Companies and the Customers Who Hate Them Essay

How can customer dissatisfaction lead to higher profits for the caller? Companies shake up found out that ill- declargoned customers can be beneficial for them in terms of profits. Some companies have ab applyd their customers intentionally, however others unwittingly utilize and in additionk advantage of them. The Slippery slope There argon both major ways in which companies make profits by misleading their customers * oblation the customers a broad variety of services or products, which can be very confusing, especially when there is lack of transp arency.Moreover, if even the information is release for the customers, the companies can take advantages of consumers surdies in predicting their needs. * Using fees and penalties for offsetting costs and discouraging unenviable customer behavior. These hostile strategies are common from banking and hotel industries to video stores and car rentals. hither particularly 3 industries will be discussed in details stall phone atte ntion, retail- banking assiduity and health club industry. Cell phone industry When a customer signs up for a service device, he chooses a certain pricing option with different ranges of minutes.These plans can have discordant restrictions and allowances. However, these varied plans are not a result of customer-centric strategy. They are instead ways to take advantage of customers unawareness of which plan to choose, in the result of which customers can be penalized either for using too much time or for not using enough. However, such strategies cannot constantly guarantee profits for the company. They can increase the dissatisfaction among customers, the proof of which can be thousands of complaints that the U. S. Federal Communications Commission gets annually.These complaints should be worrisome to companies be causality customers can change toward a transparent and friendly alternative. Retail-banking industry Another sphere in which the company-centric strategy is used is retail-banking industry. For signing up in the checking accounts people are offered dozens of alternatives. If the customers cannot precisely predict their needs, they can have losses. Here are some examples of situations when the banks take advantage over the customers ignorance * The customers receive less elicit when the consumers balances are above the minimum of the balance bucket and if the alances fall on a lower floor the minimum level, they have to pay some penalties.* Banks usually debit the consumers checks in the order of size, rather than in a chronological order, for the rest of the checks to kick and to cause multiple overdrafts, consequently penalties. The company-centric strategy of banks led to the customers dissatisfaction and it became so permeant that juvenile York congresswoman Carolyn Maloney reintroduced the Consumer Overdraft Protection Fair Practices Act to forbid banks charging overdraft resistance fees, unless the customers explicitly are informed a bout the service.Health club industry Health clubs tempt customers to sign long contracts, knowing that they will rarely visit the club. They realize that all their customers will not completely use the facility and therefore sell more than memberships than they have the floor topographic point to accommodate. Moreover, an investigation conducted by the New York City Council concluded that 41% of clubs didnt explain their fees in writing, 81% didnt give potential members a contract to read at home and 96% didnt inform customers of all the ways they could legally cancel a contract.In New Jersey a lot of complaints have brought litigation against al well-nigh two dozen health clubs that provided fraudulent contracts. Health clubs require to spend more time to attract new customers because their existing ones try to find a way out. Moreover they even encourage ways to retain customers with reenforce points for members who work out regularly. The warning signs According to the rese arch most of the executives are acknowledging the ostracize effects of the functions described above but they mention that those actions do not represent an intentional strategy.The executives know that because of these negative practices the companies slid down the guileful slope and have difficulties for purchasing on the way backward up thus becoming vulnerable for the competitors. For avoiding this practice the executives should ask themselves the questions mentioned bellow. * Are our most profitable customers those who have reasons to be dissatisfied with us? * Do we have rules we want customers to break because doing so generates profits? Do we make it difficult for customers to understand or abide by our rules, and do we actually process customers break them? * Do we depend on contracts to prevent customers from defecting? Climbing back into favor Effective CEOs are able to recognize the opportunities and eliminate the negative effects which make the company vulnerable. T he company centric strategies can cause loss of the target market and profitability in a long-term period, thus many companies prefer being economically sustainable.