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How a $4 fee costs a company $4,000

You’ve heard this story before:

New York hotel charges a $4 fee to receive an overnight envelope for a guest. And they won’t bring it up to the guest room. And they’re rude about it.

So the guest moves an upcoming family vacation to another hotel (3 rooms x 7 nights). And the guest’s spouse is an event planner, who puts the hotel on the yuck list for future conferences and company travel. And the guest goes to a big conference the next day and tells the story to everyone (not to be mean, just making conversation). And the guest adds a bad review to TripAdvisor.

Guest is the key word here, and anyone in the hospitality business who can’t get their head around the idea of being nice to your guests deserves to fail.

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Comments

  1. Doug June 27, 2012 at 9:20 am #

    But hey, they increased the profit on that initial stay by $4! You want fries with that?

  2. Ted June 27, 2012 at 11:34 am #

    Just goes to reinforced the importance of not worrying about “who” the customer is. That they’re a customer is more than enough… Everyone has influence, every bit of influence is the potential for positive or negative.

  3. Grant Hensel June 27, 2012 at 1:54 pm #

    Your story hits on the single ‘big idea’ that companies today need to grasp: Scalability.

    Everything scales today – a few great programmers can create apps used by millions, a few friends can start a hurricane of positive or negative publicity, and people can talk to each other at scale through social media.

    The boundary beneath which actions can be deemed ‘insignificant’ is getting lower all the time.

Trackbacks/Pingbacks

  1. Greg Verdino » What’s the Price of Five Dollars? - August 16, 2012

    […] This post by Andy Sernovitz got me thinking about how many companies are penny wise but pound foolish — and why, more often than not, that mindset is bad for business over the long haul. That, in turn, brought to mind a post I wrote a couple of years ago when a company I’ve had a reasonably long-term relationship with and how their penny wise thinking caused me to question my loyalty. Here’s an oldie but goody that is as relevant today as it was when I first wrote it. […]

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