Containing the anger over customer fees

When assessing penalty charges, companies must be fair, flexible, and transparent. How can companies use penalty fees to stay in the black without causing their customers to see red?

That's what many firms are asking themselves as they impose more and more charges, and confront more and more irate consumers, over missed payments, late cancellations, no-shows, tardy returns, and overdrawn bank accounts. The short answer is that so long as companies see fees as a revenue generator, they will always lose some angry customers. But, according to this paper, firms can limit the damage if they build into their penalty program a dollop of forgiveness, a lot of transparency, and a host of other features that foster flexibility and fairness.

But seeking such revenue breeds resentment and risks fraying or even cutting the bonds with long time customers. Given that the penalty fees aren't going away, how can companies reduce those risks? ... READ MORE

Released strategy+business - June 2013

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