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    « Where is the Construction? | Main | We Are a For Profit Business! »

    October 27, 2006

    Charging for Digital Services

    There has been a lot of focus on “charging for digital services”.  As the market becomes commoditized and margins get squeezed reprographers must find other ways to increase margins.  Look at the travel industry.  This industry has faced rapid commoditization because of online tools like Expedia, Hotels.com, and Priceline.  They have found new means of making money.  The bulk of the profits in hotels no longer come from renting rooms.  It comes from the incidentals: minibar, movies, video games, etc.  I’m currently on an airplane and the flight attendant just asked me if I’d like to buy a meal for $5.  Sure - some people complain they don’t get free food on flights anymore, but as a consumer is it really that bad.  The food was never that good to begin with.  Now that it is optional the food is much better.  There are some times when I’d rather eat before or after a flight.  If making meal optional can help airlines stay in business and offer me more options, I’m all for it.  As you walk down the path of charging for digital services, below are a couple suggestions:

    1. Sometimes you need to tactfully remind your customers that you are a “for profit” business.
    2. Choose chargeable services that are optional for the customer.
    3. The first priority should be to condition your customer - increasing your profits will come later.
    4. If you believe new charges will create issues with existing customers find ways to minimize the “shock”.

    I will elaborate on these suggestions in subsequent posts.

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