Article Summary: Companies and Customers Who Hate Them
Article Summary:
Companies And The Customers Who Hate Them
How can customer dissatisfaction lead to higher profits for the company? Companies have found out that ill-informed customers can be beneficial for them in terms of profits. Some companies have abused their customers intentionally, however others unwittingly exploited and took advantage of them.
The Slippery slope: There are two major ways in which companies make profits by misleading their customers: * Offering the customers a broad variety of services or products, which can be very confusing, especially when there is lack of transparency. Moreover, if even the information is complete for the customers, the companies can take advantages of consumers’ difficulties in predicting their needs. * Using fees and penalties for offsetting costs and discouraging undesirable customer behavior.
These hostile strategies are common from banking and hotel industries to video stores and car rentals. Here particularly 3 industries will be discussed in details: cell phone industry, retail- banking industry and health club industry.
Cell phone industry: When a customer signs up for a service plan, he chooses a certain pricing option with different ranges of minutes. These plans can have various restrictions and allowances. However, these varied plans are not a result of customer-centric strategy. They are rather ways to take advantage of customer’s unawareness of which plan to choose, in the result of which customers can be penalized either for using too much time or for not using enough. However, such strategies cannot always guarantee profits for the company. They can increase the dissatisfaction among customers, the proof of which can be thousands of complaints that the U.S. Federal Communications Commission gets annually. These complaints should be worrisome to companies because customers can switch toward a transparent and friendly alternative.
Retail-banking industry: Another sphere in which
Companies And The Customers Who Hate Them
How can customer dissatisfaction lead to higher profits for the company? Companies have found out that ill-informed customers can be beneficial for them in terms of profits. Some companies have abused their customers intentionally, however others unwittingly exploited and took advantage of them.
The Slippery slope: There are two major ways in which companies make profits by misleading their customers: * Offering the customers a broad variety of services or products, which can be very confusing, especially when there is lack of transparency. Moreover, if even the information is complete for the customers, the companies can take advantages of consumers’ difficulties in predicting their needs. * Using fees and penalties for offsetting costs and discouraging undesirable customer behavior.
These hostile strategies are common from banking and hotel industries to video stores and car rentals. Here particularly 3 industries will be discussed in details: cell phone industry, retail- banking industry and health club industry.
Cell phone industry: When a customer signs up for a service plan, he chooses a certain pricing option with different ranges of minutes. These plans can have various restrictions and allowances. However, these varied plans are not a result of customer-centric strategy. They are rather ways to take advantage of customer’s unawareness of which plan to choose, in the result of which customers can be penalized either for using too much time or for not using enough. However, such strategies cannot always guarantee profits for the company. They can increase the dissatisfaction among customers, the proof of which can be thousands of complaints that the U.S. Federal Communications Commission gets annually. These complaints should be worrisome to companies because customers can switch toward a transparent and friendly alternative.
Retail-banking industry: Another sphere in which