How Not to Win New Clients

Marketers have trashed the term "luxury" so thoroughly that it ought to be retired. Yesterday's Wealth Report cites a speech on the subject by Andrew Sacks.

Those who aspire to delivering luxury-level goods and services should start by respecting their customers, Sacks told a gathering of hoteliers in Monaco.

One way to add value, Mr. Sacks said, is to give more away. Even though wealthy guests can well afford it, don’t charge them for Internet use, bottled water, shoe shines, or laundry service.

On NPR this morning, Bob Sullivan, author of Gotcha Capitalism, discussed the epidemic of nickel-and-diming (more accurately, five-spot and ten-bucking) that has broken out at hotels and airlines and spread, alas, to banks.

From hotels to cell phone bills, companies attach a barrage of hidden, extra charges. One reason is the Internet. Online shopping permits consumers to comparison shop for bargains. So companies are countering low prices with hefty fees. So if a $99 room is snagged at a nice hotel via Priceline.com, then the hotel tends to attach a "resort fee" for towels at the pool or removing something from the mini-bar – even it [sic] put back 60 seconds later.

Some banks now make more from fees than interest, Sullivan asserted. And he wasn't referring to basic fees for checking accounts or trust service. For a link to his radio interview, go here.

Multimillionaires are accustomed to paying generously for superior services. But I bet even Warren Buffett hates to be nickeled-and-dimed.