Consumer Power Thanks to the Internet
Posted: August 16th, 2008 | Author: Jamie Phelps | Filed under: All Posts | 1 Comment »Recently, I realized how much power the Internet gives to consumers. I had two experiences yesterday that bring this point home.
The fall semester begins in a little more than a week. I went to the book store at school to find out what the required texts were. The software engineering book was $121.60 new and the database systems book was $118.00. I popped my iPhone out of my pocket and browsed to Amazon.com. In less than five minutes, I had located the books and purchased them. Grand total: $140. Victory number one.
Victory number two began when I found out I was going to C4 on a student scholarship. I started making travel arrangements. I checked Expedia and Travelocity first. Travelocity was by far cheaper than Expedia and the price was good, so I decided to book the trip. But every time I clicked through to what I suppose should have been the final page, it redirected me to a fresh search. I tried several times over the course of two hours until finally, I called Travelocity. (“Your call may be recorded.” Please, God, tell me it was.) I got someone on the phone who was obviously located a couple continents away. I explained to him that the website was not functioning properly and that I needed assistance booking the travel. He said, “I can help you with that, but there will be a $25 charge for booking over the phone rather than through the website.” I explained to him that I shouldn’t have to pay that fee because the website was malfunctioning. Otherwise, I wouldn’t have called. He maintained that the fee was non-refundable. So, I asked to speak with his supervisor. “Sure, you can speak to the supervisor, but he will tell you the same thing.” He put me on hold.
While on hold, I brought up Orbitz.com. I found the exact same flights and hotel accommodations for $6 more than Travelocity’s price before the $25 fee. “That’s fine,” I thought to myself.
When the supervisor came on the line, I reiterated the situation. “Website borked. Please waive fee.” The supervisor rattled off some script about prices changing constantly and that the fee could not be waived. When he said that, I clicked submit to book the travel on Orbitz.
I explained to him that since he (or Travelocity, it doesn’t matter which really) was not willing to waive a $25 charge that I should not have to pay anyway, they were foregoing the entire $830 sale. (Ann Margaret is going as well to do some shopping and such.) Not only that, but the bureaucratic (The archives show how I feel about bureaucracy.) attitude of Travelocity’s representatives means I will never do business with them again. Marketing research tells us that it is much cheaper to keep an existing customer than it is to acquire a new customer. Something tells me that for Travelocity, acquiring a customer to replace me will be much more expensive than $25. I wonder if Travelocity thinks the loss of a customer for life is worth $25. I seriously doubt it.
What is interesting about this is that if it weren’t for the Internet as we have it today, I would have had nearly no leverage. If I were sitting in a travel agency office and they tried to foist some fee on me, I could threaten to go to another agency. I could. But unless it’s particularly egregious, I know (and they probably do too) that I’m not going to waste my time going to another agency. But what if I had the other travel agent in the same room saying, “Oh, we won’t charge you some stupid fee.”
In both cases, I was able to “visit the competitor” without any real effort. I was able to retrieve competing offers in both cases without physically changing venue. Moreover, I was able to make good on the usual threat to go with another company immediately. The Internet affords consumers leverage that was simply not available in the past.
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