Discounting—it feels like a surefire way to attract customers, right? Everyone loves a good bargain. But what happens when discounts stop being a tool and start becoming an expectation?

In this episode, Colin Shaw and Professor Ryan Hamilton dive into the dangerous addiction of price discounting—how it lures in customers, why businesses struggle to stop, and the long-term damage it can do to your brand and bottom line.

You’ll hear painful stories of businesses that have trained their customers never to pay full price, the psychology behind why discounts are so irresistible, and why, if you’re not careful, your company could end up hooked on discounting like a bad habit.

This episode is packed with insights, humor, and practical advice you won’t want to miss!

Best Quote from the Episode:

“We knew we had a problem when one of the executives said, ‘This is like heroin—we can’t stop!’”

Key Takeaways:

✅ Discounting Works—But Be Careful!
Customers love a good deal, and discounts create instant excitement. But if you do it too often, you’re not just offering savings—you’re training customers to expect them.

✅ Reference Points Matter
A “Was $7, Now $5” deal feels like a win, even if $5 was always a fair price. Discounts give customers an anchor price, making them feel like they’re getting a bargain—even if they’re not.

✅ Big Numbers Win
People respond more to “SAVE 30%” than “SAVE $2.” The bigger the number, the better the deal seems.

✅ The Thrill of the Hunt
Shoppers love feeling like they “won” at shopping.

✅ The Danger of Training Customers
If customers know you’ll discount every two weeks, they’ll never pay full price again. Some companies become trapped in perpetual discounting cycles, losing profit just to keep customers coming back.

✅ Compete on Value, Not Just Price
Apple doesn’t run 50% off iPhone sales every Black Friday. Their customers pay full price because they believe in the value. If your business relies on discounts, ask yourself: Would customers still buy from us if we didn’t offer them?

✅ Are You a Discount Addict?
If discounts are your main strategy, it’s time to rethink. Are you making real money, or just moving stock? If the answer makes you nervous, it’s time for a change.

Why You Should Listen:

This episode is a must-listen for business leaders, marketers, and CX professionals who want to break free from the discount trap and build a pricing strategy that doesn’t just attract customers—but actually makes money.

About the Hosts:

Colin Shaw is a LinkedIn ‘Top Voice’ with a massive 284,000 followers and 86,000 subscribers to his ‘Why Customers Buy’ newsletter. Shaw is named one of the world’s ‘Top 150 Business Influencers’ by LinkedIn. His company, Beyond Philosophy LLC, has been selected four times by the Financial Times as a top management consultancy. Shaw is co-host of the top 1.5% podcast ‘The Intuitive Customer‘—with over 600,000 downloads—and author of eight best-sellers on customer experience, Shaw is a sought-after keynote speaker. Follow Colin on LinkedIn.

Ryan Hamilton is a Professor of Marketing at Emory University’s Goizueta Business School and co-author of ‘The Intuitive Customer’ book. An award-winning teacher and researcher in consumer psychology, he has been named one of Poets & Quants’ “World’s Best 40 B-School Profs Under 40.” His research focuses on how brands, prices, and choice architecture influence shopper decision-making, and his findings have been published in top academic journals and covered by major media outlets like The New York Times and CNN. His work highlights how psychology can help firms better understand and serve their customers. Ryan has a new book launch in June 2025 called “The Growth Dilemma: Managing Your Brand When Different Customers Want Different Things” Harvard Business Press Follow Ryan on LinkedIn.

Subscribe & Follow

Apple Podcasts

Spotify

The post The Psychology Of Discounts: Are You Inadvertently Training Your Customers? appeared first on Beyond Philosophy.

Pricing. It’s one of the most critical decisions your business will ever make, yet most people approach it like a finger-in-the-air guessing game. But what if you could tap into psychological principles to not just set prices, but make your customers feel they’re getting a great deal? That’s what this episode of The Intuitive Customer is all about.

Join Colin Shaw and Professor Ryan Hamilton as they break down the fascinating—and sometimes hilarious—world of psychological pricing. From late-night infomercials and $400 bath towels to popcorn buckets and outrageous anchoring techniques, we explore why pricing is more than numbers on a tag—it’s a story you tell your customers.

Along the way, Ryan reveals the secrets behind charm pricing, scarcity cues, and the “decoy effect,” while Colin shares how early mistakes taught him the importance of understanding customer perception. (Spoiler alert: guesswork is not a strategy.)

If you want to understand the psychology behind pricing—and how to use it to improve your bottom line—you’ll love this episode. But be warned: you might never look at a price tag the same way again.

Best Quote from the Episode:
“The price isn’t just a number; it’s a conversation you’re having with your customer. And if you’re not telling the right story, someone else will.” — Professor Ryan Hamilton

Key Takeaways (But You’ll Have to Tune In for the Full Insights!):

1. Anchoring: The “Big Daddy” of Pricing
   Why giving customers a frame of reference can make your prices seem more attractive.

2. Charm Pricing Still Works (But It’s Changing)
   $0.99 vs. $1.00—what’s really happening in the customer’s mind?

3. The Decoy Effect: Guide Them to the Right Choice
   How medium popcorns make large popcorns irresistible.

4. Scarcity and Social Proof: The FOMO Effect
   The subtle art of using “only 2 left!” without annoying your customers.

5. Price Elasticity: Know Who You’re Selling To
   Some customers care deeply about price changes—others don’t. Do you know the difference?

