Marketing tip #38: Beware of unintended consequences

87637195As business owners, we often make decisions that at first blush serve the business well.  But, as things roll out, there are consequences that we didn't anticipate and don't want.

The airlines are living this out as we speak.  A while ago, to boost themselves out of the red, most major airlines instituted bag fees.  A passenger must now pay an additional $25-$35 per checked piece of luggage.

I'm sure that when the airline executives came up with this plan — they were elated.  I can envision the equation on a big white board somewhere.  X million bags times $25 = a TON of money.

But what they didn't think through was the consumer's reaction.  At the same time they were trying to boost their bottom line, so were traveling families and business people.  So rather than pay the $25 fee, people simply ignored the carry on bag size regulations and more and more people bypassed the checked luggage option.

The baggage fee has generated income ($2.2 billion for the industry combined in 2009) but it has also created these headaches:

  • Longer lines in security as people take more through the check point (and have no idea how to manage it all)
  • A jam up in plane boarding (everyone wants to get on early in hopes of snagging some overhead bin space)
  • Adding significant staff time in gate checking many, many more bags
  • Disgruntled customers who are now being forced to gate check bags with computers and other valuables that they thought they could carry on
  • More broken overhead bins due to people shoving bags that are too large into them
  • Delayed flights because people board with bags that won't fit — and have to swim upstream to the front of the plane to do a late gate check
  • Increased dissatisfaction ratings from frustrated fliers

Maybe the money is worth it… but imagine the brand position some airline could take by renouncing fees and putting some of the convenience and comfort back into flying.

Bigger picture for us — we need to think past the first blush advantages.  Ask yourself these questions before you make a major shift in how you do business:

  • How might our customers act differently, based on this change?  What are the consequences to those shifts?
  • How might this change the way we are perceived by our customers?  By our employees?
  • What hidden costs come along with this decision?

What do you think — if they would be candid, would airline executives tell you that baggage fees are worth the extra hassle, staffing, and customer dissatisfaction?

 

 

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5 comments on “Marketing tip #38: Beware of unintended consequences

  1. remi online says:

    i really don’t agree with the $25 fee just for checking some luggage..

  2. Jill says:

    Drew, what do you think are the long term implications of strategies like this with respect to a companies bottom line? I really think their long term hope/ploy is to have the public at large become de-sensitized to this type of nickel and dime pricing tactics….like most things once we have been subjected to it for a number of years it is likely it will never go away. I enjoy following your blog…keep up the excellent writing!

  3. Andy Nattan says:

    You’re right, and it’s a shame people seem to operate on “A + B = MONEY!” without wondering what C or D will cause.

  4. Jill,

    I’m sure you’re right — they want us to just accept it and pretty soon, it’s the new normal. But the bigger issue to me is all the hassles, delays and customer frustrations that their bag policy creates.

    That’s the real cost, in my opinion.

    Drew

  5. Andy,

    Exactly — it’s as though they got blinded by the $ signs and forgot to think through how the consumer would change their behavior based on the new cost.

    Drew

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