Pricing matters when it comes to your customers' experiences and loyalty! You are not quite sure? Let's do a short quiz:
Have you ever:
- Left a rental car counter flabbergasted by the final price?
- Given up on finding a new mobile phone plan when the sheer number of options obscured the best choice?
- Checked your latest bank statement only to find an unexpected new fee?
- Squeezed into a middle airplane seat because the alternative meant shelling out $20 for a preferred seat assignment?
If you answered “yes” to just one of these questions, you’re one of the lucky few. Things like that happen to people all the time! And if they’re at all like me, they will think: “Wow, this was unacceptable.” Then they’ll tell their friends about it. And they’ll stop doing business with the company that nickel-and-dimed them.
You might wonder what this has to do with pricing. All the examples above result from companies’ pricing decisions! Don’t think of pricing only as deciding what shows up on a price tag — it’s much more. Think of the various fees banks charge and the discounts and promotions retailers work with. Take the different price models that mobile providers offer for different customer groups. Remember the bundle of burger-fries-soft-drink that fast food restaurants offer to get us to buy all three. And don’t forget how cable companies put the channels you really want in different packages so you need to buy them all.
Pricing affects the customer experience a great deal! In my report "Pricing Matters For Customer Experience Professionals," I show that it sets customers’ expectations for the experience — high price, high expectations, and vice versa. And it influences how customers perceive their experiences: Are they happy or frustrated? Do they feel treated fairly or ripped off? The effects on a company can be devastating! Remember the debit card fee debacle of Bank of America that became extremely public last year? As a result, studies said, credit unions got 650,000 new customers in the month of September 2011 only. As a comparison: In the whole year 2010, credit unions got a total of 600,000 new customers!
But even though most companies name customer experience as a strategic priority, they end up making pricing decisions that lead to negative customer experiences. Why? Pricing decisions are often made without the benefit of customer experience insights. And they are made in organizational silos, but customer journeys cross silos.
This is where customer experience professionals come in. They need to help improve price experiences if they want to improve the customer experience. And the very first step is to bring customers’ pricing issues to the attention of pricing decision-makers!
Voice of the customer (VoC) programs would be ideal because they are meant to provide insight into customers' expectations and perceptions. But our research shows that most VoC programs:
- Don't methodically track and monitor pricing feedback.
- Don't capture the full range of different pricing elements customers can run into.
- Don't know what drives customers' satisfaction with pricing.
Customer experience professionals can only provide the right quality and quantity of customer pricing feedback if they do two things. First, combine structured and unstructured feedback and add qualitative research. Second, use this mix of methods to find out where their customers may run into pricing issues, how they feel about those, and how that affects customer loyalty.
Read more on how to do this in my new Forrester report "How CX Professionals Can Use VoC To Surface Pricing Issues." This report is also featured in the CRM magazine: "Customers Tie Price To Satisfaction, Why Don't Companies?"