Wednesday, June 6, 2007

The price is wrong.

There are a few industries in the U.S. that, at least for some time, seem to be losing customers, bleeding money or flirting with Chapter 11. Let me pick on a couple of my favorites. The airlines, wireless providers and American automakers.

One thing I think planes, phones and automobile marketers have in common is this: they all rely heavily on price-promotions to drive their sales. In other words, they spend a good deal of money saying, "we're a commodity and it's all about price." That's bad. But what makes it worse is the prices they advertise are--way more often than not--bald-faced lies. You can never really get a flight to Miami for $99 or a cellphone for $49 a month or a car for anything close to the MSRP. So you dick around with the company, on the phone or in person or on the Web.

A smart client once said to me, "you never start a relationship with a negotiation." But that's exactly what these marketers force you to do. So they wind up having lousy relationships with their customers and then they plow money into customer relationship management programs that can, in real life, do little to fix the psychic damage already done.

You want proof? Try naming an airline, a wireless provider or an American car company you actually like.

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