Nickel and Diming Customers Backfires


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As we all know, the customer experience is made up of hundreds of
little touchpoints with a company, its products and its partners. But not
all touchpoints are equally important in deciding whether the experience is a
good one. One critical touchpoint is how, how often and when you pay for
the product. Badly designed payments touchpoints can all too easily lead to
unwarranted pain, an unsatisfactory experience and customer defection.

As Sampson Lee reminded us in a recent post, ‘pain’ is a difficult concept
for experience designers. Recent research in neuroscience tells us that customers prefer to pay in small increments, preferably later and through mechanisms like credit cards where cash doesn’t actually exchange hands. But this doesn’t mean that a constant stream of small non-cash payments won’t accumulate into payment pain, particularly when the customer thinks they are unfair. Or worse, that they have already paid for the product.

Princess Cruises is currently under fire for ‘nickel and diming’
customers in this way on its cruises. Customers pay thousands of dollars for
all inclusive cruises, which as the name suggests, includes practically
everything you could ever want onboard a cruise. Recently, it has started to charge
customers a dollar here for coffee, one dollar seventy five there for ice cream and
so on for lots of things, things that customers thought were already included in the
price. And that were included in the last cruise they took. And the one before that.

On a long cruise this can easily add up to 50 dollars or more.
You wouldn’t have thought a few additional charges on a cruise costing thousands of dollars would cause so much outrage. Apparently it has. And it has generated a lot of bad press too. Princess Cruises is in real danger of loosing loyal customers whose travel budget might extend into the tens of thousands of dollars each year. All for the sake of
“nickel and diming” customers out of a few dollars of chump change.
All because they completely failed to understand the psychology of paying.

What do you think? Is Princess Cruises inflicting death by a thousand small
charges on itself? Or shouldn’t rich customers complain in these inflationary times?

Tip of the hat to the Neuromarketing Blog.

Post a comment and get the conversation going.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

Further Reading:

Neuromarketing blog on Princess Puts Pain into Cruising

Neuromarketing blog on The Pain of Buying

Graham Hill (Dr G)
Business Troubleshooter | Questioning | Thoughtful | Industrious | Opinions my own | Connect with me on LinkedIn


  1. I think Princess Cruise is way out of line for doing this. Customer’s probably aren’t even complaining about the cost, it sounds like most were upset because the cruise line didn’t tell them of the changes. This sounds all to familiar with the last several customer service interactions I have had with companies. I feel like companies are cutting the service life line way to quickly. I recently watched an interview that talked a lot about this. It is with Fox Business and the president of Mindshare. I feel like he made some very relevant points.

  2. Thanks for the comment.

    This is the second comment on recent blogs to mention the wisdom of Mindshare’s President, Richard D Hanks. He seems to be an interesting thinker in business today.

    Here are some more of his approach to customer-centric business:

    Richard D Hanks on CRM Talk Radio

    Listen & Learn: Improving Operations by Utilising Customer Feedback

    The Platinum Rule of Service

    Richard’s Book ‘Delivering & Measuring Customer Service’

    Mindshare Technologies

    Thanks once again.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager


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