Wednesday, February 20, 2008

How to make your customers feel "ripped off"

I discovered a new marketing blog through my free subscription to MarketingProfs.com.

This website is about Collective Wisdom. That's because some of the best ideas come from others and unlike Mr. Obama did recently, I will grab other peoples ideas and give them their due credit.

This is from Ryan Karpeles Blog Living Light Bulbs.

Enjoy:

We all hate additional fees. The processing fee at Ticketmaster. The $3 Pepsi on the airplane. The exorbitant wi-fi charge at hotels. And apparently, the recently instituted "$2 top-off fee" at Dollar Rent A Car. That's right. Dollar now charges you two additional dollars, even if you return the car with a full tank of gas. Here's the exact wording from their confirmation email:

"Gasoline Policy: Vehicle must be returned with full tank or local refueling charge applies. If car is returned full a $2.00 top off fee will be applied."
Not only is this obnoxious, but it's also unfair to the customer. There's no way around it. You either pay $2, or you get stuck with the bloated "local refueling charges" (which are always higher than the market cost of gasoline). The ironic part is that the $2 means almost nothing. It's the principle that matters. If Dollar raised its initial rate by two bucks and got rid of this policy, you probably wouldn't notice.
Rather than nickel and dime your customers every step of the way, try a different approach. Bump up your prices a little and give away the extra stuff for "free."
A $3 Pepsi on a $600 flight is sure to tick a few people off. But a $603 flight with complimentary Pepsi will probably make some passengers a whole lot happier. Before you enact a bunch of new policies to make an extra buck, think about what kind of message you're sending. There's probably a lot better way to accomplish the same thing.

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