There have been a few separate things that make this a good question to consider –
- Publishers increasing their prices via the Agency Model.
- Amazon and Penguin continuing their stand-off.
It’s interesting to see how customers’ attitudes change and the point at which they start switching and leaving.
Companies can get away with incremental downgrades to an extent
The first thing that’s becoming very clear is that you can get away with small changes –
- If the price increase is tiny or done incrementally it mostly goes unnoticed.
- If the user inconvenience is increased a little bit users tend to learn to live with it.
- If user rights or privacy is reduced a little bit users don’t mind.
There are a small portion of users that do make a big hue and cry – However, there isn’t a big uprising and very few, if any, users actually leave.
Large Changes are not received well
A big change like the Agency Model where prices go up dramatically does not go over well.
$9.99 to $14.99 is an inelegant price increase. If Publishers had done incremental changes from $9.99 to $10.99 to $11.99 in a few years they could have hit $14.99 easily. This also brings up the fact that Publishers probably want to create a HUGE shift. They want to make ebooks very unappealing and there’s no better way than to attack the biggest selling point i.e. the $9.99 price point.
There is a breaking point – It’s further away if you make incremental changes
Various groups of users have various breaking points. They react very differently to reaching this breaking point based on how we get there.
Consider a group who’s breaking point for privacy is that their list of friends gets shared.
- If Facebook (or another company) does changes incrementally then when this point is reached it’ll be a small change. Earlier everything except friend’s list and personal contact information was shared. Now everything and friend’s list is shared. While it may be the user’s ‘limit’ or ‘breaking point’ it’s such a small change that it doesn’t carry as much impact.
- Note that in addition to not carrying impact it’s a compliance chain. Every little change that eroded privacy and that users agreed to – because it wasn’t such a big change – made them more and more compliant to exposing themselves.
- If on the other hand Facebook went from very private to sharing everything including Friend’s List (and only leaving personal contact information untouched) then we would have had people protest in huge numbers and leave Facebook in droves.
Try it with a friend – get them to do little things for you and then ask for a big favor and they will do it even if it’s something they don’t want to – Could I borrow your pen? Could you please lend me a dollar? Could you lend me your car?
It’s used in sales all the time and they call it compliance building.
Users tend to give their trusted company the benefit of the doubt – to a surprising extent
There’s another element here which is very interesting.
If a user loves a company and trusts it the user is very, very reluctant to ever attribute anything bad to it. This is why one of the best strategies for companies is to do lots of ‘good’ things like donate 5 cents per product to the environment and build up a store of credit.
Then when they do something ‘evil’ that huge store of credit built up from seemingly trivial (and actually trivial) things like their donations and various small good deeds excuses them.
Of course, the store of trust applies to really customer-focused companies too. Take a company like Zappos (now owned by Amazon) that has amazing customer service. If they make a mistake they will often get the benefit of the doubt.
Whether it is earned through real, tangible excellence (great customer service, great products, great prices) or imaginary things (5 cent donations, claims of being environmentally friendly without doing much) the Trust and Goodwill built up are powerful and can be used –
- To do ‘evil’ and get away with it.
- To get away with genuine mistakes.
Closing Thought – Incremental Downgrades vs Huge Swings
Facebook’s gradual slide towards killing privacy indicates it was well thought out and they do fully intend to expose all user information.
Publishers’ huge shift in prices indicates that either they didn’t think it through or they did and intended to kill ebooks.
The Penguin fiasco is interesting – it’s a gradual shift since users expected a decision in a few days as in Macmillan. However, it’s dragging on and lots of Amazon customers are beginning to reach the end of their patience.
Perhaps it’s a huge issue holding up the negotiations. Perhaps it’s not. Amazon needs to reveal the details soon – otherwise customers will start assuming it’s Amazon’s fault and start leaving. In fact, Amazon have already delayed this too much – It’s beginning to actually hurt customers and that’s simply unacceptable.