For the Long Run

By BusinessNo Comments

A couple of good articles by Jason Kottke “Asking ‘who’s the customer?'” and a follow on from John Gruber “On the Long-Term Viability of Apple’s Customer-First Strategy” that are worth reading. They both have interesting comments regarding the Church of Maximizing Shareholder Value and how that undermines serving customers well.

Jason Kottke seems to characterise the “big investment banks, mutual funds, and hedge funds who buy their stock” as something completely removed from customers. But he doesn’t go quite enough with his logic. Those entities have their own customers, be they individual retail customers buying mutual funds or institutional customers like pension funds that are paying out to their customers, like the average retired teacher, civil servant, or factory worker (if the pensions are properly funded that is, but that’s another story…). So it goes full circle and perversely this customer pressures the mutual fund (by voting with their money) or institutional investor to perform, and they in turn push on companies to maximize shareholder value by making changes that aren’t necessarily in the interest of  the person who started the whole thing.

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Rebranding the Fuel Surcharge

By PricingNo Comments

I was shopping for a flight to London Heathrow in December and noticed that with the rapid drop in crude and fuel prices last Fall, Air Canada quietly rebranded their Fuel Surcharge to “Carrier Surcharge”.

From Air Canada’s site under International (emphasis mine):

Carrier Surcharges: Carrier surcharges are included in the Air Transportation Charges and are collected by airlines to partially offset certain volatile, unpredictable or fluctuating operating costs and fees, and certain fare Premiums linked to peak travel periods. These carrier surcharges can be used to offset some (among others) of the following costs: fuel, navigational charges, or select peak travel dates to/from certain destinations.

It’s not just about fuel anymore, you see? It’s about managing “fare Premiums linked to peak travel periods”! Which sounds a lot like increasing our prices when demand is high. Didn’t that used to happen by changing fares?

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