You Can't Handle the Success!

What do Wal-Mart and Home Depot, two of the world's largest retailers have in common?

Everyday low pricing.

Early on, Sam Walton figured out that it cost him a LOT of money to put on sales. Aside from the price changing (and changing back, after the sale), there were sales rung up at incorrect prices, causing customer complaints, etc.

He felt that a much better business model was to adopt everyday low pricing. He didn't make a secret of it. He just did it. Everyday low pricing became Wal-Mart's manta. All the employees know it. All their customers know it. It works.

Home Depot was born and initially grew through "loss leaders". They'd make HUGE bulk purchases and stack the product high in the aisles. Customers couldn't help but trip over the sales. But early on, Home Depot executives made a visit to Bentonville, Arkansas and were convinced to change course. Adopting everyday low pricing helped create the largest Home Improvement chain in the world.

So here's a question to my phone company and my cable company.

Why wouldn't it work for you too?

Communications companies have created a tremendous amount of "busy work" for themselves, churning customers like crazy. There's a whole customer sub-culture out there, who threaten to leave every six months or so, and are granted the latest promotional price. Last week my neighbor threatened to leave Time Warner for Direct TV and instantly received a $40/month discount off his bill. Almost a $500 annual savings! These companies assume that this activity is simply a cost of doing business. A cost they build into their pricing. A cost we, as consumers, pay for.

Perhaps it's time to stop the insanity! Imagine a world where all of Time Warner's customers were paying the same (lower) rate.... A world where AT&T had two or three standard service plans that didn't change from week to week.

Imagine the impact on customer goodwill if these companies actually moved you to the plan which benefited YOU the most, depending upon your mix of services - instead of penalizing customers who happen to "go over" their text message or primetime minutes? Imagine a world where your phone bill was 1 page long.

I don't think AT&T or Time Warner could handle the change. Or the success.