As of January 15th Verizon will start charging its customers a $2.00 convenience fee for paying their bills on-line via a credit card. Now as a Verizon customer myself for my home and business, let me address all the ways that this situation was mishandled and hopefully give a summary of how customers don’t want to be treated.
Don’t spring change on your customers
Most customers will be loyal to a company if good service is guaranteed and changes are communicated directly to the customers. I understand that business has to evolve, but let me know with more than a notice on the website that I may or may not see. Explain to your customers what you are changing and why you are doing it. Don’t issue the standard corporate statement; if you want to retain your customers during the change you are going to have to give them a reason to trust you. So the old ‘suprise!-We’re charging you more money’ schtick is probably not the best way to go.
Don’t lie to your customers
The official line is that the convenience fee is to offset the amount the credit card companies charge per transaction. My personal research into transaction fees ( I did a quick search on Fee Fighters of about 13 processing companies) showed an average of about $.26 per transaction, so what is the remaining $1.74 used for? This convenience charge extends to more than just credit cards; if you pay by phone you will be charged the fee as well. I understand that the name of the game in business is profit, but should you profit indiscriminately? The company says that customers should pay for the convenience, but if you were able to gain your customers with the ability to pay more than one way without a fee should you be able to enact the fee when you want to increase your profit margin?
Make sure your explanations make sense
The main problem with Verizon’s explanation is that a few years back everyone was pressuring consumers to go paperless in their payments and bill receipt, now they are actually telling customers it will cost less for them to send in a paper check? When I put on my business hat I think okay, now they have to physically employ more staff to receive and process checks when electronic transactions decrease the amount of staff, oversight, overhead etc. How is that less costly? Automated payments also decrease the amount of mistakes that occur in processing. They are not infallible and I am not saying that nothing bad ever happens, but you have to admit that the mistakes are decreased. So what is the real reason Verizon? If you need another revenue stream, just be honest about it.
I’ve said it before and I will say it again, without customers you have no business. Stop treating customers like they are a necessary nuisance and start working for them, that’s why you’re in business right?