Last month I wrote a post Dealing with Customer Complaints in which I mentioned some personal dealings with Verizon that were unsatisfactory. In the post I wrote that it felt like playing Hunt the Wumpus. I also refer to it as a Where’s Waldo pricing strategy. I know Waldo is in there, in the form of something I won’t like, and I just have to find him. Unfortunately, if that is your reputation for pricing, you are going to have unhappy customers.
With Where’s Waldo Pricing, the reality of value you receive for the price you pay does not match perception. With Verizon, the misdirection happened multiple times. First I received a flyer in the mail offering an increase to 75 mbs download speeds from my current 50 mbs for a $10 per month increase. I had received those offers in the past and each time I called, that speed was not actually available at my house, however this time they said it was. When I told the sales rep I wanted to upgrade, he was happy to help. However, when he quoted me the new monthly rate, it was more than a $20 increase above my current rate. When I responded it should only be a $10 increase, he told me he was giving me their best price. After I protested and reiterated the flyer I received, he said he would be able to enter a credit so the price matched the flyer.
The agent then made another offer. He said if I would do an early 2-year renewal of my Extreme HD channel lineup, I would get Showtime for free. Now that I would have a faster internet speed, I was willing to stay for two years so I agreed. Once again, when he gave me the new totals for TV, it was a $20 increase. When I asked what happened to free, he mentioned fees for premium channels. I told him if he was charging me more for those, then Showtime was not really free. I declined the offer.
The last search for Waldo related to installation. Although there was no charge for the installation of the new box to accommodate the higher internet speeds, my new package would now be $10 per month more. The sales rep told me there would be a pro-rata charge on my next bill for part of this billing cycle, and when he gave me the new total it was $50 higher than my previous bill. I pointed out that since pro-rata means proportional, it should never be more than the entire $10 increase. To his credit, after more discussion he agreed to credit the pro-rata charge back to me.
The point of all this is that I found it hard to trust Verizon. I had to look for the tricks in their pricing. I have defended many companies, including airlines, utilities, and banks for multi-part pricing. I believe they are smart to identify areas of service and charge higher prices where some segments of customers place a higher value and will pay more. But they tell their customers what each of those higher priced options are, and there are no hidden Waldos. Some customers may not like paying for certain services, but there are no tricks and they can decide which services they want. Their customers know what they will be paying before deciding to buy, and they only pay for what they want.
On the other hand, whenever a company uses hidden fees to charge more than the advertised amounts they lose their customers’ trust. And when you lose the trust of your customers, those customers become unhappy and are then candidates to go to your competitors. You can avoid that by avoiding a Where’s Waldo pricing strategy.
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