Comments on: Nickeled & Dimed

By: Scott Townsend

Scott Townsend — Thu, 15 Feb 2007 16:56:22 +0000

I have forward this article to several people within our company everytime they realize some vendor is “getting to us” for this or that. And when they read this article, they go back and scour their bills. Great article!

By: Ted Mininni

Ted Mininni — Fri, 02 Feb 2007 14:03:16 +0000

Casey,
Thanks very much for your input. You’re right on target when you say that: “the cost of acquiring new customers is high, the cost of losing them is a lot worse.”
Let’s hope discussions like these start a groundswell of consumer discontent and that they do something about it.
And let’s hope the companies that engage in these practices, change tactics. Not only due to public opinion and pressure, but because it’s the right thing to do.

By: Casey Davis

Casey Davis — Thu, 01 Feb 2007 14:18:30 +0000

Great spot! The message the must have had a real affect on customers everywhere. Would love to see the numbers.
I’ve spent the last 20 years in financial services marketing, client and agency side. Nothing is more discouraging than when some bean counter (CFO) orders up a boatload of fees to boost income – all at the expense of your most loyal customers. Instead, we should treat those loyal customers like gold…the cost of acquiring new customers is high, the cost of losing them is a lot worse.

By: Mandy Vavrinak

Mandy Vavrinak — Thu, 01 Feb 2007 14:18:26 +0000

One thing to remember here is how the lesson applies to our own businesses and business practices. We used to routinely charge clients “project management” costs and “file management” costs and the like. Yes, these things (meetings; locating and massaging large files) DO take significant amounts of time (and therefore money) which must be recovered in order to profit. BUT, we receive far fewer pricing complaints now that we roll those charges into our “creative services” fee. People don’t want to distrust you (or us). Don’t give them a reason to.

By: Ted Mininni

Ted Mininni — Wed, 31 Jan 2007 13:24:00 +0000

Good point, Tammy. Consumers have limited options in some cases, especially if an entire industry engages in these kinds of practices. In that case, groups of customers should band together and write/call the company to express their displeasure in a courteous manner. They should also let it know they will take their business elsewhere. Customers can also say they will use WOM to inform everyone they know of these practices.
Many companies don’t want to have that kind of negative publicity in today’s competitive business environment, and with a bit of applied pressure, they might relent.
Bottom line: if consumers have no reaction, this kind of thing will continue to happen. It’s up to all of us to object to these practices.

By: Tammy Strnatka

Tammy Strnatka — Tue, 30 Jan 2007 22:30:35 +0000

These big businesses that nickel and dime us have the government in their pocket too. Meaning, Keeping fat cats fat guarantees the companies leeway to charge ridiculous fictitious fees without regulation.
Sure I can take my business elsewhere but they’re all doing it. What do you do when you run out of options? I’ve tried to play cat and mouse with different services and pit them against each other but after a while whether I’m the cat or the mouse I get too exhausted to play anymore. So I roll over and just Grrrrr.

By: Ted Mininni

Ted Mininni — Tue, 30 Jan 2007 16:37:01 +0000

I’m sure many of us are with you, Maureen. GRRR.
I agree with you, Jeff. Consumers who feel they’ve been burned simply take their business elsewhere: the competition.
Excellent point, Mark. Why not add some of these costs into the brand? Better yet: why even charge so much for what ought to be a basic hospitality service these days?
Lewis: succinct and on-target, as usual. “Loyalty be damned”–obviously the thinking of companies that routinely engage in these practices.
Service providers ought to be thinking in terms of taking the long view if they want to sustain relationships with their customers and develop loyalty among them.

By: Claire Ratushny

Claire Ratushny — Tue, 30 Jan 2007 16:30:31 +0000

Based on my past experiences, a number of these companies seem to be banking on the fact that their customers won’t have the time or the inclination to go through the bills they send out.
It’s annoying and irritating when as a long-term customer I’ve come to the realization I was being duped by some reputable businesses. In cases like this, I’ve chosen to take my business elsewhere.

By: Mark Martel

Mark Martel — Tue, 30 Jan 2007 16:19:09 +0000

Great point. I also think of this lesson when I stay at hotels that charge anywhere from $15-20 for internet access. I understand that these hotels are capturing easy surplus from captive, expense-account-driven, price-inelastic business people. I’m not quibbling with it as a sound pricing/profitability strategy. But for me, it still cheapens the brand. I’d much rather see the price simply rolled into the base room rate. I think to myself, “If Courtyard can offer free internet access in a $100 room, why can’t the W roll it into a $250 room?”

By: Jeff Herz

Jeff Herz — Tue, 30 Jan 2007 16:14:29 +0000

Obviously these companies are willing to forgo any CRM initiative for the short term gain. It is not enough that they are already charging me interest for the right to use their money or service, but then have to add additional annoyances to ruin my experience and their reputation.
I know I have certainly left companies for their competitors because of such events in the past, and would not hesitate to do it again.
But hey, maybe it is just me.
Jeff

By: Lewis Green

Lewis Green — Tue, 30 Jan 2007 13:31:40 +0000

Ted,
Your correct: this is about short-term profits, not long-term relationships. Loyalty be damned.
We learn in Business 101 that we make money catering to our customer base because it is less expensive to sell to current customers than to find new customers. Apparently, some CEOs slept through that class.

By: Maureen Rogers

Maureen Rogers — Tue, 30 Jan 2007 12:44:31 +0000

My favorite is the “convenience” fee tagged on to online ticket purchases. I’ll admit it’s more convenient for me not to trudge out in the cold to the box office, but it’s also a lot more convenient (and cheaper) for the team/theater/whatever that’s selling the ticket. Grrrrr.