Why do businesses screw their best cutomers ?

Discussion in 'CitiBank Rewards Program' started by ronone69, Nov 5, 2005.

  1. ronone69

    ronone69 Intern

    Dec 12, 2004
    77
    2
    Melbourne
    Let me explain.
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    QF
    I am a Qantas Platinum FF. Call to book a domestic flight they now want to charge me a "booking fee". If I book on the web there is no fee BUT the QF website won't even let me book a simple ticket like MEL->SYD->BRI->MEL. I need to book 3 separate tickets. Surely maintaining 3 bookings the QF system must be 3 times more expensive than if I made a single booking over the phone ?

    I booked on the web - their problem - but why are they trying to screw me ?

    Next, they increase the points I need for F and J travel by 40% and charge me to call up and make points bookings when again I cannot make the bookings on the web. So why are they trying to screw me ?


    CBA
    Offer me a Platinum Credit Card and after I sign up cut the points I can earn. Why are they trying to screw me ?

    ANZ
    Totally screwed up their the points I could earn. Have been an ANZ customer for years. Simply cancelled my card. Why did they want to screw me ?

    I am getting a very sore ass. Can anyone answer my question. Why do businesses screw their best customers ?
     
  2. robertz

    robertz Member

    Sep 15, 2005
    134
    2
    Atlanta, GA, US
    I hear ya ronone69

    My biggest screw was CBA. Being OS, didnt know they changed their normal cards from 1:1 to 2:1 QFF points. Bastards retro back the 80,000 points to 40,000 points. At the same time QF increased there award prices.
    I went from a return flight to/from the US, to not even having enough for a 1 way award, overnight. Absolutely ass raped....

    I put it down to the 'Ceiling Effect'. The ability for business to push the ceiling up and see if the customers take it. If they do, then this is the new standard. Problem is it keeps going and going until the customers stand up and withdraw there support for that business. (Problem here is other business see what's going on and move it as well)

    So to answer your question, your not the only one with a sore ass. We all have one.
    Why do they do it? Easy answer. To make more money!!!.

    Robert
     
  3. PaulZ

    PaulZ Member

    Jan 11, 2005
    215
    0
    With your points value being cut in half - my brother had the same problem.

    Simply pay your gold or silver annual fee, 3 months later, upgrade to the Platinum Card - they shouldn't charge you the increased annual fee till your next anniversary. When you are platinum, you can transfer all your points to QF at 1:1. Then once you have done that, you can go back to Silver/Gold/Cancel all together, and it cost you no extra money, but doubled your points value!! :p CBA Suckers!!
     
  4. AndersB

    AndersB Newbie

    Sep 8, 2005
    9
    0
    Please allow me to philosophically navel-gaze for a post:

    My theory is that since the pre-historic mid 1980s, the markets have changed dramatically because of the information-age. I think the main driver is the increased speed of information transfer and cheap, easy ubiquitous access thereof. Improvements in telecommunication and ultimately the internet has facilitated this.

    So faster information drives faster change. Shorter product development cycles and shorter economic shelf life for the products as well. Entry barriers to markets are continually lowered and competition increases. Legacy production facilities and intellectual property has shorter life spans.

    So capital moves around faster as there are economic opportunites to move within markets and geographic locations. Labour markets follow capital and produces social effects of people moving around much more and are less rooted in local communities. I think that is why virtual communities like this one are thriving so much.

    OK, we now have markets with much more savvy consumers armed to their teeth with the latest info of best deals and possible loopholes that can be exploited. It is also a restless bunch with less loyalty to any brand. Just like we see here in this board, if there are better deals somewhere else - we tend to take our business there at the drop of a hat. There is a commoditisation of markets that traditionally allowed easier product differentiation. When quantitative comparisons are made easily - there is a downward pressure on price.

    Captains of corporations may determine that the concept of loyalty is dead - all that matters is economic advantage. That is how consumers buy and that is what drives business. Businesses that abuse consumer trust (linked to loyalty) deservedly get the "chase the 1 cent better deal" crowd. But this only re-affirms their belief in how consumers operate and so it goes on.

    I'm probably in an old-fashioned minority that think that it does not have to be this way. Loyalty is in my opinion an emotional issue to a great extent - not an economic contract. Companies that can connect emotionally with their customers (and this includes earned trust) can enjoy loyal business.

    Unfortunately all we get is marketing "lifestyle" spin and experiences of businesses screwing us as much as they can get away with. Consumer tastes and buying patterns vary with time. Hopefully the "Chainsaw Al Dunlap" style of running businesses will die its anachronistic death it deserves.

    Maybe a new generation of visionary CEOs will rediscover the fundamentals of a stable business: long-term good relationships with their customers. With competition making quantitative product differentiation very difficult, there is only the qualitative relationship differentiation left to play with.
     
  5. ronone69

    ronone69 Intern

    Dec 12, 2004
    77
    2
    Melbourne
    AndersB

    I also studied economics and the trends of the past 15 years and I agree with your comments.

