Contracts, Penalties and Fees
Gail McGovern and Youngme Moon explain in an article "Companies and the customers who hate them" (HBR June 2007) how many industries (cell phones, credit cards, banking, insurance, leasing) are using negative forms of relationship marketing by profiting from customers' confusion, ignorance or poor decision-making to establish various kinds of contracts, penalties and bleeding fees. Unfortunately these strategies are often very profitable, until eventually a customer-friendly competitor arrives on the scene, with an offering that puts customer satisfaction and transparency first.
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