THE CUTTING EDGE : Intuit Gets Bitter Lesson on Fury of Scorned PC Users : Computers: Thousands complain of bugs in tax software, shipping delays and busy signals. The company apologizes.

By JULIE PITTA

March 8, 1995 12 AM PT

TIMES STAFF WRITER

SAN FRANCISCO — “You stink.” “With this kind of treatment, you won’t need a sales department.” “If possible, can you recommend a competitor’s product?”

That’s just a minuscule sampling of the communiques being sent recently to personal computer software firm Intuit Inc. In just six weeks, the vendor of personal finance software has received more than 7,000 electronic messages--most of them complaints--on its America Online bulletin board alone.

All this ire is directed at a company that has for several years been a darling of the PC industry, admired for its easy-to-use software and its zeal for customer service. Headed by Scott Cook, former Crisco brand manager at Procter & Gamble, Intuit has often been held out as a shining example of a technology company that understood the needs of the average consumer--but it is now getting a bitter lesson in just how fickle those consumers can be.

Bugs in the company’s two tax software packages, TurboTax for Windows and MacInTax, are one cause of all the outrage. Intuit Chairman and co-founder Cook conceded sheepishly last week that Intuit executives had known about the glitches for about three weeks. In a case of history repeating itself--Intel similarly swept a technical problem under the proverbial rug last fall--Intuit failed to notify customers of the bug because it was deemed not serious.

But the bugs are hardly the only complaint. Customers are grumbling about delays in shipping final versions of its tax software to mail-order customers: The final versions of TurboTax and MacInTax were shipped to mail-order customers as late as a week ago, and some customers who were among the first to order and pay for the software were still waiting even after it was readily available in stores.

And many customers were incensed about busy signals and long waits when they call Intuit’s support lines. Now a new problem has cropped up: busy signals when customers try to send tax returns electronically.

All of this comes at a rather awkward time for Intuit. The company appeared to have written the final chapter of a classic Silicon Valley success story late last year when it agreed to be acquired by Microsoft for $1.5 billion, a huge premium over its market price. But the deal has yet to receive antitrust clearance--indeed, it appears to have been indirectly caught up in the broader antitrust controversy swirling around Microsoft, leaving the Menlo Park, Calif.-based company in limbo.

What happened? In part, it’s a case of a company becoming the victim of its own success: Intuit simply under-forecasted how busy the tax season would be. Although the company would not offer specific year-over-year comparisons, it did say that 40% of incoming calls had to be placed on hold this year.

Further, more than 40% of its tax software customers are now sending returns electronically, up from 15% the year before. Tax software is a relatively new business for Intuit: It acquired tax software firm Chipsoft in December, 1993, and evidently didn’t accurately gauge what it was getting into.

The fury of the loyal customer scorned has been ugly indeed. Even Cook’s recent vacation has become fair game. “In my repeated attempts to gain some sort of satisfaction from Intuit, I was amazed to discover that during the busiest time of the year for tax software, Scott Cook is on a two-week vacation in Bora Bora, or somewhere,” said Patrick Rule, an independent record promoter in Columbia, Mo. “If I was the guy, I would have taken my vacation on April 16.”

“This is an example of how quickly consumers can turn on you,” said Nicholas Donatello, president of Odyssey Research, a New York consulting firm. “A technology company’s approach often is, ‘We’ll fix the bug and the problem will be solved.’ But what they don’t realize is that the problem isn’t just in the software, it’s in the market.”

“In the consumer market, a brand name is the most valuable asset a company has, much more so than any proprietary technology,” Donatello warned.

Intuit has begun damage control. Cook sent an apologetic letter to the company’s 1.5 million customers on Monday. Will that be enough?

Intuit Chief Operating Officer William Campbell says he believes a lot of the company’s problems are behind them. Most of the 100,000 back orders have been filled. New software, minus the bugs, has been released. And, he maintains, the calls--which had been as many as 200,000 weekly--have begun to slow down as the deadline nears. “We’ve had a reputation for . . . customer care,” Campbell said. “That’s a pact with our customers that we’ve violated.

“Maybe it’s more of a hope than a fact, but I think that our customers have had years of good experiences,” he continued. “I hope that because of one bad one, they won’t trash us.”

But memories are short among newly dissatisfied customers. “If this happens next year, they can pack it up,” said Joseph McGuigan of Wexford, Pa. “There’s a lot of tax software out there.”

Added another America Onliner: “I swear if it takes all that I have, I will try to write a superior product (not hard) that will be ready on time (not hard) and make it compete head-to-head with yours (maybe hard since you’re rich and I’m not, no thanks to you).”

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