1 featured image 1
Marketing Strategy

The "Customer-Worst" Business - Why Pricing Software Is Not For You.

July 3, 2012

It's Not Easy Being Cool...

Slipping up on Customer-First

Anyone paying attention to the news this last week may have seen the blurb that some Orbitz users discovered that those among them who were Mac users were being charged higher prices than their PC-using brethren. In what can only be described as a shameless and cynical technique to exploit customers by making assumptions about their sensitivity to pricing, Orbitz has shown a special kind of disdain for its customers in an age where many of us still wrongly assume that the businesses we patronize are constantly looking for ways to keep our loyalty. Oops.

50 Ways to Pick Your Pocket

For a real in-depth look at the latest bane of the "Customer-First" world, this week'sEconomist newspaper ("How Deep Are Your Pockets?" June 30th edition) explains in detail some of the different ways online businesses might be using similar software like this, known as "price-customization software".  According to one source referred to in the story, six out of ten of America's biggest online retailers are customizing prices in some manner.

While it may not seem entirely a bad thing when one thinks about the dynamic pricing historically employed by the airlines and more recently, the hotel industries, the major difference is that they are pricing based on "supply and demand", something we've accepted in our culture for centuries. Pricing based on the seller's perception of your ability to pay based on small clues provided by your behavior or your material possessions however, is not.

"Customer-Worst" Crime Does Not Pay

Don't do it. It's that simple. Don't even think about it. Your business doesn't need it, and any model that someone shows you that demonstrates how much additional revenue you can generate won't include the amount of your time you will need to waste contemplating your levers and more importantly - the time you and your staff will waste trying to explain it to angry customers, and the additional marketing investment you will need to create new customers to replace them.

Go back to the "Customer-First Business Model" and it's obvious. Software like this falls into the discredited "Shareholder Value" model at the expense of customers. Period. Flip it around and ask yourself "How do I want to be treated as a customer?". Transparency. Fairness. Value (for starters). Does a pricing model like this give you the opportunity to provide that experience to your customers? Of course not. End of story

And shame on any business out there using it like this.

To get your own copy of "The Customer-First Business Model" and help yourself avoid "stepping into Orbitz", download my Free White Paper. You will think differently about your business, and your customers will be grateful.  DOWNLOAD