This is something on which I have posted before. I think it was an idea I got first from someone else. Easy Jet has helped transform the consumer market place for air travel. Its approach has brought flying within reach of millions more people and it has forced other airlines to be more competitive. As the internet makes price comparisons ever easier, any consumer sector that is charging more than it needs to for its basic services faces the threat of a cheaper entrant stealing a major market share. This is the good news. The bad is this: no frills, low margin models encourage businesses to explore other ways of making money from their customers. This is where all the hidden extras come in.
Every customer is seen as someone who can and should be pushed into paying for additional things above the basic offer. This is fine when we are talking about add-on luxuries that people choose to buy. The problem comes when the goal is to exploit customers’ vulnerability to make a fast buck.
I had an example of this on Saturday when I rented a van. As I only had my plastic European driver’s licence and not the full paper version, the company said they had to ring DVLA to check my details. The phone was on speaker, so when we got through I could hear a recorded message saying that the call cost 49 pence per minute on land lines. When the ‘phone was answered the call lasted about 90 seconds. But the charge made to me for the call was £6.49.
I hear every day similar experiences of trapped customers being fleeced when they need some assistance or make a mistake (like going slightly overdrawn for a few days). Another example is the incredible pressure put on people buying electrical goods to buy overpriced extended warranties. In the end this is simply shifting profit from one activity – the basic service – to another – the add-ons and hidden charges. If you are a canny consumer you can probably avoid most of these ways to make you pay above the minimum. But isn’t the overall effect on society malign?
I didn’t get angry with the car hire man on Saturday; what was the point? But I felt resentful and he probably gets lost of aggro from people wondering why they have to pay a mark up of 600% plus on a one minute phone call. So, instead of the relationship between vendor and customer being one which is flexible and friendly and where the idea of ‘service’ means something, instead it is brittle and hostile. I guess this is just the way of the world. And I don’t suppose anyone wants to abandon the benefits of competitive markets, but something is lost in society when those who work in the service sector are encouraged to see customers not as people to please and help but as potential suckers to be exploited.