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Randy Cassingham's BlogHistorical Details and Author's Notes from This is True®
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Customer Service: What a Concept
There's a reason why I posted this little diatribe, after running it in the 7 September free edition.
My wife told me this week she was trying to buy something online, but in addition to fairly steep "shipping and handling" fees (much more than the item would actually cost to ship), there was a 20 percent "restocking fee" added to the price -- you know, just in case she returned it. No thanks.
Weekly Weird News
Many businesses are adding "fuel surcharges" due to the high cost of gasoline. Hotels are adding "resort fees" for the privilege of being able to have a telephone in your room, or use their exercise room (whether you use them or not). Some hotels are also starting to rethink their free Internet policy, or charge $20-50 per day per computer if you use Internet in their conference rooms (for which they're getting top dollar, in addition to a lot of guests).
And don't even get me started on the airlines these days! Sheesh.
Yeah, the economy is tough. The way to stay in business isn't to pound on the people still doing business with you by adding fee upon surcharge upon price increase. Yet that's what so many are doing. It simply costs more to fly a plane? Then raise the ticket prices! Don't charge me to check my one suitcase, ensuring everyone tries to bring their suitcase into the already overcrowded cabin space.
My costs for running True have gone up over the years, and in fact there have been two price increases for Premium upgrades. They reflect the "cost of living", not temporary spikes in the cost of doing business. There is no "e-mail convenience fee", no "fuel surcharge" because it costs me more to fill up my tank to go to the printer or the post office, no "credit card processing fee" for you to use my shopping cart. The cost of Premium subscriptions haven't gone up since 2004, and I'm not about to raise it just when things are getting tough out there.
My business philosophy is pretty simple: 1) treat people the way I like to be treated when I do business with others, and 2) give great value for the price. People seem to like that, and keep coming back. That's why the vast majority of Premium subscribers, for instance, not only renew, but renew for two years, and say things like Doug in Illinois said this week, when he renewed his Premium: "Even as I search for a new job, I *have to* keep this subscription." -- that's how much True means to him. And you can be sure Doug fully understands how tough this economy is!
You can support one of your favorite businesses -- True -- and get double the stories (and see why readers like Doug are so incredibly loyal) with an upgraded subscription. Instead of pitches like this (and instead of outside ads like the free edition has), you simply get more stories -- so the e-mail is actually about the same size. For more info see the upgrade page.
So why did I bother to post this on my blog? Because a reader asked me to, so he could link to it. Yep, customer service -- what a concept.
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8 Comments on This Entry
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Posted by Karen Clow, Calgary, AB, Canada on September 23, 2008:
Overall I agree, but your dismissive tone regarding restocking fees irks me a little. I know that far too many business make far too much extra scratch from frivolous, superfluous extra fees, but before you judge restocking fees so harshly, you may want to read http://www.snopes.com/politics/business/restock.asp if you haven't already, it offers and important perspective that many people miss. I know I should probably express my point in my own words, but the Snopes folks say it much better than I could, and a copy/paste would go against their wishes (something I'm sure you of all people will appreciate).
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You need to slow down a little and read what I actually said. I don't have a problem with restocking fees when you return something. I have a problem with charging a restocking fee "just in case she returns it". They charge a "restocking fee" to everyone, whether they return the item or not! That's not a "restocking fee", that's a none-too-hidden price increase, and is ridiculous. Feel free to argue about that! -rc
Posted by Ken, New York on September 23, 2008:
Well, in all fairness to Karen, I missed that "subtle" point about the so-called "restocking fee" being charged to everyone.
Of course, the reason for all of this is that they hope people will shop solely on the advertised price, and won't notice all those extra fees, or will assume that the same fees would be charged by everyone. And, unfortunately, they're probably right to some extent. Imagine the impact on an airline's bookings if they advertised the this-is-what-your-bill-will-be ticket cost, while the other airlines continued to only advertise the pre-taxes-and-fees cost.