6. Signpost Items: First Impressions Matter
   Why your pricing on milk, batteries, or even AA batteries can shape brand perception.

7. Price Fairness: Handle with Care
   Overcharging can ruin trust, even if it makes short-term financial sense.

Why You Should Listen:
Whether you’re pricing consulting services, running a retail store, or managing a SaaS product, this episode is packed with actionable insights that will make you rethink how you price—and how your customers perceive your value. Plus, it’s full of funny stories, practical advice, and a healthy dose of British-American banter.

Don’t just set prices. Shape perceptions.

About the Hosts:

 Colin Shaw is a LinkedIn ‘Top Voice’ with a massive 284,000 followers and 86,000 subscribers to his ‘Why Customers Buy’ newsletter. Shaw is named one of the world’s ‘Top 150 Business Influencers’ by LinkedIn. His company, Beyond Philosophy LLC, has been selected four times by the Financial Times as a top management consultancy. Shaw is co-host of the top 1.5% podcast ‘The Intuitive Customer‘—with over 600,000 downloads—and author of eight best-sellers on customer experience, Shaw is a sought-after keynote speaker. Follow Colin on LinkedIn.

 Ryan Hamilton is a Professor of Marketing at Emory University’s Goizueta Business School and co-author of ‘The Intuitive Customer’ book. An award-winning teacher and researcher in consumer psychology, he has been named one of Poets & Quants’ “World’s Best 40 B-School Profs Under 40.” His research focuses on how brands, prices, and choice architecture influence shopper decision-making, and his findings have been published in top academic journals and covered by major media outlets like The New York Times and CNN. His work highlights how psychology can help firms better understand and serve their customers. Ryan has a new book launch in June 2025 called “The Growth Dilemma: Managing Your Brand When Different Customers Want Different Things” Harvard Business Press Follow Ryan on LinkedIn.

Subscribe & Follow

Apple Podcasts

Spotify

The post Psychological Pricing: 7 Practical Tips You Can Use Today to Boost Sales appeared first on Beyond Philosophy.

Quote of the Episode

“If something feels off, it probably is. Trust your instincts and push for clarity—because informed customers are empowered customers.”

Episode Summary

In this episode of The Intuitive Customer, Colin Shaw and Professor Ryan Hamilton discuss the all-too-common experience of feeling ripped off. Drawing on Colin’s personal experiences with home repairs and unexpected costs, they delve into the anatomy of being taken advantage of as a customer. Together, they explore the power dynamics, manipulative tactics, and psychological cues that underpin these interactions.

From high-pressure situations to unnecessary upsells, the hosts provide insights into recognizing when you’re being overcharged and how to protect yourself. Along the way, they share actionable tips for consumers and lessons businesses can learn to build trust and transparency with their customers.

Key Takeaways

1. Red Flags of Being Ripped Off:

   • Urgency and High Demand: When time is short, and demand is high, you’re more likely to encounter inflated prices.

   • Irrelevant Questions: Excessive or unrelated inquiries can signal attempts to upsell or gauge your lack of expertise.

   • Upselling Early: If a provider pushes additional services before addressing your core issue, proceed cautiously.

   • Manipulative Sales Tactics: Techniques like “calling the manager” or creating false scarcity are designed to wear you down.

   • Unease: Trust your gut—if something feels off, it probably is.

2. Power Dynamics and Information Gaps:

   • Service providers often have the upper hand in terms of expertise and resources, which can lead to exploitation.

   • Customers should ask detailed questions, break down costs, and research to close the information gap.

3. Lessons for Businesses:

   • Transparency and honesty foster long-term trust and customer loyalty.

   • While exploiting urgency or knowledge gaps may yield short-term gains, it damages reputation and drives customers away.

4. Practical Tips for Consumers:

   • Avoid rushed decisions and gather multiple quotes when possible.

   • Demand clarity on costs and don’t hesitate to negotiate.

   • Recognize manipulative tactics and assert your rights as a customer.

About the Hosts:

Colin Shaw is a LinkedIn ‘Top Voice’ with a massive 284,000 followers and 86,000 subscribers to his ‘Why Customers Buy’ newsletter. Shaw is named one of the world’s ‘Top 150 Business Influencers’ by LinkedIn. His company, Beyond Philosophy LLC, has been selected four times by the Financial Times as a top management consultancy. Shaw is co-host of the top 1.5% podcast ‘The Intuitive Customer‘—with over 600,000 downloads—and author of eight best-sellers on customer experience, Shaw is a sought-after keynote speaker. Follow Colin on LinkedIn.

Ryan Hamilton is a Professor of Marketing at Emory University’s Goizueta Business School and co-author of ‘The Intuitive Customer’ book. An award-winning teacher and researcher in consumer psychology, he has been named one of Poets & Quants’ “World’s Best 40 B-School Profs Under 40.” His research focuses on how brands, prices, and choice architecture influence shopper decision-making, and his findings have been published in top academic journals and covered by major media outlets like The New York Times and CNN. His work highlights how psychology can help firms better understand and serve their customers. Ryan has a new book launch in June 2025 called “The Growth Dilemma: Managing Your Brand When Different Customers Want Different Things” Harvard Business Press Follow Ryan on LinkedIn.

Subscribe & Follow

Apple Podcasts

Spotify

The post 5 Ways You Can Tell When You Are Being Ripped Off! …And What To Do About It! appeared first on Beyond Philosophy.

