How some terrible decisions now threaten the once-great provider of smart-heating solutions.

Update: Tado’s PR director reached out to me and provided some updated statements on the PR crisis. This conversation has been added to the end of the article.

Tado is company that makes smart-thermostats.

To start with — everything was going very well. They found a winning combination by selling both smart thermostats and smart radiators.

This combo — together with an Apple-like minimalist design — begun to win over customers.

It was all going so well…

Fast-forward to today — November of 2018 — where some poor decisions threaten the company’s future.

Specifically: Tado has tried to force an unadvertised stealth subscription fee of £3 ($3.8 USD) per month for people to use the thermostats they have paid for.

This scheme went about as well as you would expect.

In fact — the backlash has been so severe that Amazon (a significant Tado investor) has suspended all reviews of their product.

To stop people from warning others, when you try to review the product you see this cryptic message:

However, this hasn’t saved Tado’s reputation.

The impartial review site TrustPilot has Tado down at 1 out of 5 stars on average — across 153 reviews:

https://uk.trustpilot.com/review/www.tado.com

Plus there is a growing outcry on social-media. Every post on the company’s own Facebook page is filled with angry responses on this single issue.

Exactly What They Did

If you watch Tado’s commercial it’s all about one feature: geo-fencing. This is the idea that your thermostat knows when you are away and automatically adjusts the temperature to save energy.

This is their main selling point. And this is exactly what the company is now trying to charge £3 every single month to use. After you’ve already bought the whole hardware setup in the first-place.

Making It Worst Part 1 — The Lies

The worst part about this is even today (18/11/2018) the company’s website does not indicate that a subscription is required.

Take this TV Advert/YouTube video: https://www.youtube.com/watch?v=u82tCF7Au5k, the only thing it says is “Tado automatically turns off the heat when you leave” — this is simply not true. This function (the advert’s one claim) is now a subscription-only add-on.

Let’s examine it their smart-thermostat page. They still have the for-pay feature listed prominently as the major benefit:

But there’s no mention of the subscription.

In fact — the closest they come is mentioning the “Auto Assist” as something that “can be booked in the app”:

It is — quite simply — false advertising.

And in case you are wondering… no, there’s no mention of it in their “Frequently asked questions” either:

Making it Worst Part 2 — The Backtrack

The company had previously promised that all software upgrades would be free. In an ill-conceived attempt to justify this *ahem* misunderstanding the company threw-together a blog post.

Warning: the blog post will make you cringe.

Apparently — the new version of their app isn’t a software update. Of course not. Actually, it’s an entirely new product — hence the company feels they can now charge.

…Yeah.

So, how did they handle the outrage? (Spoiler: not well.)

They are giving users of their older products an “offer” to purchase the software upgrade for a one-time fee of £19.99 ($25.65). This will let them continue using the product they bought many years ago, including software updates.

Seriously. That’s what they are currently trying.

New users don’t even get this “discount” option. You should simply return the product.

Even returning the product may be tricky — as the company has been overwhelmed with support tickets recently (I wonder why?).

Is it Too Late for Tado to Save their Reputation?

A lot of damage has already been done, and the internet remembers.

Every day the company is doing more damage, as more and more irate customers discover the hidden fees. Here is what we hope Tado will do:

Step 1: Obviously they need to reverse their hidden-fees and send a no-nonsense apology email to every customer. The policy u-turn is inevitable: the question is how quickly will the company realize this? Hint: you simply can’t hide fees in the internet age.

Step 2: If an executive (e.g. the CEO) resigns, it would be easier for Tado to declare a new-leaf & distance itself from these actions.

UPDATE 09/12/18: Conversation with Tado PR director

After this article Tado’s PR director reached out to me and we had a phone call. I submitted the following 4 questions for his formal comment.

1) For me and many others, the subscription was not clear — despite doing significant research. Your website seems intentionally deceptive. (e.g. “Auto Assist can be booked through the app” instead of saying “purchased”?) Why do you not put this information clearly on the Smart Thermostat product page? 2) In its current form — the update appears to simply takes features and put them behind a paywall. Is it correct that you are currently selling a good version (v3), and a bad version (v3+) at approximately the same price? And you’ve made an offer to help the people with the good version (for a price) — but absolutely no offer at all to the people with the bad version? 3) It seems evil to force people to use their phone while driving, or pay you extra money. It also seems evil to intentionally disable an energy saving feature & hold it hostage. Clearly this is equivalent to intentionally wasting customer’s energy. Is this a fair summary and does this reflect Tado’s values? 4) Is it correct that your current best recommended remedy for people who have unwillingly bought v3+ that they should a) uninstall the product, b) return it, c) find a supplier who has v3 in stock, d) buy the older (superior) version, e) pay for installation again, and f) go without heat during this process.

