COVID has greatly impacted the financial health of most businesses and I appreciate business owners are trying to stay afloat during this time but it would seem that many of the bigger organisations have forgotten,
“When times are tough it is customer loyalty – word of mouth referrals and repeat business that will impact the survival rate of a business.
Loyal customers will continue to do business with you! They will willingly adapt to your new business model and purchasing methods,
they will purchase online
they will use your delivery option
they will ‘click and collect’
Loyalty is about looking after your customers and making a difference, especially during tough times. You don’t need to offer discounts and at the same time you don’t need to charge ridiculous amounts of money it’s NEVER about price gouging.
I don’t understand what is happening in the car rental market in Australia at the moment, I know they did have to get rid of a lot of cars but I don’t understand why, even with COVID lockdown restrictions it is so expensive to rent a car in Australia. It’s double what it used to be!
For example, I rented a car in Sydney and it cost an average of $300 per day.
Good Profit is NOT about making money at your customers expense. Why is the daily rate so expensive currently $300 – 400 per day?
For example, in last week’s BLOG Business Breakdowns EMOTIONAL DEPOSITS or WITHDRAWALS? I discussed the extra $100 accommodation charge per night for the hotel we were staying in when our return flights to Australia were cancelled by the airline.
And recently, I dealt with a car rental company who charged me a $120 fee to move my booking, even though I was moving it because of new Australian travel restrictions which meant I could not travel at that time.
Like what a freaking rip-off! I never want to use them again…..
I now check every supplier site to ensure there is no third party involved, as I realised I had unintentionally booked through a third party and therefore was not able to deal directly with the company – this was definitely a disadvantage the third party had nothing at stake and certainly showed no commitment to the customer loyalty of the brand they were representing.
So, $120 to move the rental – which was double the daily rate and then on top of that, they wanted to continue to charge me the same ‘peak’ rate (school holidays) even though I was moving the booking to an ‘off-peak’ time.
Why did the fuel price suddenly increase as Victoria went out of lockdown, a great example of price gouging.
Price gouging occurs when a seller increases the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair.
For example, look at the cost of flying to Australia, it’s a small fortune! In some cases, we are talking $30, 000.
I haven’t seen them raising the cost of interstate flights within Australia as yet, it is good that there is competition between airlines in Australia like Virgin, Rex, and Qantas this enables us to still fly at a relative cheap price, I think this is great I commend the airlines who I am sure are wanting to make as much money as possible but that keeps your customers wanting to come back.
People don’t forget when they feel like they are being ripped off!
As CHOICE outline in their article – Coronvirus and price gouging – let’s put a stop to it.
Price gouging during the coronavirus crisis has been rampant.
When retailers mislead
There are some practices around price gouging that are illegal, as the ACCC makes clear.
The regulator doesn’t control pricing, but it does have a say on how businesses treat their customers.
One practice that’s especially relevant to our current situation is when retailers lie about the reasons prices have gone up.
If it’s a fabrication, it’s a violation of the Australian Consumer Law.
We’ve heard of some businesses trying to explain massive price hikes as a way of controlling demand and preventing stockpiling. We don’t buy it, and neither should you. Restricting the quantities people can buy would achieve the same result and have the added benefit of not seeing customers get ripped-off.
And, as Warren Buffet says,
For more information click on the links below to read two of my previous BLOGS.
Price Relates to The Experience of Value
Good Profit vs Bad Profit
If you would like to have a chat with me about price goughing vs customer loyalty best practice contact me I look forward to hearing from you.
Warm regards,
Craig