Listen to the podcast:

One of our podcast listeners stumped me a bit with a recent question. Sonia Montella asked for a detailed explanation of customer loyalty and why we need it. I decided that such a good question deserved a good answer or, at least, the best possible answer I had. Since I figured some of you might have the same question, I also wanted to share that discussion in the newsletter.

I have a few things from a psychological perspective that make up loyalty. However, before we get into those, let’s contextualize this.

I always look at loyalty by thinking of who I am loyal to in my life. The answer is usually my family and friends.

I would also include my loyalty to my Luton Town Football Club sports team. People are very loyal to their sports clubs, and I am no different. It’s rare for people to change allegiances to sports franchises once they’re held, even if you move to another place that has a different sports team.

So, with that background, let’s get into the things that make up loyalty.

The Emotional Aspect of Loyalty

Loyalty is an emotional attachment. My emotional attachments are most intense to my friends and family and the Luton Town Football Club, even though they sometimes give me heartache. Especially Luton Town, which had fallen through five tiers of English Football in recent years, which is pretty terrible. My loyalty to the club is so strong that we even donated money to the club during COVID-19 when they couldn’t play and were in financial trouble.

(I am happy to note that Luton Town has returned to the Premiership, the highest level of play in English Football.)

Many people think that customers who buy over and over are loyal. However, repeated behavior does not always indicate loyalty. Doing something repeatedly does not mean you are faithful to it. Sure, loyal customers will always buy, but people who buy over and over are only sometimes loyal. They could be buying for other reasons with no emotional attachment.

Therefore, loyalty is a relational construct. In other words, it’s part of a relationship with a person, organization, or brand, and it is based on your emotions about it.

For example, we watched a show in England called The Traitors.

It’s unusual for Lorraine and me to watch a game show like this one, but we made an exception because the premise is compelling. It’s a reality competition show for $250,000 with 21 contestants and 2 or 3 of them are traitors. The object for the loyals is to locate the traitors; the traitors want to avoid being caught. The last person standing wins.

At the conclusion of this past season (the English version), it was clear that one of the last people standing felt betrayed. Moreover, the traitor also felt gutted about deceiving the other contestant but still won the game. Both were emotional reactions formed by their relationship on the show, which by all appearances was a loyal one—at least to one of the contestants.

The Sacrifice of Loyalty

One of the important parts of customer loyalty is sacrifice. If you give up the opportunity for other things, that is a level of sacrifice. However, the relationship is less likely to be truly loyal if you don’t have to give anything up or are not likely to give anything up for it. In a sense, the willingness to endure discomfort on behalf of something is the most important element of this concept.

For example, I have been a cable company customer for 20 years. However, I am not loyal to them. They are my only option. If I could go to a different provider, I would do it.

By contrast, I am a loyal customer of Apple. I pay more for my components to do so, too. I could buy from other, more economical providers than Apple, but I chose not to. It is a sacrifice I am willing to make because I believe in the consistent quality Apple produces.

This Apple relationship also indicates the importance of trustworthiness in the relationship. I trust that what they produce in the future will be high-quality because of their past performance. They earned my business by delivering top-quality products and services.

We Need Loyalty in Our Lives

Most of us have to be loyal to something. Why? Why would we be faithful to things that cause us to sacrifice and miss out on alternative opportunities? Deep down, we want loyalty to be part of defining ourselves. It helps us give structure or order to our own beliefs.

It’s a bit like tribalism. We like being a part of a tribe because we feel more protected. It ties into trust and the feeling that one belongs to a group.

Much loyalty exists within tribalism, and much of tribalism is enforced through loyalty. This concept holds even when there isn’t a tribe, per se.

For example, you might be loyal to a particular brand of toothpaste. Toothpaste doesn’t have a tribal following, nor is there a giant community of toothpaste lovers. However, you are still loyal to it, sans tribe. The fact that you choose this toothpaste that whitens/strengthens/freshens breath and is made by a particular brand makes you feel like you are part of that community.

That said, loyalty within a community, where everyone is loyal to one thing, often translates into being faithful to one another. Loyalty is an important driver of the community, and the community drives loyalty. We want that bonding.

The Power of Going the Extra Mile for Customers

So, I’ve had people come to the house to fix things. Sometimes, they will go the extra mile and inconvenience themselves to do the job. That engenders sacrifice on their part and, in my mind, signals loyalty to me and solving my problems.

Organizations can do this, too. At the beginning of COVID, I had previously booked travel to the Galapagos Islands through Trailfinders. It was an expensive trip that was now canceled because of a global pandemic.

Trailfinders responded brilliantly, giving our money back fairly quickly, which wasn’t always the case in these situations. Looking back, that situation must have been a nightmare for those travel agents operationally and financially. However, their sacrifice back then means we now book all of our holidays through Trailfinders.

As I mentioned, we need to feel loyalty and tend to be loyal to those who are loyal to us. That is most often how loyalty works.

So, What Should You Do with This?

I often say that loyalty is the most overused phrase in business. Most organizations think loyalty means the customer gives us all their business. However, that view can create a one-sided loyalty or misjudge customer behavior motivation. So, Sonia’s question is a great one because definitions can aid in building customer loyalty.

One way to think about loyalty is to consider the sacrifice involved.  Without sacrifice, there isn’t any evidence of loyalty. So, what are customers sacrificing for you? Perhaps more importantly, what are you sacrificing for customers? True loyalty is two-way, meaning both sides are sacrificing something.

