By Joe Palumbo
In the past perks were thought of as an employee and not general customer incentive. Complimentary meals for restaurant workers, free or reduced flight privileges for airlines staff, cost-free cable service for cable company personnel, and retail discounts for department store employees to name a few.
But in today’s tough economy a shifting is in place. We are witnessing the era of a transfer of employee perks to customer perks. Business sectors are directing attention to “perk marketing” in going all out to please the consumer in order to retain their present customer base and gain additional market share.
Fast food chains like McDonalds are wooing consumers with lower prices and new food choices. Automobile dealerships are offering interest-free financing with rebates as well. Retailers have become active in sales competition. With most retail outlets everyday is a sales day. Retail clothing outlet Express just had a mailing campaign in which it distributed $15 d gift certificates. Pathmark offers an occasional 10 percent incentive discount off an entire grocery purchase as a reward to its loyal customers.
Remember the old days when you waited until after Christmas for half-price sales? Now you get before, during and after Christmas day sales. Supermarkets offer free turkeys at Thanksgiving time just for shopping in their market.
But one industry is bucking the trend. The airlines industry has decided to play hard ball. Major American carriers have decided to raise their airfares along with other user-unfriendly activity.
US Airways has not only stopped its free food service but now charges $10 for a sandwich. American Airlines decided to reduce the legroom afforded to passengers in economy class sections. And several carriers have also decided to raise the number of frequent flyer miles you need to get a free trip.
I gave United Airlines a call to find out what’s doing only to get a recording to call back later due to the high volume of calls. It appears that they are not too worried about losing business to their no-frills competitors who are doing just the opposite.
In speaking with David Neeleman, CEO of Queens-based JetBlue Airways, he said to me: “Our priority is customer satisfaction.” That appears to be the main ingredient in its successful profitability that continues to elude the larger carriers.
So how’s business in the area of perks? What business needs to learn and know is people don’t care how much you know until they know how much you care.
Joe Palumbo is the fund manager for The Palco Group, Inc. and can be reached at palcogroup@aol.com or 718 461 8317.
