Stop the addons, the nickel & dime fees… Price “all-in” for your bottom line & your reputation
Free Shipping: just about every retailer has it and many marketing tests have shown that even if you reduce the total price of an order by a couple bucks, people still go with the site that doesn’t have that specific line-item or even up their basket to get to the free threshold. Shipping is an afterthought, a line, a fee and like all fees we as shoppers feel like its being snuck in on us. People hate fees. Yet as ecommerce find overwhelming success in removing one fee, we seem to be adding new ones all over the place in an attempt to keep our base price looking low. All for what?
The best way to increase your profits or your loyalty is not to make your customers worry about the next addon fee: doing that merely drives them to check the other guys and blog, tweet and bash everyone every over every dime. There’s a reason why people are using the shopping cart and then leaving it so frequently (71%): they have to get that far just to know the actual costs.
The implication of nickel and diming is direct to the bottom line when someone passes by and less obvious with implications to brand reputation, loyalty and repeat business.
One could argue that we as consumer are as much to blame for fees as sellers are: after all we’ve bought into and encourage price wars through our hyper-comparative shopping and we will go to extreme lengths to save what amounts to pennies [like a Starbucks run to prep for a long line at Costco for gas]. But consumers been frustrated with the fee system for years now and more and more brands are turning this into a major win:
- Southwest airlines: A favorite for many regional and infrequent travelers and even though they’re considered a low cost carrier, the truth is they’re often not the cheapest but they’ve baked in costs that others charge averaging the impact out and turning burdens like lugging a bag into a positive which lets them run more efficiently.
- Washington Mutual [now Chase]: Granted WaMu’s mortgage arm didn’t do so well but remember how fast people, especially students and those living paycheck to paycheck, moved over when they announce no fee checking? Everyone copied it and when BofA tried to buck the trend with a Debit card fee this year, it cost them the homepage of CNN.
- Disneyland: Tell someone the price of a ticket and there’s a moment of shock but compare it to other theme parks and its clear what is Disney is doing. Yes, you can buy a meal or a tshirt and even charge for a few fair style games now but they don’t charge you for rides or fast passes, they’ll let you bring in lunch and you can come and go as you please while their competitors take a smaller upfront cost and then hit your wallet all day long.
- Amazon: Sure their base price is at the bottom of the list to start with but that’s the point: their base price is their price for almost every customer. There’s no shipping, there’s no electronic waste fee – it’s all baked in… I’m mighty interested to see what they do when they end up with tax in the majority of states; last I checked it was just 6.
All these brands share a common attribute: they’re popular.
It shouldn’t surprise us that the businesses which buck the trends to cater consumer’s perceptions do well. Hardcore shoppers, the really frequent fliers, the uber geeks, they all find the actual cost differences and stir up the pot here and there but most people aren’t looking to dive that deep.
So while so many businesses focus on how to out feature, out upgrade, out message, they’re missing the simple point that people want to feel like they got their money’s worth and that’s as much about the how the bill looks and what the social stigma of the brand is as the actual price they paid.

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