Bad Profits

I recently stayed in a very upscale hotel in Phoenix.  Why is it the more expensive the hotel, the less value you receive?

My room had a wet bar that was stocked with candy, beer, and soda.  I noticed that if I drank the bottle of Diet Pepsi I wanted, the hotel would be happy to charge $2.95.  I’m sure you would agree that seems a little pricey!

I figured that there must be a vending machine somewhere in the hotel, so I headed to the front desk to ask.  When I asked desk clerk where I could find a pop machine he replied “Your wet bar is stocked with soda.”  I told him that I was aware of that, but still wanted to know if they have a vending machine.  He informed me that the hotel had one machine on the 5th floor. 

It was definitely worth my elevator ride because a bottle of Diet Pepsi was only $1.50 from the vending machine.  In other words, by riding the elevator I was able to save about 50%.

That kind of made me mad.  The impression that I had of the hotel was that they are trying to rip me off.  I can’t trust this place.

The extra $1.45 that I would have paid from the wet bar is a bad profit.  As Fred Reichheld says in his book “The Ultimate Question,” there are good profits and bad profits. 

Bad profits occur whenever a customer feels misled, mistreated, ignored, or coerced.

Other examples of bad profits include:
* The baggage fee assessed by airlines that was implemented last summer to offset the high fuel costs, which have now dropped substantially.
* The Internet fee higher end hotels charge.  These fees are especially frustrating because most average priced hotels provide free Internet service.
* The complicated bills I get from my cell phone provider.  I always feel like they’re trying to slip something past me.

I’m sure you can think of many more examples of times you have felt misled or mistreated.

On my way home from Phoenix I had a two hour layover in Denver.  I was pleasantly surprised when I realized that not only does the Denver International Airport offer Internet service, they actually provide workstations with electricity and comfortable desk chairs for FREE!  That was truly unexpected joy.

Think about how you treat your customers.  Are there some fees that your organization charges that could be interpreted as less than fair?  If so, eliminate them. 

Rob Bell

Leave a Reply

Your email address will not be published. Required fields are marked *

Post comment