In the Trenches: Creating Value With Price Increases
Back in January, I wrote about our challenge in dealing with last-minute sign-ups for flight monitoring, especially when they came in right before a major weather event. Readers who commented on my post were supportive of us charging more, but I still hated the idea of increasing our rate without providing something in return. That’s when it hit me: I could increase our price and improve our service’s value at the same time!
The result is a new service called Priority Flight Monitoring that goes into effect on April 4. This service is for everyone who signs up for flight monitoring within seven days of travel. I’ve already sent a newsletter to all of our clients explaining what we were doing and why. So far, the worst feedback we’ve received was that a client disliked the price increase but understood why we did it. If that’s the worst feedback we get, then it seems like we’re handling this the right way.
What I wanted to do was explain the problem — and then show how we planned to fix it. Of course, the problem couldn’t simply be that we had to do more work and so we were going to charge more, because clients don’t really care about us. What I needed to do was explain how the existing system negatively affected them.
Here’s what I said: Our regular business hours are 6 a.m. to 7 p.m. Pacific Time. If someone signs up for general assistance at other times of the day or night, we don’t see their requests right away. (If they sign up for urgent assistance, then all kinds of bells and whistles go off, at least when our email works correctly.) Time differences have actually caused us to miss a few last-minute sign-ups, because we didn’t see client emails come in with enough time to provide the service. We just issued a refund after-the-fact.
Priority Flight Monitoring corrects this: When someone signs up for the service, their email goes to a separate address that alerts us immediately, even outside regular business hours. The price for the outbound part of the trip will be double our regular fee. Instead of $15 per regional and $30 per global flight, it will cost $30 and $60, respectively. (However, if someone signs up for round-trip monitoring and the return flight is more than a week later, the return remains at the old price.)
We’re not only changing our price to address internal issues, but also providing better service to clients. It’s a tangible improvement for those who sign up closer to departure.
Brett Snyder is President and Chief Airline Dork of Cranky Concierge air travel assistance. Snyder previously worked for several airlines, including America West and United, before leaving to create a travel search site for PriceGrabber.com. Snyder did his undergrad at George Washington and earned his MBA from Stanford.