Another consideration is how emotional the attachment is. Recognizing the emotional connection between the organization and the customer is essential. Customers need to feel valued and cared for to trust you, and they will be loyal to you.

Plus, it is important to recognize that defining what loyalty is for your organization is critical. Sonia might consider buying the team lunch and discussing loyalty and what that means to them. Defining these customer concepts can lead to philosophical debates or alternate ideas. Regardless, the discussion will produce insights that lead the team in the right direction to improve customer loyalty in the organization.

Finally, the best strategy for engendering loyalty on the part of your customers is to be loyal to your customers. By that, I mean living up to your brand promises, doing what you said you were going to do when you said you were going to do it, sacrificing when you need to because it’s the right thing for the customer, and treating them the way you want to be treated. Doing these things is not the only way it happens, but it is the most likely way to foster customer loyalty successfully.

Have something to say? We are looking for people to share their new ideas, opinions, thoughts, reports, or statistics in a 5-minute video & audio. We will run this at the show’s top, and Colin will discuss it with his co-host, Professor Ryan Hamilton. This is an excellent opportunity to get your message to a vast audience. Currently, the podcast has 12,000 downloads per month on average!

If you’re interested in submitting, fill out the form here.

The post The Power of Psychology: Effortless Ways to Build Customer Loyalty appeared first on Beyond Philosophy.

During a recent discussion with a valued client, I uncovered an interesting revelation. While they were delighted with their repeat business, which they attributed to customer loyalty, a closer look at the repeat business statistics painted a different picture. What I observed wasn’t a steadfast commitment from their customers; rather, it appeared to be inertia. 

This prompted my realization that these customers might easily switch to a competitor if a tempting offer came along.

Now, you might be wondering, aren’t loyal customers the ones who keep coming back for more? They certainly are, but not all repeat business is a result of loyalty. In some cases, it’s due to inertia, and distinguishing between the two is what we’ll delve into today.

First, let’s establish clear definitions for customer loyalty and inertia. Loyal customers intentionally choose your product or service because they have a genuine emotional connection with your brand. They can articulate why they prefer your offering. In contrast, inertia is about automatic and habitual purchasing. It’s a decision made almost unconsciously, and individuals might struggle to explain why they chose your product.

Reflect for a moment on the people in your life to whom you feel truly loyal. Typically, you’d think of family and close friends. These are relationships rooted in deep emotional connections. Surprisingly, it’s these very emotions that underlie brand loyalty.

For many organizations, measuring loyalty can be challenging, but they often track repeat business. The issue arises when they treat other types of repeat buying – the inertial and the habitual – the same way they view loyalty, failing to distinguish between them.

In this episode, we talk about how to make this distinction. This approach separates loyal customers from those who buy out of habit or inertia. We also talk about how to develop strategies that nurture genuine customer loyalty.

Here are some other key moments in the discussion:

• 02:03  We discover how Colin decided to cover this topic from his recent client meeting. 

• 05:29  Ryan shares his mini framework that he teaches his grad students, the three groups of repeat business motivations.

• 10:19  Colin shares how he discovered that he wasn’t really as loyal to Delta Airlines as he thought he was.      

• 18:28  We share our list of telltale signs that you have customer loyalty. 

• 23:24  We discuss how extrinsic and intrinsic motivation is different and it affects customer behavior. 

• 26:51 We share our final thoughts about this topic and what you should take away from the conversation.

Did you know we have a YouTube Channel too? Check it out here.

About Colin Shaw

LinkedIn recognizes Colin Shaw as one of the ‘World’s Top 150 Business Influencers.’ As a result, he has over 294,000 followers and 78,000 subscribers to his LinkedIn newsletter ‘Why Customers Buy’. The Financial Times selected Beyond Philosophy as one of the best management consultancies for four years. 

Colin is a renown keynote speaker and undertakes consultancy work and educational workshops to help organizations improve their Customer Experience. 

Click here to learn more about Professor Ryan Hamilton of Emory University. 

How can we help?

Click here to learn more about Beyond Philosophy’s Suite of Services.

Please tell us how we are doing! Complete this short survey.

The post One of The Biggest Mistakes Made Today Is Confusing Inertia With Loyalty appeared first on Beyond Philosophy.

Like many of you, our listener Brian Williams is grappling with the additional costs of doing business in our era of sustained inflation. He and his colleagues are in a pickle, and they asked for our help. Williams and the company wondered if they should raise prices or add additional fees to cover it. Since I am sure many of you have been wondering along the same lines, I wanted to share what we discussed about this business problem here, too.

In Williams’ case, some of the indecision stems from the fact that the competition hasn’t raised prices. So, if they were to raise them, Williams has concerns that they will no longer be competitive. The additional fees, however, would generate more revenue to balance additional costs while allowing them to maintain their current price point, and their competitiveness, ostensibly.

However, people are not huge fans of additional fees. So, naturally, they are concerned about this course of action, too. It’s been a debate for them, so they implored my podcast partner and me to help them.

Watch Colin talking about this on YouTube:

Subscribe to our YouTube channel here to see all the latest videos!

Inflation has been a problem for a couple of years now. At this point, everybody’s dealing with these pricing problems. Everybody’s worried about raising prices so you can keep the lights on. However, customers are also sensitive to increased costs.

For example, England does something that might be helpful here. Our sales tax is called the VAT, which stands for Value Added Tax. However, instead of calculating it at the register, retailers in England put the VAT into the price. I always feel like I am getting a real deal on things when I return to the States and see the prices without the (20%) added VAT.