    I look at it slightly differently however. Most businesses do little to encourage loyalty and that is why customers are not loyal. When businesses continually screw their customers they don't deserve loyalty.

    I run a small business. I always ensure that my existing clients do not loose anything when we change things. The opposite - we try to give them more for their money. Only once in 15 years have we been unable to do this. As a result, many of our clients have been with us for over 10 years and many of the people who were in our first 100 clients are still our clients today. That's the long term value of a customer - something Qantas, CBA, ANZ, etc, etc simply do not understand. And that is why they need to spend so much time marketing - because they don't have long term satisfied customers to spread the word and they don't know the golden rules of customer service : The customer is king, Long live the customer and The customer is always right. And because of poor management from top to bottom, poor training and often poor staff, they will always be looking for the next customer rather than investing in the ones they've got.
     
  6. N860CR

    N860CR Established Member

    Nov 30, 2004
    3,061
    651
    Brisbane & Sydney
    I think Qantas, particually recently, have adjusted their policies to be even less customer friendly simply due to the fact that the customer has so little choice in this country. In pre-2001 when Ansett were still around, Qantas had a full-fare competitor. They had to offer levels of service and a frequent flyer program that was competitive against the AN product. Post-2001, suddenly there is no domestic competition on the same level.

    With no DJ frequent flyer program QF saw it was able to drastically change theirs simply because the customer has (realistically) no choice. An international traveller (who frequents the same destination) has the option to use another airline, however generally most customers were left with the choice of accepting poorer rewards, or taking nil rewards when flying Virgin.

    Then comes Jetstar. The basic idea is good, QF couldn't afford to continue offering full service at fares that are competitive with the DJ product, so they launch JQ. However, they go too far with the discount domestic product receiving a very poor reception from the travelling public, but how do they keep it going? Easy - force QF customers onto JQ flights. Those in Tasmania or holiday Queensland will be able to tell of the deterioration in their domestic product, many airports no longer linked to Sydney or Melbourne with QF.

    So what have I been ranting about :p Well at the end of the day it's all to save the flying kangeroo money. They know there's not really much their customers can do, so why bother doing the right thing by them. Money... it's always about money, not the people :cry:
     
  7. BlacKnox

    BlacKnox Active Member

    Jan 29, 2005
    732
    13
    Why do businesses screw their best cutomers?

    I don't know. I was fortunate to have had (and survived) a restaurant/ bar in Japan 2 years ago. I only had two rules to staff:

    1. Always be on time
    2. Never screw the customers :!:
     
  8. NM

    NM
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    Aug 27, 2004
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    This one is easy. If you have three separate bookings, and need to cancel the trip, they get to charge you 3 x cancellation/change fee rather than 1 cancellation/change fee if it was on a single ticket. So why do you think there is an incentive for you to make 3 separate bookings and have them issued as 3 different e-tickets?
     
  9. dajop

    dajop Senior Member

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    Not all business screw their best customers, but some do. Qantas on the other hand, seems to have the balance about right (given the "loyalty" monopoly they have - after all does Virgin reward their top customers for being loyal?). They obviously are willing to let a few customers go, lest their costs get too high, but seem to have enough in there for most customers to stay loyal. Although they do put a lot of effort into "spin"!

    Another anecdote comes from hotels. A couple of years ago Hilton gave me HHonors gold status, which comes with some benefits, such as free breakfasts, bonus point, common upgrades, and occasional gifts of chocolate or wines. But more importantly, they always award Hhonors Points & Airline Miles - and if they don't come through, a quick email to the Sydney service centre gets them credited. Net result - I choose to stay at a Hilton Family property whereever I can (shame there aren't more in Australia, even of the Garden Inn or Hampton variety).

    Now take Intercontinental Hotel Groups and their (lack of) "Priority Club". A complete joke, I often have to fight tooth and nail over months to get points credited, and often are told that the rate I booked is not eligible for points - which is never listed transparently when making the booking. Net result - I avoid ICH group properties wherever I can. So being loyal to customers does make a difference. I guess it depends on how strong the competition is, and whether or not the grass is greener on the other side.
     
  10. ronone69

    ronone69 Intern

    Dec 12, 2004
    77
    2
    Melbourne
    Read with interests people comments to this post.

    Let me reply to a couple:

    Robert:
    CBA advertise their 24 hour call centres as they think this is great. Problem is half the people in the call centres don't have a clue and in any case ALL CBA customers are paying for it though new fees (like the $0.50 I get changed every time I make a credit card payment on Netbank). The point change was promoted with a well worded letter about how they are improving their credit card program!!!

    AndersB
    You suggest loyalty is dead - I don't agree. I think the problem is most businesses don;t act in a way to earn customer loyalty and as a result they don't get it. If businesses focused on keeping their customers rather than screwing them, they would generate loyalty.

    Danielribo:
    You basically are saying business screw their customers because they can!! You are probably right, This is certainly appear to be the way Qantas operates. It will bite them in foot. Lets wait until someone else sets up a domestic airline in and provides real service (Virgin doesn't provide ANY service - that's why I find it amusing how they advertise great service - is pushing a trolley up and down a aircraft changing for sandwiches and water providing great service ?)

