Why the hard sell is getting me down

July 30, 2009 by
Filed under: Credit crunch 


I’m on holiday in Crete, so more occasional and shorter posts for a while folks.

We flew over on Easy Jet. No complaints about the basic service; the plane arrived on time and the cabin crew were efficient if a bit bossy. 

We had to be a at the airport by 5.00 am so I had hoped to sleep on the flight. But every time I started to snooze I was woken by a voice on the Tannoy encouraging me to spend some money. During the flight we were asked to shell out for:

headphones for the film

snacks (whose modest virtues were described in ludicrous detail)

booze, perfume and cuddly toys

scratch cards

The idea that my flight is an opportunity for the airline to hard-sell at me for three hours was reminiscent of other recent experiences of consumer capitalism’s aggressive pushiness.

Buying a laptop at PC World the saleswomen was incredulous when I turned down the offer of two months free cover as an incentive to sign up for the store’s service and advice cover. I had to say ‘no’ with increasing insistence for about ten minutes before she shook her head and sighed deeply at my sheer bloody mindedness.

Then a few days later a friend was comparing prices from Virgin and BT to have a broadband package in the home. Leaflets came through the door with attractive and strikingly different all-in monthly prices on their cover. It took a couple of hours of ploughing through the small print to work out that the actual cost was two or three times as much and, if everything was included, the prices were virtually identical.

Consumers are being (a bit) more careful with their money and companies increasingly look to make profit not from the core product (which tends to be subject to a very competitive market) but the various add-ons. Combined, these factors have led to an inversion of the claim companies like to make about their customers. Instead of being  privileged people who deserve to be looked after in return for their service, we have become sitting ducks at which to fire volleys of further offers and demands.

For decades we have been told that the  public sector needs to be more like the private sector. But while my Lambeth Council dustman may not exactly be a ray of sunshine when he takes away my rubbish, at least he doesn’t wake me up to demand I buy scented bin liners and ‘split bags cover insurance’ from him.

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  • http://www.potlatch.org.uk Will Davies

    I couldn’t agree more. But I think there is more to say about this.

    Classical economics (Smith et al) had an implicitly moral respect for the price mechanism, the assumption being that a competitive market would magically lead the price to reflect the ‘real’ value of a good. It lead to prescriptions for how markets should be instituted.

    Neo-classical economics focuses on the psychology of individual choice. It doesn’t have to restrict itself to markets or prices, so long as the individual is being satisfied. Contemporary consumer protection and competition agencies operate with an aggressively neo-classical vision of efficiency – so aggressive that it doesn’t have any a priori commitment to the price mechanism, but only to maximisation of calculated consumer welfare.

    The perverse outcome of this (which your post is an example of) is that consumers become more frustrated because companies no longer just stick to the frigging price. Rather than price the flight at £100 (as Adam Smith would advise) the flight is priced at £50, and the other £50 is made up with tie-ins, opportunities, hassle, cross-subsidies, advertising opps (as Stephen Levitt would advise). Chuck Chris Anderson into the mix, and you get a ‘free’ flight, that we pay for with £100 worth of bullshit we can’t be bothered with.

    The interesting question is whether there will be an extension of the ‘Fair trade’ movement, which effectively is a nostalgic, Smithian appeal for price and value to be reconnected once more. I recently bought a BA ticket from London City at twice the ‘price’ of a Ryanair flight from Stanstead, but because I believed the real price would be the same.

    • matthewtaylor

      Thanks Will. This taken with Michael’s comment above suggests a really interesting debate for the RSA in the autumn.

  • http://twitter.com/rhian777 rhian

    lol scented bin liners! I’ve got to like reading your amusingly dry blogs..! I agree with you completely about the hard sell: you just have to side-step it & go into a different mental stratosphere, or pretend you are from eastern europe etc
    You sound like you need a holiday.. hopefully you’ll be so chilled out on the way back you won’t even notice- There will be loads more stuff to rant about in the autumn..
    i’m a grumpy old woman (sometimes) so i know what its like..

    • matthewtaylor

      ‘Amusingly dry’ – that is such a nice compliment Rhian. A truly ‘grumpy old woman’ surely wouldn’t take the trouble to be so nice? Thank you

  • http://jujustatue.blogspot.com/ Michael Story

    This is an example of a much more disturbing trend. Classical economics describes prices as being progressive. The theory says richer people with more time constraints will not want to shop around- they’re happy to pay more for the convenience of an instant purchase. Those on a budget who check in several shops, collect coupons, choose a time when there are sales on to buy their items, etc will pay less for their goods, but spend some time doing so.

    Nowadays the internet allows for price comparison so easily that almost no-one is rich enough that it isn’t worth their time to shop around. Instead of rich people paying a high price because they’re in a hurry, ignorant people are paying more because they’re locked out of price comparison, or they’re less resistant to high pressure sales techniques. Payment protection insurance and extended warranties play on the loss aversion anxieties of the uneducated, while usurious interest rates exploit mathematical ignorance.

    Time to end the digital divide?

    • matthewtaylor

      Thanks Michael, along with Will’s great comment below we have an interesting territory for the RSA to debate in the autumn methinks.

  • http://www.fil.ion.ucl.ac.uk/~bseymour/index.html Ben Seymour

    Airlines are good at marketing. For instance, we all know about placebo effects on value – your wine tastes better if you pay more for it and so on. The theory behind this is that we use prices to help make an inference about quality, especially if we’re a bit unsure. But some airlines play a more subtle trick, since they know people also want value for money. Thus we reason that if service is poor or non-existent, perhaps this is because our ticket prices have been cut to the bare minimum? After-all, what was the real reason for Ryaniar famously contemplating a £1 charge to use the toilet?

    Ben

    • matthewtaylor

      Nice point Ben. Maybe we can add the neuro/behavoural science perspective to the debate I propose below

  • Niall Smith

    I think i’ve been on an easyjet flight with this man. If so then i think honourable mention should be given to the almost relentless monotony of his voice.

    Trying to ignore it was like being in a fight.

    • matthewtaylor

      If you mean me Niall I can plead ‘not guilty’. Being a nervous flier I try unsuccessfully to sleep throughout so I hardly say a word. But do tell me more about your monotony man

  • http://jujustatue.blogspot.com/ Michael Story

    This would be fantastic.

    There are so many myths about internet use and the redistribution of power, but the reality is that any resource that is free and publicly available is most going to benefit those with the time and skills to make use of it.

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