The Customer View

Fly Me to the Moon

People don’t mind paying for premium service.  They don’t mind cost so much when they know what to expect.  But imagine dining in a restaurant, ordering from a nice menu, and then discovering that there are extra charges for the dishes, glasses, and silverware.  That glass of water?  Extra.  Oh, and remember when you asked to move away from the table by the kitchen door, to that empty booth in the corner?  That's another BIG extra charge.

In this crazy scenario, I believe that most level-headed would soon stop dining out.  But isn't this exactly what the airlines are doing?   

In the 2nd Quarter of 2010, U.S. airlines collected $2.1 billion in fees and extra charges from passengers in the, up 13 percent from the first three months of the year. This is from the US Department of Transportation’s Bureau of Transportation Statistics’ recent quarterly report.  This $2.1 billion has been collected for the following "services": baggage fees, reservation change fees and miscellaneous operating revenue, including pet transportation, sale of frequent flyer award miles to airline business partners and standby passenger fees, as well as revenue from seating assignments and on-board sales of food, drink, pillows, blankets, and entertainment.  None of these are listed "on the menu" when one buys a ticket.

Oh, and by the way, I haven’t noticed a whole lot of customer service awards being granted to airlines these days. Seems like all of them regularly run behind schedule, and a lot of their personnel are pretty grumpy. There are a couple of airlines that seem to “get it,” but for the most part, the customer experience is pretty mediocre-to-poor.  So what’s a customer to do?  

Well, the Consumer Travel Alliance , the Business Travel Coalition, and the American Society of Travel Agents have launched the website MadAsHellAboutHiddenFees.com.  To date, they have collected over 50,000 signatures, including mine, on a petition they plan to present to the Department of Transportation (DOT) today (9/23/2010).  I think when fifty thousand of your customers speak up against how you are running your business, and they are mad enough to go to the government about it, you kinda hafta listen, dontcha?

I will be very interested in seeing how this plays out.  At least one of the airlines that “get it” is making the fact that they do NOT charge for checked baggage a big part of their advertising campaign.  Good idea on their part, but at the same time, kind of sad that NOT charging a hidden fee is viewed as a competitive advantage.

 -- Chuck Dennis

Customer Retention Outside the Box

I read an interesting piece today by Australian business consultant Peter Shallard, called Repeat Business and Customer Retention Formula Revealed.

He talks about a coffee shop in Sydney that, in addition to serving good coffee in a timely manner (a baseline for any coffee shop), had Polaroid snapshots all over the walls.  The photos are all of dogs, all taken in the cafe, with each pup's name written on the bottom.  Mr. Shallard then looked around at the other patrons, and estimated that 80% of them had dogs with them!  This is when the light bulb went on for him.

This cafe, one of many within the area, had built a loyal clientele by providing a good product with good service, and then combined that with another, unrelated, aspect that many customers were drawn to. 

To Mr. Shallard, and to me, this is brilliant in it simplicity.  For almost any product or service being sold, there are no doubt dozens, if not hundreds of other competitors selling the same thing.  Quality, price, service, and locale may not be enough to win a customer's loyalty.  But combining a business' primary product with another unrelated (but interesting) concept may seal the deal for certain customers to whom that unrelated concept appeals.

I imagine this was the thinking behind the first sports bar.  People get thirsty and hungry, so let's open an establishment to provide them beverages and food.  But wait, many people like sports, too, so lets decorate the place with sports memorabilia, and put a bunch of strategically-placed TVs throughout, showing sporting events or sports-related programming! Genius!

So, let's look at our own businesses.  We all work hard to provide a quality product and great service.  But what else can we add to that, that will appeal to a significant segment of our buying audience?  It doesn't have to be big, expensive, or complicated.  Polaroid snapshots of dogs on the wall - hello?

This is a great way to increase customer loyalty and retention, and have fun while doing it!  What a concept!  What can you add to your business to lock in loyalty from a significant segment of your prospects?  Please comment and share your ideas, and feel free to link to your site!

Capitalism or Greed? Often, a Fine Line...

Good old fashioned capitalism?  Or price gouging and scalping?

Thousands of  "tweens" don't really care what you call it.  All they know is that their dreams of seeing 14-year-old singer / actress / icon Miley Cyrus, aka "Hannah Montana," have been squashed by ticket brokering organizations who have bought up the vast majority of tickets in a number of cities across the country, and are selling them for 5 to 35 times the list price of $63.

On the one hand, free enterprise works on the premise of first come, first served.  And if you have enough money, you can purchase what you want.  And what these ticket brokers want is tickets that they can sell for profit.  That's how they make their money.

On the other hand, if you or I tried doing that, we would be arrested for scalping.  So, apparently it's okay to do on a mass scale, as long as you hide behind a business name and have a web site.

A recent article on cnn.com, titled Brokers Snatch Joy from Hannah Montana Fans, discusses this phenomenom.  Now, this kind of thing happens to concerts and ball games and other big events all the time.  But this particular occurence strikes a sour chord on a couple of levels.

One, the ticket brokers bought up almost ALL of the tickets in many major cities, almost immediately.  So there was little opportunity for the rank and file to purchase their tickets at the list price.

And the other issue is, this event is for KIDS.  It's a big deal for kids - this is probably the first concert that many of them were interested in attending.  And the listed price of $63 was high enough, but once the scalpers... uh, I mean brokers got into the game, the prices skyrocketed into the ridiculous (four figures, for heaven's sake!) range.  And due to the targeted demographic here (10-14 year old girls), they are not going to go to this event alone.  Most will require a parental chaperone (i.e., another full-priced ticket).

Miss Cyrus, and her father, country music star Billy Ray Cyrus, sort of just shrug and give a sad little smile, saying there is nothing they can do about this, because, frankly, no laws have been broken by the brokers.  No, it is the system that is broken. 

But what if the Cyruses decided to put on some free shows?  The scheduled Hannah Montana shows are already sold out (thanks to the brokers), so Miss Cyrus wouldn't lose any money.  And she would gain even MORE adulation from her adoring fans.  And the greedy, price gouging brokers would maybe think twice before pulling this kind of stunt, at least to this extreme, in the future.

   -- Chuck Dennis