That said, customers aren’t wild about additional fees either. For example, I took my grandkid to the movies and bought the tickets online. However, as I finished my transaction, I noticed an added processing fee of £3 to the ticket price, around $5. It annoyed me because I was doing all the “processing” work, so why were they charging me a fee?

Of course, the movies aren’t the only ones charging processing fees; Ticketmaster has taken this to a new level. I went to Wembley to see the play-off final of my beloved Luton Town Football Club (back in the Premiership, thank you very much!), and my ticket had a processing fee, a booking fee, and an admin fee. For those of you counting at home, that’s THREE additional fees for Ticketmaster.

There’s a reason that these fees have become so familiar: raising prices is tricky. All of these fees fit under a category of theory called Two-Part Pricing or sometimes Two-Part tariffs. The canonical example would be like a razor and blade model, where you pay one upfront fee for the razor handle, and then you pay an ongoing fee for each blade you buy that goes into it.

Another reason why a firm will engage in Two-Part pricing is that it works. For example, if there are two taco stands selling tacos, and one sells two tacos for $8, and the other stand sells them two for $5 but charges for extras like lettuce, cheese, salsa, etc., so the all-in price is $8 for two tacos, which would you choose? Most of us would go for the $5 taco pair because we see that as the base price and don’t consider the additional fees as part of it.

Ryanair, a European discount airline service, has made a whole airline out of this concept. Sure, the ticket is lower than the competition, but there is an extra fee for everything you do, including processing that ticket. Eventually, they will charge you for a seat, for your share of the jet fuel, and possibly, for the oxygen you breathe while you are there. (I shouldn’t joke; they might!)

Psychologically, we anchor on that base price, choosing it over the all-in price. This behavior encourages firms to keep costs low and charge additional fees to make up the revenue. Customers respond better to split out expenses than an increase in the base price.

We All Wish That Fees Would Go Away

To be clear, the customer would prefer a price cut. They would choose the bundled price to be lower than the base price. No one is excited to pay additional fees, especially when they notice them in small print at the bottom of a ticket or adding up on a sporting event booking online. Fred Reichheld would call these fees bad profits.

From a Customer Experience perspective, I find it challenging to champion telling Williams to add additional fees. What makes them especially bad is that they surprise customers if the costs seem hidden. Discovering a “hidden” additional fee can leave a sour taste in their mouth. Plus, there can be long-term effects on customer satisfaction and loyalty, although there isn’t a lot of research on that.

Remember the taco stands? Most people would probably choose the two for a $5 deal with additional fees vs. the $8 all-in model. However, after getting charged the extra fees, will they come back? Or does the nickel-and-dime experience damage the relationship?

Therefore, regarding Williams’ pickle, it is fair to wonder if they might poison the customer experience in the long term. If it were me, I wouldn’t do it. Not because I have data but because I think we should have a test and assess the long-term effects of additional fees on the experience.

Airlines started charging for checked bags around 15 years ago in the US. Before this, passengers would get two bags for free. So, instead of raising the ticket price, many US carriers engaged in Two-Part pricing by adding a $50 fee for a checked bag. The exception is Southwest Airlines.

Now, Southwest has a significant brand promise about not charging for bags. They recognize that by not charging, they have a competitive difference.

British Airways battles the additional fee strategy employed by its competitors. A calculator shows you what your actual fare will be once you add the extra fees for a checked bag, a carry-on, a printed ticket, etc. The calculator would sometimes reveal that the British Airways fare was lower than the so-called low-fare airline.

And What About the Tipping During a Fast Casual Experience?

The other day I ordered a sandwich and a salad at the counter at a fast-casual restaurant. When it came time to pay, the employee flipped around the screen, asking me how much I wanted to tip, 18, 20, or 22%. Moreover, there wasn’t a way to not tip other than to select “custom” and put a zero.

Seriously?

Tipping is out of control in the US. Tipping in the US has always been more customary than in other countries, but it’s also creeping into more transactions. Not only are the requests for one ubiquitous, but they are also for less service and at a higher rate.

For example, I was at the airport and bought some bottled water. The same thing happened. There was intense pressure to tip this person, but they hadn’t done anything. It was like being charged extra for buying water that I picked up and carried to the counter myself.

From my perspective, this example is another additional fee component. Labor costs are part of running a business. Instead of charging more for the water and covering their rising labor costs, they expect us to tip their underpaid employees to increase their compensation. It’s another form of Two-Part Pricing.

Plus, for those who don’t know, through a tricky loop in the labor laws, most servers and wait staff don’t make minimum wage; it’s around $2 an hour. The expectation is patrons will enhance their compensation with tips. This expectation creates pressure on customers to tip. At some point, we will hit a breaking point. My breaking point might be the 22 percent mark…

The primary difference between tipping and other additional fees is that tipping is optional. The other fees are not. They are part of your bill.

However, when that screen swings around without a “no tip” choice, does it feel optional?

Are Additional Fees Transparency in Action?

One could argue that additional fees are an example of transparency. When the extra fees are listed before the total, customers can see what makes up the overall cost of the transaction.

In the early days of Beyond Philosophy, our consultancy agreement used to break down every single element of our service with a corresponding price. It was a form of transparency for us, and it showed them how we were working for the client. However, we discovered that the downside of listing these fees was the inevitable negotiations they inspired, especially once the client had a competitive bid.

