Are AT&T and Redbox Alienating Customers Similar to the Bank of America and Netflix Fiascos?

Recently, I noticed AT&T following a trend much like NetFlix - citing continued and/or unusual growth as a reason for raising prices. As well, some banks, such as Bank of America, also recently have tried to raise additional revenues by adding new fees to previously free or low-cost services, such as use of debit cards. The banks were trying to use government regulations and changes in laws as justification for charging millions of customers $5.00 per month to use their own debit cards. The legislation cited by the banks is the Durbin Amendment. This legislation caps debit card "swipe fees" that banks can charge merchants per each debit card transaction. Previously, banks were charging retailers up to 44 cents for each card swipe. The Durbin-Dodd-Frank legislation capped these fees at between 12 and 22 cents, plus a small additional stipend for fraud. What many people fail to realize is that it was the retailers themselves - Wal-Mart, for example - who requested that the "swipe fees" be capped.

Debit Card Transactions, as Regards Technology, Now are Cheaper than Ever

Technologically speaking, the cost of making an electronic debit transaction, now should be less expensive than ever, for both large and small companies to process the same transactions that were considerably higher only a few years ago. In addition, improvements in technology should have driven down the cost of offsetting fraud as well.

What Does it Take for a Company to Realize and Admit it is Alienating its Customer Base?

When customers flee, such as in the case of NetFlix raising its prices and unilaterally changing its distribution and delivery models, without customer input; it signifies that the company is alienating the customer. This same type of thing happened with Bank of America customers, regarding the planned $5 per month debit card fees. It happened also in the not-too-distant past, when Facebook tried, unilaterally, to implement a new user profile design, without giving customers any advance notification or choice; without soliciting customers' feedback. And now Facebook, with its new "Timeline" and related changes is, yet again, risking alienating a large contingent of its user base.

Company Loyalty to the Customer Just as Important as Customer Loyalty to the Company

When any company imposes at-will changes, disregarding the customer's desires, such actions give the customer (or "end-user") a feeling of being unimportant and insignificant. This alienation ultimately leads to abandoning the company's product or service, with loss of loyalty and plenty of frustration. Any initial customer loyalty or "goodwill" is now lost, without much hope of recapture. The same thing happens, even if a company allegedly "researches" its price hike, as was the case with the recent RedBox/Coinstar price increase from $1 to $1.20 for a standard one-night DVD movie rental.

Finally, in considering the important factors of CRM (Customer Relationship Management), customer retention and brand loyalty, any company should realize that "company loyalty to the customer is just as important as customer loyalty to the company." Such loyalty includes minimizing major changes that have not undergone thorough customer review; as well as maintaining current (legacy) pricing, distribution and delivery models as long as possible; before implementing such changes (even if operating expenses must be trimmed to forgo price hikes). This holds just as true for free social sites such as Facebook, as well as fee-for-service providers such as AT&T and Redbox.