What actions by companies do customers consider unfair?

I found Richard Thaler’s article on Customer Outrage thought provoking, particularly in light of the recent Netflix and Bank of America customer outrage setbacks. Please note particularly:

“For hints about how to avoid the consumer backlash, the bank’s executives might have consulted a paper I wrote in 1986 with the psychologist Daniel Kahneman and the economist Jack Knetsch. The central question was this: What actions by companies do people consider “unfair”?

Our method was to ask randomly selected people some simple questions by telephone. Here is an example:

“A hardware store has been selling snow shovels for $15. The morning after a large snowstorm, the store raises the price to $20. Please rate this action as: completely fair, acceptable, unfair, [or] very unfair.”  Some 82 percent of the participants called it either unfair or very unfair.

Such judgments are puzzling to economists, business executives and M.B.A. students. I have posed the same snow-shovel question to students in my course on managerial decision-making — and only 24 percent have said that raising the price is unfair.”


About Arie Goldshlager

Customer Insight, Customer Strategy, and Innovation Consultant
This entry was posted in Customer Complaint, Customer Insight, Customer Retention. Bookmark the permalink.

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