It led to some tricky conversations about us defending our consultancy fees. We spent a lot of time explaining what was happening “behind” that fee and why we needed to charge it.

Therefore, it is transparent to list the additional fees but don’t be surprised if you experience some pushback on them.

So, What Should Williams Do?

I have a couple of suggestions for Williams and his colleague regarding raising prices.

First, Williams should look at pricing from the customers’ perspective. For example, he should have a good idea of what his customers use for a consideration set. If the competition charges $80, plus $20 in fees, they could charge $100 upfront. However, they might lose business because of how customers evaluate baseline prices plus fees versus all-inclusive prices. Their price will seem more expensive, even though it isn’t.

Second, Williams should also consider what’s happening in the industry. If everyone else is taking the additional fees approach, Williams and the company should, too. If it’s unclear what’s happening industry-wide, firms will have more flexibility. Remember, of course, that having a lower baseline price is more palatable in the short term, but there isn’t much research exploring what the baseline price plus the additional fees does to the evaluation of the experience in the long term.

For my part, I don’t like it when it happens to me, and my gut tells me that it will deliver a poor experience in the long run. So, if it were me, I would test the effects of additional fees on my revenue and the experience we deliver. Not charging additional fees and raising prices instead could be the competitive differentiator we could be loud about in our messaging.

So, if you keep the price low and add additional fees, watch what happens in your return business. It’s essential to balance that need to generate more revenue without alienating your customers.

What do you think is better, raising prices or keeping them the same and adding additional fees? I’d love to hear your opinion in the comments below.

Colin has conducted numerous educational workshops to inspire and motivate your team. He prides himself on making this fun, humorous, and practical. Speak to Colin and find out more. Click here!

The post Should We Add ‘Additional Fees’ to Our Pricing to Increase Our Profits? appeared first on Beyond Philosophy.

My two favorite Muppets were Statler and Waldorf. You might remember these were the two old guys that sat on the balcony and heckled the show. However, instead of cleverly improving the comedy of the vaudeville-style variety show in the 70s, I will heckle the restaurant experience. Not only that, but we will also use their example for what not to do in yours.

The idea for this podcast came about because my podcast partner Ryan and I discussed what drives us mad about restaurants and what we might do differently, given the chance. However, when we took a step back, we realized that many of these improvements apply to businesses other than eateries.

The restaurant experience has many behavioral science principles at work. The concepts are sometimes challenging to communicate; therefore, restaurants serve up (see what I did there?) many excellent examples of these ideas at work in customer behavior. So, let’s get started with my first complaint, which is…

Watch Colin talking about this on YouTube:

Subscribe to our YouTube channel here to see all the latest videos!

Some Restaurants Don’t Know The Business They Are In

There is a difference between dining and eating—not just because I am British. Dining is going out for a few hours in a relaxed setting to eat and socialize over an extended time. Eating is far more practical and with a quick turnover. You want to get the food quickly, eat it, and leave.

Also, dining experiences have a lot of specifics, too. For example, it could be a family gathering or a romantic night out. Or the people dining could be foodies that savor the unique flavors and wash them down with different wines. Each of these customer-driven specifics has different expectations regarding the value the restaurant provides. The restaurant should be aware of them and respond in kind.

This concept of being aware of the value you provide through your experience applies to any business. You need to know what job you are doing for your customers to do it well.

Sometimes, restaurants are not aware of their business, the value they provide, or my expectations for the value they provide. I’ve often been to restaurants where food is coming out of the kitchen, but it’s not coming to me. It’s coming out in paper bags as a takeaway. Sometimes it’s unclear if guests in the dining room should have ordered ahead and taken the bags to the table.

The pandemic changed the restaurant business in a pretty dramatic way. Some restaurants figured it out and ramped up their takeaway capabilities. However, now that people are back in the dining room, they haven’t completely figured out how to do both.

For example, there is a favorite takeaway restaurant that my podcast partner orders from regularly that has a large dining room. However, these processes are meshed. So, the person that seats people is also the person that gets your to-go order. He notices that people lined up behind him often have to wait a lot longer while the person goes to get his food. In this instance, separating the two experiences would improve both customers’ journeys.

Restaurants should know what value they provide by the type of restaurant they are, too. Is it a high-end dining experience or a low-end fast casual eat-it-and-go operation? Then, they should send those signals to customers to set the proper expectations.

For example, my wife pointed out that a restaurant she wanted to try near our home in Florida had linen tablecloths. Now, as soon as she mentioned it, I realized that she differentiated that restaurant from others nearby because of the tablecloths. It sent a signal that it would be a high-end dining experience.

By contrast, a different restaurant with linen tablecloths also handed us a laminated menu. To me, this was a mixed signal. If linen tablecloths signal high-end, laminated menus did not. In this case, the menu didn’t seem appropriate for that type of environment.

Speaking of menus, can we please all agree that the QR code menu needs to go? They put the obligation on the customer to pull out their phones, which ostensibly they put away for their dining experience. Moreover, the menu is rarely optimized for mobile, meaning I have to zoom around on a PDF or some other ridiculousness. I read recently that these might be on the decline, which I honestly couldn’t be happier about. They don’t send a great signal to customers and certainly don’t enhance the experience.

In other words, every decision you make sends signals to your customers. So, are you sending the right ones with the various moments in your experience, and are they communicating the values your customers came to you for?

Service Systems That Do Not Put The Customer First

One of the critical interactions in a dining experience is between the customer and the waitstaff. This interaction can set the proper tone for the experience.

