Priced at What the Market Won't Bear

E-Commerce   Written by Kenneth Stearns - Word Count: 460
- -    

Earlier this year, Delta Airlines www.deltaairlines.com introduced a surcharge on airline tickets not purchased on its Web site. Customers promptly cried foul and the controversial policy was unceremoniously abandoned.

There are several issues at play here. Obviously, Delta might have received a better reaction if they had offered positive reinforcement to encourage their customers to try something "new and improved" that could enhance the way they buy airline tickets in the future. Win-win all around. Instead, they punished the less adventuresome of their customers by briefly burdening them with a fee. Not a good idea for a business in a customer service industry.

Now, let's consider the corporate perspective. On the heels of a hefty investment in technology, along with the likely reengineering of an existing process, a corporation seeks to simultaneously recover their expenses and encourage customers to take advantage of "the new way." Consumers assume technology will positively impact the process -- they expect the electronic commerce-enabled purchase to be faster, more efficient, easier and less expensive than the traditional method (also referred to as "the old way"). In this case, customer expectations were at odds with corporate strategy.

At least in this instance, Delta learned that it just won't work to chargeconsumers more (recovering expenses) to conduct business "the old way" in hopes of coercing customers to purchase tickets "the new way."

Consider a similar scenario in the real estate industry: What if a major national real estate franchise announced that commissions for all properties sold the traditional way would be higher than those sold via Internet-empowered means. It seems likely this new strategy would meet the same fate as Delta's surcharge.

In steadily increasing numbers, consumers invest time on the Internet to learn about cities, choose a neighborhood, review real estate information, shop for a home and review prospective lenders and Realtors. Innovative sites offered by E-Loan www.eloan.com, Finet www.finet.com, HomeShark www.homeshark.com, QuickenMortgage www.quickenmortgage.com, Priceline www.priceline.com/finance/mortgage, HomeAdvisor http://homeadvisor.msn.com and others, provide consumers with the opportunity to enjoy a faster, more efficient, easier and less expensive alternative to the traditional lending experience. There should be an equally impressive list of Realtor sites.

Maybe public reaction would have been different if Delta had offered adiscount for tickets purchased through its Internet site. And maybe the first companies to offer a logically discounted, electronic commerce-enabled Realtor sites will score big with consumers.


blog comments powered by Disqus

About the Author

Click Here to View
Kenneth Stearns's Profile
   Kenneth Stearns
   View All My Articles
  Would Like Me to Speak to Your Group?

Kenneth Stearns serves as a vice president RealEC, Inc., the first cooperative effort between title insurance underwriters designed to provide a real choice in electronically ordering real estate settlement services. His responsibilities include serving as a spokesman, liaison and information conduit for RealEC shareholders, strategic technology partners and other interested parties. Prior to joining RealEC, Kenn was Director of Real Estate Information Services for Stewart Title Company and an electronic commerce Product Specialist with Landata Systems.



Copyright (Reprint Terms)
Copyright© 2002, Kenneth Stearns. All right reserved. For information contact FrogPond at email susie@FrogPond.com.