With so many companies under pressure to raise revenue, I am constantly amazed at how poorly companies treat their customers. I firmly believe there are good profits and bad profits. Bad profits are those that raise your revenue, but will end up costing you more in the long run. I believe the airlines are headed in that direction. “Nickel and diming” people may generate incremental revenue in the short-term, but at what long-term cost?

My 6 year old son and I ran into just that situation on Sunday while shopping at a local mall. I was going to get an order of pretzel sticks from Auntie Anne’s. Knowing he would be thirsty, in addition to ordering the pretzel sticks, I asked for a glass of water. I proceeded to watch as the cashier rung up the pretzels and then added a 47 cent charge for the water. When I enquired about the charge, she said “They charge for water on weekends”.

Excuse me? First off, I would argue that 47 cents for a cup is a bit ridiculous, especially to charge a customer. But that aside, you only charge on weekends? Why? Because you have more people in the mall and figure you can get away with it? This may very well be the definition of bad profits. Yes, they probably get additional revenue (only on weekends though) from charging for water, but at what cost? I ended up walking away without buying anything, which means they lost at least one sale.

While I would still think its ridiculous, if they put up a sign saying they were going to charge for water, then at least they’d be consistent. But only charging on weekends seems to me to be a ploy to simply make more money - not recover costs.

You might think I’m over-reacting since it was only 47 cents - I would argue that’s not the point. Being in the customer service industry myself, I will not (knowingly) purchase from companies that don’t get “it”. There are too many companies that know how to treat customers - Why would I want to give my money, even 47 cents, to those that don’t. I simply went to another place in the mall and was happily given a glass a water to go along with his snack.

Treating customers well and making them happy is the absolute best way to increase revenue - not by “nickel & diming” them.

Steven Winokur is a branding consultant and President/Founder of Turning Point Strategies

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