However, the wait staff can break the tone of the experience by interrupting a conversation at the table. This behavior is rude in any situation, but even more so when chatting with your friends and family at the table.

This situation reminds me of something our guest Joe Pine said when he joined us recently. Pine made the point that you want customers to consider that the time engaged with your organization is well spent. Interruptions do not encourage this feeling. Instead, they say, “I am ready for you, so please listen to me because my time as the waiter is more important than yours as the customer.”

Another thing that makes me cross with the waitstaff is when the waiter that took your order not 15 minutes ago comes back and asks who had what. Can’t they remember? If not, can’t they write it down or draw a little map on the notepad when they take the order?

These little signals indicate that you are not very important to them. Or they hired the wrong person to be a server in this dining environment. (To be fair, there has also been a labor shortage since the pandemic. Maybe that could go away with the QR code menus!) It’s also indicative of a systems issue. The system they use—or don’t use— is convenient for the staff but doesn’t do much for the customers.

These little things add to customers’ overall perception of good or bad service. When you get to the end of an experience with these hiccups, you likely won’t evaluate the experience as favorably as you would have if they had done a better job with the little things.

Not Providing Enough Distance Between Experiences

We recently went to another new restaurant in Florida, which also made me crazy. The tables were so close together that you couldn’t hear yourself talk. The restaurant wanted to squeeze as many people as possible into the dining room. As a result, everybody tried to talk over you so their dining partner could listen to them.

Some people like this setting, of course. Some customers love the energy of a crowded room. Maybe these same customers will go out on the town or see a show later—the highly energetic (read: crowded and loud) restaurant was what they wanted.

However, other people that wanted to have a conversation, like me, did not want this setting.

My podcast partner has a similar complaint about restaurants that book an act to play during dinner. Too often, the room isn’t great for the performance, and the performer is crowded next to tables that weren’t aware they would have front-row seats to the restaurant owner’s cousin’s new stand-up comedy set or accordion act.

These problems reflect a lack of awareness about what customers want from the experience. If diners value a chance to talk to their dinner companions at your establishment, don’t muck it up with loud acoustics in a tiny box of a room. Further, don’t surprise them with it.

This criticism applies to non-restaurants, too. Know your customers and what they value from your experience. If you don’t, you risk changing it and cutting out the parts they like best.

Not Putting Everything on the Menu

They have the starters. They have soups, salads, entrees, desserts, and kids’ dishes. Sometimes they have the “lighter fare” or the “from the chef” sections. But many restaurants leave some critical things off the menu.

What did they leave out, the wine list? Nope. They had a separate one for that.

The happy hour specials? Nope. Those were on the table tent.

Then what?

They left out the dollar signs. These matter more than you think.

I read an article from Cornell about dining in an upscale casual restaurant. It turns out that customers spend an average of $5.55, or about 8% more when the menu doesn’t have dollar signs on the prices. Leaving those off helps some people forget they are spending money. Dollar signs would make them thriftier with their choices.

My podcast partner wants to see more vegan choices on there. A couple of his kids eat vegan, so they need to know what they can have. However, some restaurants don’t feature this section. This approach shows that these customers with specific food preferences are unimportant to you.

I also like seeing the calories on the menu. These calorie count differences between foods are surprising, and it changes what I order. Now, some customers might not care about the calories. They would see that the dish has more calories than their recommended caloric intake for the entire day and ignore it, which is fine. Others might see the calorie counts and feel annoyed because they don’t want to know how many calories their favorite dish has.

What is essential to take away from this complaint is that many people will eat at a restaurant. Accommodating them with what you put on the menu is critical. It shows that you put their experience first, which is the approach that gets customers to return. Businesses would be wise to segment their offering to make it easier for the different segments of their customer base to find what they need—and show that the organization can accommodate those needs.

So, as the two grumpy Muppets we know we are, that’s our critique of restaurants. However, these things also apply outside the dining establishment arena. We encourage all businesses to consider the answers to the following questions:

• Who is your customer?
• What’s your offering? Are you clear about your offering?
• Are you sending signals that reinforce or detract from your offering?
• Are you clear about where your market is and why?
• What value do you provide to the various customer segments that do business with you?

Now, if you will excuse me, I am off to dine. All this complaining about restaurants has made me quite hungry.

Do you have any complaints about restaurants? Please share them in the comments.

We can help improve your Customer Experience and Marketing and gain growth. Beyond Philosophy has been recognized by the Financial Times as the leading management consultancy for four years. Why not talk with Colin and his team about how we can help you gain growth? Click here.

The post Restaurant Experiences That Drive Me MAD! What Can We Learn From These? appeared first on Beyond Philosophy.

We can be grumpy about the restaurant experience. This self-awareness is key, especially when we realize that our behavior closely resembles the behavior of two grouchy Muppets heckling Kermit and Fozzie from the balcony.

However, it’s easy to see that every business can learn from restaurants that bungle these moments of the experience. 

We are aware this episode is a grumpy rant. Moreover, not everyone will agree with the things that we think restaurants do wrong. What drives us mad could be the very thing you love most. However, the fact we differ on these points demonstrates a critical overarching theme of this podcast: segmentation matters, and accommodation is key to deliver an excellent experience. 

Restaurants that choose to ignore these criticisms have a right to do so. Moreover, if they prefer to cater to a specific segment of customer that prefers the way they do things, that is their prerogative. Some restaurants have been extremely successful by doing this and we do not fault them for it.  We don’t eat there either, but that’s beside the point. 