At least with hotels, you can dispute such charges and they'll typically take them off your bill. ("You quoted me X dollars, and that's what I'm paying!") You can't do anything about the taxes, but the rest are up for grabs.
Posted by Penny in Columbia MD on September 23, 2008:
This "disease" of extra fees has also moved into hospitals, well beyond the ridiculous prices for an aspirin or booties. I recently underwent surgery requiring an overnight stay. Since I knew I would be pretty doped up and never very interested in TV anyway, I made the call before hand to opt out of TV and phone connection - $45/day worth. Two weeks later I got the bill in the mail for the two days of service - as they counted it, though I was in the room less than 24 hours total. It required four phone calls and too much of my time to get them to recognize the orders they agreed they had received in the first place. All I can assume is that they were counting on my not paying enough attention to what was on the bill and paying it anyway.
Posted by Mike from Dallas on September 23, 2008:
But wait! There's more! If you order right now, we'll include this handy dandy gadget at NO extra charge; you just pay shipping and handling (at 5 times the cost). If you're not satisfied, simply return it for a full refund. Of course, since it was free, you get nothing. S&H not refundable.
Doesn't it seem like marketing degrees are now given for watching late night infomercials? A comedian in 1978 said, "Send $6.95 if you want it, $9.95 if you don't!" There's an entire segment in Mike Nesmith's "Elephant Parts" where a 'corporate spokesman' states, "We're not hoping you're stupid, America, we're COUNTING on it!"
I actually get paid by companies to fix customer service mistakes that can cost them bigtime, and I'm amazed how much they STILL argue with me that they were justified in their decisions. What's interesting is that I'm still making a good living fixing their mistakes (the ones that want them fixed). Others blithely swirl down the toilet of bankruptcy, still complaining how the stupid customers are responsible for their downfall.
150 years ago, they were snake oil salesmen; today, they're marketing agencies. Don't cut your prices to the bone and then blame the customer for accepting them.
Posted by Joe in Texas on September 23, 2008:
I once heard a comedian say, "The other day I heard an old farmer talking about having his cows serviced by a bull. Finally, I understood customer service."
I can't say it any better than that.
Posted by Cathy in Casselberry, FL on September 24, 2008:
In response to Penny, yes, it seems an outrageous amount to pay for a tablet, but when you realize all that goes into it, including the fact that nursing is not an income producing department, you realize that the hospital has to get it's operating costs from somewhere. Would you rather they charge you for that wonderful food they prepare and deliver each mealtime? I think not.
I do agree that charging $45/day for tv and phone is outrageous. I would vote with my feet in that case. Unfortunately, I don't have that option as my husband works for a hospital and that's where our insurance requires us to go. I find it mildy amusing when they thank me for using their hospital when I have to call for something. I feel like I should be thanking them for giving my husband employment that pays enough to cover the medical expenses that come from my having cystic fibrosis and it's complications.
Posted by Bruce, South Carolina on September 24, 2008:
Wonder if Ken in New York has seen the new ads for Southwest Airlines. They stress the fact that the prices they quote you for a flight are the bottom line prices, not the price before all the taxes, 9-11 security fees, airport costs, baggage fees, etc.
Posted by Neil, UK on September 28, 2008:
Firstly, Ken: was Randy not clear enough about the "restocking" fee? I wouldn't have thought that the essay made much sense without that central point...
Secondly, while obviously I do think that it charging for things that you have no choice about, even if you don't use them, is a totally illegitimate way of doing business, (this joke highlights the point quite effectively), separating out charges for optional things isn't. It's true that I'm more likely to do business with a company that includes things, as that makes my life easier, but that doesn't make the alternative illegitimate, and I might do business with them if I had enough time on my hands to analyse in detail what I actually needed (such as if I was taking minimal luggage on a flight).
There's also the tendency for market forces leading to businesses thinking that the only way forward is to cut costs or to cut the level of service included in the price, but that's a whole different problem.