Nickels and Dimes

The Washington Post wrote on Sunday that most banks hide the total list of all fees that they charge customers. All fees are not listed on most sites and agents were unable to get a full list of fees when they requested one in person at a branch.

Since the advent of ATM fees, many, many banks have realized they can nickel and dime (or dollar and twenty) their customers without losing many of them if they make the fees non-obvious or hard to avoid. This added millions to the bottom line but what a way to treat your customers. It leaves a huge opportunity to differentiate your company by treating your customers as valued business instead of cash trees to be shaken for spare change.

Even the cellular companies are starting to clue into this. Most of the major players have rolled out unlimited talk plans for around $99/month. AT&T even offers a truly unlimited data plan to go with it (most others charge extra fees over a certain amount of bandwidth used). These plans only make sense for people who talk a LOT on their phones. These are also some of the most profitable customers they have as well. Why not treat them well with a plan that eases their mind about no additional fees while also making good money for the company. That’s the kind of dynamic you should look for.

Amazon’s Prime membership is another example of this virtuous circle. Prime members receive free 2-day shipping on their purchases: the more they buy from Amazon the more valuable the membership. Nice dynamic!

Look for those virtuous circles in your own company or organization when considering pricing strategy. Money given to you should be in exchange for value, not as an involuntary ransom or tithe.

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One thought on “Nickels and Dimes

  1. Amazon Prime certainly works for me! Especially around the holidays, it was a godsend–and Amazon got a good chunk of my business that might have gone to other retailers.

    This is why I think that even associations that go to an al a carte method of pricing for dues should include some kind of all-inclusive value dues classification. You don’t want to drive away members who want a high-touch, high-value option.

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