The response did not directly answer these questions — but to be fair to Tado they were aggressive questions.

Here is the full statement from Tado in its entirety:

Hi Sam, We are very sorry to hear about your experience and treat it very seriously. When we launched our V3+ product suite earlier this Autumn we tried to be clear and transparent on the new product and the Auto-Assist feature. Here’s what we have done/are doing to date: Sent out a press release, which you can find on our website, that clearly states the cost of Auto-Assist as well as updated our website to show the new features of V3+ and the Auto-Assist costs. Published a blog post on our website about how V3+ is different from V3 and how Auto-Assist works and its associated costs. Clearly communicate Auto-Assist to every journalist we speak to regarding reviews. Currently running TV commercials in the UK and on our Youtube channel that make no reference to automation. However, we know that we can do more to improve transparency. Here’s what we are working on: We will shortly have a significant website update to make Auto-Assist more prominent and clear. We will also publish additional Help Centre articles on Auto-Assist to bring more clarity. We will soon launch a new customer forum on our website to provide more transparency and help address customer and potential customer questions. This will open up a new way for customers to engage with each other about all things related to tado° tado° V3+ is a premium smart thermostat with or without Auto-Assist. As standard, Geofencing works like most smart thermostats on the market, a notification system that alerts you when the last person has left home. Auto-Assist automates this feature for Geofencing and Open Window Detection. For our existing pre-V3+ customers we made a special upgrade offer as a thank you for their continued loyalty and support. Anyone is free to purchase V3 or V3+ products from our many retail and utility partners, though we don’t set their prices or bundles. Regarding Amazon, tado° has no power or reason to disable Amazon reviews and we are working on having them restored. Kind regards, tado°

Let’s discuss Tado’s response.

The good: Tado has updated their website. It now at least mentions the charge (albeit still a little burried). Tado should also get some credit for reaching out to me.

The bad: the “new TV spot” that makes “no reference to automation” can be viewed here: https://www.youtube.com/watch?time_continue=13&v=iX9SF1mGmmI — let me give you a direct quote from this advert: “Tado turns the heating off when you leave, and back on before you get back”. Maybe we have a different definition of automation? What’s most amazing here is that they clearly thought I wouldn’t check their claim. It’s just so clearly & factually wrong.

Conclusion

TLDR; I’ve done enough research to see that Tado USED TO make decent (pre-paywall) products — but they are just a terrible, unethical company.

They have basically tried to implement a paywall on people’s hardware — even when people have already bough it & have been absurdly greedy with their paywall price-point also.

This next paragraph is PURE SPECULATION.

Their new CEO (Toon Bouten) joined the company 1 year ago. I can imagine a scenario where he gets the job by promising to boost profits by adding a subscription model. (“If only 15% of our customers take the upgrade — that means…”). Again — this is PURE speculation — but imagine he gave the engineers 1 year to come up with something that would be genuinely worth the premium. The time passes — and promises have been made to investors. (Amazon led a $50 million investment just before the disaster. Whoops.) Without any worthwhile new features to justify the subscription — the company is now forced to strip away core features from the product to deliver this promised subscription revenue.

In this hypothetical scenario (again — pure speculation), you can see how Tado could have found themselves in a no-win situation. This could go about 1% of the way towards justifying the terrible decisions…

Because let’s be real here. Decisions this bad do not come along too often.

This is an interesting case for several reasons.

This is a case of a company clearly & directly lying to their customers (in my opinion). There are many “hand caught in the cookie jar” statements which can so clearly be proven to be false. The partial backtrack was the super-greedy kind which just makes things worse. From a business perspective it seems pretty clear that this will cost Tado their hope of winning the smart-thermostat race. My personal prediction now is that they will let things deteriorate for a few more months & then: a) bring in a new executive team, b) backtrack, and c) try to repair the damage. But that will be an uphill struggle.

If I was to guess I would say the Christmas period will hit them particularly hard as they see a huge number of returns and bad-will.

I would personally be surprised if the executive team remains in-place after one of the bigger observable leadership disasters of the year.