Is This Simply Behavioural Economics or is Trust the Issue, or Both?

SHARE THIS POST :
I am fascinated by how Predictably Irrational we are! And despite my awareness of it and keen eye to detect it, there are still times I catch myself falling into illogical reasoning.  When I first read about Spirit Airlines charging $5 to print passengers boarding passes for nonstop flights in the New York Times, I immediately thought “this is criminal!”, one commenter remarked “what’s next toilet paper?”.  As I read on, the article explained that Spirit had lowered their fare for nonstop flights by $5, essentially enabling customers to save $5 if they choose to print their own boarding pass.   Given this context it is a win for customers but the problem is that people will forget quickly that the price was lowered and pay much more notice to the emotional response of being charged for something that used to be free.

But I don’t think this is all about our irrational predictability, we have also been conditioned to distrust the airline industry.  In many cases we have seen fees added for things like baggage, snacks, and seat selection without a reduction in the fare.  With the exception of a few airlines that put customer experience at front and center stage (ie. Porter Airlines), the industry broadly is failing miserably at customer centricity and as a result we assume the worst every time a change like this is made.

Logically we should be giving Spirit Airlines big props, but instead they are receiving very mixed reviews. My friend Ben Watson, Principle of Customer Experience Strategist with Adobe, made a simple suggestion that I believe would have had much better results; in the booking process provide the option to “Print your boarding pass for FREE” reducing the price by $5.

Prior to this NYT article I had not heard of Spirit Airlines so I checked their site out and their prices are remarkable, but when I googled “Spirit Airlines sucks” there are a tons of people that have gone to great lengths to describe their dislike for the Spirit customer experience.

Bottom line: With regards to pricing strategies, smart companies are fluent in understanding the behavioural economics behind our irrationality and simultaneously earning trust from their customers through their customer experience.

SHARE THIS POST :

One thought on “Is This Simply Behavioural Economics or is Trust the Issue, or Both?”

  1. very interesting thread

Leave a Reply

Your email address will not be published.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