    BlacKnox
    I think screwing the customer may have had another meaning in your bar in Japan!!!

    NM
    I fly business so I get a full refund anyway but I can understand how that may affect other people. But its also more work for Qantas. I think it is just customer unfocused systems


    Dajop
    Don't agree with you about Qantas. Every time they change their FF program - 3 times in about 7 years - they have screwed their most loyal customers. Never fly Virgin - because they really do not have a clue what creating customer loyalty is all about - all they are about is price.

    I am also a Priority Club members. Don't use it much. I find Starwood (Sheraton/Westin) a very good program. Often however it depends on the individual hotel - if they know you they treat you well.

    Must add a little story about Hyatt. I am a Gold Passport member and often stay in their executive clubs. Couple of years ago I booked rooms at the Hyatt Regency Kowloon in HK. Arrived at 9.00pm on New Years Eve only to be told my children, who were 15,12 and 9 at the time, were not allowed into the Regency Club so they would have to downgrade my rooms. I had a very heated discussion with the manager (female) who would not even come down from her party upstairs in the hotel to talk to me face to face. We ended up leaving the hotel and moved to the Grand Hyatt in Wanchai instead. My kids were allowed in the Grand Club, the service in the Grand Hyatt HK is generally good and they certainly apologised (over and over again) for the other hotel. Wrote to Hyatt on my return and eventually received a reply advising me the Hyatt Regency manager was wrong and what she had done was against Hyatt policy - and with of course, another apology, and advice they intended to review all the hotels in the Asia region as many had placed restrictions on club access that were outside Hyatt policy. I am still waiting for the thank you gift. Needless to say I stay less at Hyatt's these days and would never stay at the Hyatt Regency in Kowloon. Hyatt had the chance to win my loyalty forever - they missed the chance.............
     
  11. Platy

    Platy Guest

    Yes QF has the balance right....for QF!!! Not the customer!!!

    It is certainly the case that standards have declined since the lack of competition, notably in J class domestic.

    And yes, I do believe that it is a case of screw the customer until the loss of business is such that you reverse the decline in service (as the case with some banks re-opening rural branches and addressing runaway fee structures).

    Or until competition returns to the marketplace.

    It is axiomatic in sales & marketing that it takes several times (5x if oft quoted) more investment to win over a customer than to keep one, hence the importance of loyal customers.

    Let alone the significance of brand ambassadors (folk who recommend to family and friends).

    I doubt the so-called business gurus in QF have quantified the true value of a loyal customer. Indeed having taken part in the QF market research I don't believe that their market research is smart enough to pick up the full picture.

    Personally, I have had agreeable experiences on Jetstar apart from serious cabin safety issues on four out of my first six flights, which were reported to the appropriate personnel and have now been fixed. Other friends and colleagues, however, have had disastrous experiences and I won't risk a Jetstar flight if on my way to a business meeting!!!

    Virgin have offered good service in my experience, but lost the plot for a while due to rapid fleet expansion. On my last flight with Virgin the safety demo turned into a joke fest, which put me off them completely.

    Of course Jetstar is only there because QF are trying to find something left on the expenses sheet which they can save money on, having stripped back service, added booking fees, started charging per sector, reduced the amount of points earned, increased points required for redemptions/upgrades, pumped up the surcharge fees and so forth. The only thing left is staff costs hence bypass the award system by setting up new airlines and outsource engineering!!!!

    No business worth its salt DILUTES its brand like QF, which now has FOUR different brands in the marketplace (QF, Australian, Jetstar, Jetstar Asia).

    I know there are many very pro-QF people on the forum, and yes they are best of the airlines we have domestically, but the reality is their overall service levels are poor and redeemed by the work of some dedicated customer-facing staff, who still believe in good customer service, which is clearly not the case for senior management, Geoff Dixon, John Borghetti, and their Group GM, of Customer Service Lesley Grant (I make the latter judgement on the inadequacy of her corrrespondence with me).

    Whether you love or hate QF, it is undeniable that QF have absolutely SCREWED their loyal customers with the repeated changes to the FF scheme and in my book that is a very short-sighted breach of TRUST with their most loyal customer base. That suggests there may abe a lot of people who would swap allegiance given a VIABLE alternative in terms of service and loyalty program.
     
  12. BlacKnox

    BlacKnox Active Member

    Jan 29, 2005
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    Both obvious meanings but nuff said :oops: :oops: :oops: .
     
  13. NM

    NM
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    Its not really any more work for them since the systems are all automated. So no more labour effort/cost. And if it means some people to end up paying more for cancellations/changes, then guess who wins?

    But you are correct, so fully refundable fares it is more effort to actually refund and no more cost for you.

    Lots of people filling QF aircraft using Red E Deals etc where they get $33 (hmm, I think it just went up to $38.50, didn't it) for each change. So cancelling a return trip results in 2 fees. So they get more from the cheap flyers and lose out on people on fully refundable fares.
     
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