As customers, we understand prices on most things we buy tend to go up over time. It’s part of the cost of doing business so we accept it without much fuss.
But if we feel we’re not getting treated fairly, then there could be problems. Are we paying more because we’re getting more in return? Is it because everything is going up in price? Or is it because a company (or industry) sees an opportunity to generate more revenue without increasing value to their customers?
An example many of us deal with directly is airlines’ baggage handling fees.
We all know airlines now charge more than ever for us to check luggage rather than carry it on the plane. An outcome of this is we pay more to fly. Another cost is time. More people tend to carry on their bags so getting on and off the planes takes longer.
And it’s not clear we’re getting better service for the extra fees. This article, in USA Today, shows many flyers are still having their bags mishandled.
Because of this, some travelers have decided to switch to a more reliable way to transport their luggage. They are shipping their bags via UPS. It’s usually more expensive but it can offer peace of mind and time-savings.
Are airline customers getting more or better service for their increased fees?
I’d say the answer is “no”. Service might not be worse but it does not seem to be any better. If it is, the airlines needs to do a better job explaining how it’s better. If they explained how higher fees translated to greater value for their customers, they might have happier (and more loyal) customers.
How about your business? Are your customers able to see a direct link between price increases and greater value to them? if not, how could you make that happen?