Pricing Complaints - How to Respond | Strategic Pricing Solutions

If customers complain about your pricing, should you do something? A few things have occurred recently that have prompted me to write this post. In early March a bill was introduced in the Senate, Forbidding Airlines from Imposing Ridiculous Fees (FAIR) Act. A few days later I overheard two guys in the gym complaining about being charged for paper statements on their brokerage accounts. And a week after that, my personal dealings with Verizon for TV and internet felt like playing a game of Hunt the Wumpus. (Due to space, I will write more about this in a future post.) The issues are slightly different, but all are related to customers complaining about pricing strategies. Complaints about differentiated prices for differentiated service are natural and should not cause changes in your pricing structures. On the other hand, if your pricing is deceptive rather than aligned with different value profiles, you should fix it.

Senators Ed Markey (Dem., MA) and Richard Blumenthal (Ind., CT) have decided that separate fees for checking bags, changing or canceling a flight, and selecting better seats are somehow unfair and should be limited or prohibited; and that led them to introduce the FAIR Act. Certainly some customers have complained about those fees, which lends support to the senators’ view. However neither the complaining customers nor the senators are recognizing the benefit of those add-on fees. Customers are not all the same. They have different budgets, different needs on planes, and different abilities to plan their schedules. The airlines have appropriately recognized these different customer segments and created offers that can appeal to each. By differentiating prices, the airlines can offer the lowest fares to those who:

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Pricing Complaints - How to Respond.