Fee or Discount

In this day and age, I find it surprising enormous corporations have not figured the difference in the perception of a fee vs a discount. Adding a fee causes consumer uproar. They feel the faceless no good bully is trying to make money unfairly. Even people who probably will avoid ever paying the fee on grounds feel it takes away an option. In the aftermath of the consumers taking to social media and winning against the big banks, this is not the right time for a corporation.

The way to change consumer behavior is to provide a discount for the option you want them to pick. A $1/month discount ($12/year) for customers who routinely pay through non-automatic payments options for them switching probably is enough to get most to change.  They feel like they gained something by doing so. Fair probably would be to give the same discount to those already using automatic payments, but I could see only offering the discount as encouraging the problem customers.

In the Verizon fee case, they wanted customers to setup automatic payments so they will not miss payments as often. It is good for both sides. Consumers are more likely to avoid late fees or service interruptions. Corporations will get a steadier flow of money from the consumers. A $2 fee to continue making one time payments was exactly the wrong way to encourage the correct behavior.

from Rants, Raves, and Rhetoric v4

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s