Comments on: The complicit customer http://buhlerworks.com/wordpress/2008/08/06/the-complicit-customer/ Insights for Travel, Tourism & Destination Marketers Wed, 20 Jul 2011 07:17:00 +0000 hourly 1 http://wordpress.org/?v=3.3 By: JEB http://buhlerworks.com/wordpress/2008/08/06/the-complicit-customer/comment-page-1/#comment-247 JEB Thu, 07 Aug 2008 13:23:38 +0000 http://buhlerworks.com/wordpress/2008/08/06/the-complicit-customer/#comment-247 Your points are valid, David, as they describe the difficulty of product differentiation at the actual experience level. The issue is not so much that passengers in different seats pay a different price and should be treated differently for that. It's hardly possible and everyone knows - or should know - that if you pay for business class or a superior room / suite you then get a different experience. The issue is more about the fact that in today's market, where everyone is looking for the cheapest price - myself included! - the economics don't work for the provider. That in itself would be fine if people realized - as I do - that the first class experience can't be provided at economy pricing. If more people were willing to pay a higher price the economics would change. It would also mean fewer full flights but with higher revenue per seat/flight. A recent article about the "good old days" of flying made that point. The overall experience was more pleasant because fewer people were flying as the prices were high. It's highly unlikely those days will ever return and we'll be stuck more or less where we are and pay for our pillows, blankets, peanuts and checked bag......! Your points are valid, David, as they describe the difficulty of product differentiation at the actual experience level. The issue is not so much that passengers in different seats pay a different price and should be treated differently for that. It’s hardly possible and everyone knows – or should know – that if you pay for business class or a superior room / suite you then get a different experience.

The issue is more about the fact that in today’s market, where everyone is looking for the cheapest price – myself included! – the economics don’t work for the provider. That in itself would be fine if people realized – as I do – that the first class experience can’t be provided at economy pricing. If more people were willing to pay a higher price the economics would change. It would also mean fewer full flights but with higher revenue per seat/flight.

A recent article about the “good old days” of flying made that point. The overall experience was more pleasant because fewer people were flying as the prices were high.
It’s highly unlikely those days will ever return and we’ll be stuck more or less where we are and pay for our pillows, blankets, peanuts and checked bag……!

]]> By: David http://buhlerworks.com/wordpress/2008/08/06/the-complicit-customer/comment-page-1/#comment-246 David Thu, 07 Aug 2008 08:48:30 +0000 http://buhlerworks.com/wordpress/2008/08/06/the-complicit-customer/#comment-246 Fair point in a way Joe, but in the airline case there is also a structural problem in how the service is provided. They can't make a flight on time for those who paid more and late for those who paid less; the cabin crew can't tell if the person in 18a paid a different fare from the person in 18b. The MEANS are them for to know, in principal, but imagine the practicalities! Should they be nice to 18a because they paid $20 more and spill coffee on 18b? They can't squeeze some seats EVEN closer to the one in front, just because you paid less. Similarly for a hotel - they can't make the room smaller, although perhaps they could change the sheets every other day - IF that were made plain at time of booking. The structural problem is that the "service increments" are at a much grosser level than the "fare increments" - and some service elements apply equally no matter what you paid. In any event, simply managing varying "service increments" might cost more than not bothering? Not sure how these issues can ever be fixed. PS- thanks for correcting my dates for the Great Depression! Motto - always re-read carefully before hitting "post"! Fair point in a way Joe, but in the airline case there is also a structural problem in how the service is provided. They can’t make a flight on time for those who paid more and late for those who paid less; the cabin crew can’t tell if the person in 18a paid a different fare from the person in 18b. The MEANS are them for to know, in principal, but imagine the practicalities! Should they be nice to 18a because they paid $20 more and spill coffee on 18b? They can’t squeeze some seats EVEN closer to the one in front, just because you paid less.
Similarly for a hotel – they can’t make the room smaller, although perhaps they could change the sheets every other day – IF that were made plain at time of booking.
The structural problem is that the “service increments” are at a much grosser level than the “fare increments” – and some service elements apply equally no matter what you paid. In any event, simply managing varying “service increments” might cost more than not bothering? Not sure how these issues can ever be fixed.

PS- thanks for correcting my dates for the Great Depression! Motto – always re-read carefully before hitting “post”!

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