The New York Times reported about complaints after customers of Amazon’s Prime program learned the company is raising the annual fee for the two-day shipping service by 25 percent. For us, the situation reminded us of at least six lessons most companies should consider when facing similar scenarios.
- For public companies, be sensitive to how your Main Street customers view your Wall Street supporters. Raising prices may raise your stock amid rising revenues around the corner, but many everyday, loyal customers see little value paying more in order to line the pockets of what are often perceived as Wall Street fat cats. Your goal is to make money, but brand enthusiasts are more interested in quality service and don’t expect you to reward their long-term loyalty with price increases.
- Address complaints on social media and discussion boards with genuine, individualized, professional and sympathetic responses. Upset customers may hammer you, but most people respect those who, at a minimum, attempt to answer their critics. Engaging may actually change opinions. Doing nothing allows critics to control the storyline and shed light on one side of the story. And if you respond, don’t assign a robot who spits out the same line time after time. That will infuriate people even more.
- When raising fees, ensure customers currently see the service as excellent and worth paying extra for. If customers publicly question aspects of the service, you’ll face a darn time trying to persuade them it’s time to graduate to a higher price.
- Be transparent about the reasons for higher fees. Skeptics will automatically assume you’re not sharing the real reasons. They’ll assume the marketing department is sending out a strategic smoke screen to cover someone’s desire to simply pile up more cash. Detail your logic and remember if you choose to twist the truth, most people aren’t buying it no matter what the office brown-nosers tell you. And be careful about large, company purchases. I’ve listened to companies explain the need to cut costs while at the same time engaging in what appeared as unnecessary spending. People aren’t that dumb. They can connect the dots.
- If the media care about your price increase, talk to them. Anticipate beforehand their calls and emails. Declining to comment, fair or not, implies to much of the public you’re afraid to hold an honest discussion about the issue. If you feel justified raising prices and it makes sense to logical people, there’s no reason to not share your views with reporters.
- One option is to ignore all of the above and play the role of a boat captain who believes riding the rough waves will soon lead to smooth sailing. This is a risky course to chart, but some companies who appear to haphazardly handle customer relations still make more and more money. This is similar to the superstar actor who casually dismisses his fans, who still adore him despite the disrespectful antics. But consider this caveat: You may make more money, but did you lose your longterm reputation in the meantime?