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Speed Dial: 60-Second Marketing Insight Newsletter
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Airline Checked Baggage Fees: Smart Business Decision or Marketing
Mistake?
Delta & Continental raised their checked-baggage fees yet again
last week in an effort to generate more revenue. Why not? Soon after US Airways did so in
August 2009, their president smugly noted that the increase caused a drop in passengers "so
small we can't measure it." Are these just smart business decisions or marketing
blunders?
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After all, the airlines aren't the only ones trying to stabilize profits
by nickel-and-diming their customers. Surcharges are standard in the hospitality industry.
Some quick-serve restaurants charge extra for a glass of water or more sauce. Auto
mechanics tack on disposal fees. Splashy promotions lure consumers to retailers only to leave
them a list of limitations at the register. And service agencies & consultancies
often charge for the smallest incidentals.
Some argue that it's savvy business to look out for number one and to
pass any costs you can along to your customers. As an expert in consumer
insights, I disagree. Especially now, these types of marketing blunders are one of the most
expensive choices a company can make.
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A Penny Saved... Can Be an Angry Customer Earned
Here's why. We're all in the relationship business, creating connections with our customers, consumers
& clients, and each contact point makes a statement. When a company snaps up $25
for luggage, adds an automatic 18% gratuity, or charges 15 cents per photocopy, it negates
the time & money spent on mission statements, ad campaigns, & positioning platforms with
a very clear message:"my interests trump yours and I'll take you for every cent I can."
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That's not the kind of relationship most of us want to be in for long; give us a
better offer and we're outta there. Smart competitors like Southwest Airlines and
Pearle Vision are courting customers away from the companies who value them so
poorly. These recent television commericials take advantage of the marketing blunders made by
their short-sighted rivals. |
I'm not suggesting that we eat all our expenses or continually compromise our profits. We
simply need to remember that perception is reality, and how our customers
feel after their dealings with us is one of
the key drivers in determining the length & quality of our relationship together.
An anonymous automotive sales person said it well: "I'm not just selling folks a car. I'm selling them their next five
cars." Whenever we have a choice, let's avoid such marketing blunders by assessing the true costs of
our consumer relationships- - and acting accordingly.
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