In this episode, what we hope to achieve by airing our grievances is to point out how these moments in the restaurant experience demonstrate moments that every experience design could have.  For your business vertical, whatever it may be, we hope that the common experiences of dining out—or ordering to go—help illustrate these concepts and help you improve your experience. 

Plus, it sometimes feels good to complain. 

Here are some other key moments in the discussion:

• 03:41 Colin kicks off the complaints by pointing out that some restaurants do not understand the business they are  in, and therefore, do not send the right signals with their experience. 
• 06:39  Ryan describes a restaurant experience that could use a little spruce up in the post-pandemic takeout vs. dine in experience. 
• 11:32 We discuss the importance of managing the key interactions in an experience by properly training the team to put customers first so people remember that experiences can be time well-spent.     
• 16:29  We remind our listeners that the little things add up and can burn you in the customer’s evaluation of how you did at the end of the experience. 
• 19:17 Colin refers to an article out of Cornell that explains how what restaurants leave off the menu cause customers to spend more than they would have thought. 
• 24:30  We summarize what we would change about these things that drive us mad at restaurants and that you can apply to your experience, too.

_________________________________________________________________

Did you know we have a YouTube Channel too? Check it out here.

Follow Colin on LinkedIn HERE.

The post Rant Alert! These things drive me NUTS in a restaurant, what can we learn? appeared first on Beyond Philosophy.

It stinks to wait around for something as a customer.  Whether it’s in a waiting room or a hot sweaty line at a theme park, none of us are usually very excited about waiting around for something. However, it’s a fact of life that customers have accepted over time. 

It also stinks to know that your experience makes customers wait sometimes. You probably would rather that your customers didn’t have to wait around and could get down to business spending money with your organization. However, despite your diligent efforts, you still have some time where customers are waiting around. 

Instead of throwing your hands up in the air and accepting defeat, we have a few strategies that can help manage this bump in your experience’s road. Eight of them, in fact.

Now, to be fair, our tips come from David Meister’s article, “The Psychology of Waiting Lines.”  That said, this paper has excellent tips for you. 

In this episode, we talk about Meister’s eight areas and how you can emulate other organizations that have made the waiting experience a little less painful for their customers.

Here are some other key moments in the discussion:

• 02:37   We explain that sometimes customers have to wait, but it doesn’t have to be terrible while they do, thanks to the paper by Meister that defines what makes waiting so terrible.
• 03:31  Distraction is key and helps with the problem of making your customers feel like their time is occupied with more than just waiting around for you.
• 07:23  We use the examples of customer behavior on airplanes to explain the Meister’s concept about how people want to get started waiting, even if it is only to wait in a new position afterward.  
• 10:49  We explain how Uber manages the third area, uncertain waits are longer than certain waits, well by letting you know the car is coming and when.
• 15:17. We talk about a related area of communication about waits pertaining to Meister’s area that unexplained waits feel longer than known waits and why kids don’t get it.
• 19:18. Unfair plays a big role in how waits feel; just ask anyone in a Disney line watching the fast pass ticket holders blow past them. 
• 27:17 We end on the 8^th area, which is that solo waits feel longer than group waits, because misery loves company, doesn’t it?

_________________________________________________________________

Did you know we have a YouTube Channel too? Check it out here.

Connect with Colin on LinkedIn HERE.

Follow Colin on Twitter HERE.

Click HERE to learn more about Professor Ryan Hamilton of Emory University. 

To learn more about Beyond Philosophy’s Suite of Services Click here.

The post 8 tips to make the time your Customers wait seem acceptable appeared first on Beyond Philosophy.

We will admit it. We have made mistakes in our lives. It’s only natural that some of the calls you make in your journey are going to be bad ones. Believe it or not, we are thankful for them. One learns a lot from one’s mistakes or at least that is the hope.

Some of the calls were good ones, though, and we are thankful for those, too. Perhaps, even we two, like the blind squirrel, can find a nut once in a while. 

One of the great things about having a podcast is that we can share information. In this episode, we share some stories about things that have gone wrong. Our hope is that you can learn vicariously through us without having to suffer through similar pains yourself.  Similarly, we share some of our triumphs, too, with the hope that these success stories might help some of you as well.

Here are some other key moments in the discussion:

• 02:50  Colin shares what he learned about choosing the right companies for his career goals by mucking it up in his 20s with one company worse than the next.
• 07:01 Ryan explains how he learned that loyalty isn’t always a two-way street when he experienced his first layoff at a startup. 
• 10:26  We learn how recruitment is a bit like a fairy tale in that you have to kiss a lot of frogs to find the proper prince or princess. 
• 14:00  We discuss the importance of having a plan rather than crossing one’s fingers and hoping for the best. 
• 17:08  Colin tells us what he would have done differently at the beginning of his consultancy rather than the decision he made that almost bankrupted it.
• 21:28  We both share out successful decisions, from continuing to pursue a degree to establishing a priority for work-life balance to adopting a mindset of continuously learning. 

_________________________________________________________________

Did you know we have a YouTube Channel too? Check it out here.

Connect with Colin on LinkedIn HERE.

Follow Colin on Twitter HERE.

Click HERE to learn more about Professor Ryan Hamilton of Emory University. 

To learn more about Beyond Philosophy’s Suite of Services Click here.

The post Learn from this! The best and worst decision made in our years of experience appeared first on Beyond Philosophy.