You can't nickle and dime your way to profits

I started my ad career working on an airline account – American. So like my first love, my first kiss and a host of other firsts in my life, American and the airline industry will always be special to me. Guess that is why it really irks me to watch them making such tragic mistakes.

You can’t nickel and dime your way to profits. Earlier this year I watched a story on the news about all the new charges, especially the baggage charges. I have to admit, I didn’t realize the charges quoted are ONE WAY. So that $15 first checked bag is really $30 per person. If you figure that the average short haul ticket is in the neighborhood of $125-$250, you’re talking about a 10-20% surcharge.

Recently, I came across another article that US Airways was charging an additional $5 on that checked back if you didn’t tell them ahead of time that you were checking it. A fee for a fee!

Fine print is one thing. The airlines have always been second only to banking in their use of fine print, but to move 10-25% of your fee structure to the fine print? That is a surefire way to tick the American traveling public off and ensure that the host of airlines following in your footsteps do no better.

Let’s face it. The average business traveler doesn’t check bags, they carry them on. So no added revenue there. The customer that will feel this pinch most severely is the one that can most afford to choose an alternative travel solution – the tourist.

Given the current economy and a target audience (tourist) that can afford to just drive or worse, cancel that vacation, the airlines are continuing on a path to certain destruction.

Instead, why not just offer a better product. The airlines will tell you they can’t do it, there is too much competition, too much price sensitivity. That’s old school thinking.

Look at Apple, whose products are all priced at a premium versus the competition and are harder to find – everyone carries PC’s, but only certain retailers can carry Apple laptops.

Well that’s fine for products that can be inventoried they will say… when an airline seat leaves empty that is lost revenue forever. True. But the same could be said for restaurants, professional service firms, car services and hotels. Yet, in each category there are examples of companies that simply deliver a better, customer focused product and because of that, they win.

Air travel today is a commodity because airlines make it so. They allow the airport experience to basically suck. They allow the TSA screening process to totally suck. And they are quickly making the in air experience suck by focusing on selling you blankets instead of making you comfortable.

Consumers have and will always pay for something special, both in the air and on the ground. So if you’re a company that sells a non-inventoriable product and you’re feeling like the only thing you can do is cut costs or charge for things you used to provide as a courtesy, here are five thoughts that you might consider.

1. Information is cheap so give it away. If you're a taxi company, text me when my driver is on the way, late or out front of my house at 5am ready to take me to the airport. And let consumers text you that they need a cab and where. If you're a restaurant, don't give me a blinking, vibrating thing to carry while I wait for my table -- send me a text instead. Alert me if tables aren't turning as fast as you thought they would - maybe even tell me to go get a drink on you by showing this text to the bartender. Are you a small local pizza joint with no place for customers to sit while waiting for a table, then let me text or tweet you my name and how much advanced notice I need. At the appointed moment, text/tweet me back and ask for confirmation I'm on my way. Your tables stay full and I am not stuck sitting against a wall with four unhappy kids.
2. Recognize the customer. Here in New Orleans it's very common for the owner of a restaurant to not only be on premise but to table hop, saying hello and thanking folks for coming. It makes the locals feel good, impresses the tourists and best of all creates an opportunity to make a lasting impression. For instance, Mr. Wayne, the owner of the Bon Ton on Magazine recently moved my entire party to a larger table when it came available because I mentioned part of the group were clients in from out of town. What did that cost him? What kind of impression did it make on me/my clients? Think I'm taking clients there again?
3. Be interesting. It's really not that hard to be interesting in a world of beige, which is what we live in. In fact, stay tuned, I've been collecting examples and later this week I'm going to show you just how easy it is. Interesting is more fun and worth a few extra bucks.
4. Be creative. There is a restaurant in Philadelphia that has "open mic night" for aspiring chefs. They let those folks come in and cook that evening - a Monday no less - and who do you think eats on that night??? 
5. Be nice. God how I wish the current state of good customer service would be challenged. It's really not that hard to be nice. To smile. To say thanks and be genuinely thankful. People do respond to genuine displays of kindness and gratitude. It doesn't cost you anything to deliver but will reap you many rewards. 

What about you? Got any brilliant ideas you care to share? Anything to add to help companies reading this survive and thrive without having to resort to charging silly fees?