Nickel and Diming Customers Backfires

As we all know, the customer experience is made up of hundreds of little touchpoints with a company, its products and its partners. But not all touchpoints are equally important in deciding whether the experience is a good one. One critical touchpoint is how, how often and when you pay for the product. Badly designed payments touchpoints can all too easily lead to unwarranted pain, an unsatisfactory experience and customer defection.

As Sampson Lee reminded us in a recent post, 'pain' is a difficult concept for experience designers. Recent research in neuroscience tells us that customers prefer to pay in small increments, preferably later and through mechanisms like credit cards where cash doesn't actually exchange hands. But this doesn't mean that a constant stream of small non-cash payments won't accumulate into payment pain, particularly when the customer thinks they are unfair. Or worse, that they have already paid for the product.

Princess Cruises is currently under fire for 'nickel and diming' customers in this way on its cruises. Customers pay thousands of dollars for all inclusive cruises, which as the name suggests, includes practically everything you could ever want onboard a cruise. Recently, it has started to charge customers a dollar here for coffee, one dollar seventy five there for ice cream and so on for lots of things, things that customers thought were already included in the price. And that were included in the last cruise they took. And the one before that.

On a long cruise this can easily add up to 50 dollars or more. You wouldn't have thought a few additional charges on a cruise costing thousands of dollars would cause so much outrage. Apparently it has. And it has generated a lot of bad press too. Princess Cruises is in real danger of loosing loyal customers whose travel budget might extend into the tens of thousands of dollars each year. All for the sake of "nickel and diming" customers out of a few dollars of chump change. All because they completely failed to understand the psychology of paying.

What do you think? Is Princess Cruises inflicting death by a thousand small charges on itself? Or shouldn't rich customers complain in these inflationary times?

Tip of the hat to the Neuromarketing Blog.

Post a comment and get the conversation going.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

Further Reading:

Neuromarketing blog on Princess Puts Pain into Cruising
http://www.neurosciencemarketing.com/blog/

Neuromarketing blog on The Pain of Buying
http://www.neurosciencemarketing.com/blog/articles/the-pain-of-buying.htm