victims demand recompense from Avast and iYogi!
Fake AV is not just a rogue software, it is also a stark reminder of how easy it is for seemingly sane humans to be easily duped. The best protection against such threats is awareness.
So how long have you worked for AVAST?
Sorry been avoiding this but AVAST is a horrible clunky piece of bloatware now.
Any AV software that makes loud noises and talks to you should be avoided. It’s a bloated hard to remove memory hog. I hate it when I have to repair a system that has AVAST installed on it.