Charging Fees Like the Airlines –Farquharson/Tedesco
Can you imagine going to a restaurant, dropping your fork on the floor during the meal and being charged for its replacement? Of course not! What about filling up at the gas station and paying extra to have your oil checked or your windshield cleaned? Never! Yet when it comes to charging for things that should be included, airlines are allowed to get away with murder. There are fees to change a ticket, check a bag, pick a seat, pick a comfy seat and even to speak directly to someone on the phone when you want to do business with them. Lucky so-and-so's!
Interesting business model: Charge fares that get customers on board and cover your base costs, and then dream up a series of extras that boost profitably. Like the printing industry, airlines are "profit challenged" these days yet, unlike us, they have stopped giving things away. What can we learn from them?
These days, printers are fortunate to be able to add meager prepress and AA charges to a bill, never mind the cost to download or RIP a file. We print and we charge for what was printed. Plus tax. And shipping. Sometimes. Much of what the printer does never appears on the final bill.
Man, are we ever missing an opportunity! Across town, another business model exists that is making money not only for their core competency, but for just about every other related activity imaginable. What if we could do the same? What if we ran our business like an airline?
According to the ATA, the airline industry generated $5.7 billion in ancillary revenue through non-ticket charges last year. Read with your pinky on the side of your mouth, it seems bigger: $5,700,000,000! Sure, they'll fly you from here to there as promised, but the opportunity to charge additional fees doesn't stop there. As any flyer will tell you, they have figured out a way to make money hand over fist.
Perhaps we can learn something from this high-flying model. Here are a few ideas—presented with tongue firmly pressed into the cheek—but offered to get you thinking...
What they do: Charge a booking fee. If you want to buy a ticket by calling an airline and talking to a real person, you will pay an extra $25. That is, if you can understand what they're saying.
What printers can do: Charge to quote a job. Hey, there are expenses involved in this process. Hitting a customer up for, say, $50 per complex quote would go a long way to eliminate the "Give me prices on 5M, 10M and 25M in one and two colors on three different paper stocks." We might also consider charging the customer to place an order if they do it over the phone. Just a thought.
What they do: Charge a change fee. Typically, after you book your ticket, if you want to make a change to the flight you will endure anywhere between $100 and $150 in addition to any fare difference.
What printers can do: We already have AA fees. What if the customer makes a spec change, such as quantity, paper type or size? Give the customer one shot to state what they want and charge them $50 to make a change. This would certainly make our CSRs happy!
What they do: Charge extra for checked bags. With the noted and well-advertised exception of Southwest Airlines and a few others, if you want to bring an extra pair of underwear, you're going to pay between $25 and $35 per bag. Not only that, Spirit Airlines now charges up to $45 for a carry-on bag!
What printers can do: Let's follow Southwest's lead and make the first box of printed material free. Additional boxes, however, incur a $25 charge. Each. If the customer chooses to, they are welcome to come and pick up the job on their own. They'll just need to remember to bring their own boxes. Hey, it works for BJ's Wholesale! Do they think this stuff grows on trees? Um, scratch that last part.
What they do: Charge for seat selection. Unless you want to run the risk of sitting between two sweaty Betty's, you'd better be ready to shell out an average of $15 to preselect your seat. Oh, and if you want to upgrade your seat, get ready to pay $25 to $55 extra.
What printers can do: By putting your manufacturing schedule online and color-coding it like they do, you can let your customers choose the date and time they want their jobs produced. Suggested charge: Midweek, mid-day production slots four weeks out, free. Anything sooner than that goes for $25. Per day. As for upgrades, okay, we have this one already, don't we? We call it, "The rush job."
What they do: Charge for same-day flight change. Let's say you arrive at the airport and want to take an earlier flight. You will pay roughly $25 on most airlines.
What printers can do: When the job is ready, call the client and say that it will be there at 5 p.m. If the customer wants it any sooner, charge $10 per hour.
What they do: Charge for in-flight food and beverages.
What printers can do: The obvious opportunities here are to split the bill for all client lunches and dinners, as well as to put vending machines and/or snack bars in your lobby and conference rooms. That way, while customers wait for press proofs and changes you can maximize a profit opportunity while simultaneously reducing the amount of extraneous changes.
What did we miss? Charges for unaccompanied minors, pets, pillows and blankets amongst other things. The list of additional charges is long and getting longer as the airlines think of new ways to drive revenues and profits. And they're not alone. Banks are constantly looking to follow their lead, most recently seeking to charge their clients for access to their own money if they use a debit card.
The airline industry has undergone a fascinating evolution in the last 25 years. Legacy airlines were outsold, undersold, out hustled and out marketed by a new breed of discount airlines—a trend that aided in the bankruptcies and mergers of the former and a blooming of the latter.
Who will be our innovator? Who will be our Jet Blue? Our Southwest? Our AirTran? Where will you be when this revolution happens?
The reality is that printers provide a phenomenal amount of ancillary services without charging ancillary and obscene fees. We quote, prepare, print, package, ship and invoice a job for just one fee.Customers can order online or call us and they can place an order for free! Heck, we'll even send someone out to meet with them personally if they so desire. When a client needs it faster, we accommodate.
No customer request is too crazy or outrageous and we would never think of showing a client the door for using their smart phone at our facility. Ours is a 500+-year-old industry built on quality and integrity. We charge a fair price for our services and, until printing presses come with wings and seats, we will continue to under promise and over deliver with that same quality and integrity. But that doesn't mean there's no room for a Richard Branson to step up. Get pondering...
By the way, your Printing Impressions account has been charged $25 for reading this article and an additional $50 if you enjoyed any part of it. However, reading Bill and T.J.'s blogs at PIworld.com is still free. For now.
Enjoy the flight! PI
—T.J. Tedesco, Bill Farquharson
About the Authors
T.J. Tedesco is team leader of Grow Sales, a 16-year-old marketing and PR services company. He wrote the newly-released "Direct Mail Pal 2012" and seven other books. Contact Tedesco at (301) 294-9900 or e-mail email@example.com. Bill Farquharson is the president of Aspire For (www.AspireFor.com). His Sales Challenge can help drive your sales momentum. Contact Farquharson at (781) 934-7036 or e-mail firstname.lastname@example.org.