There is a vital lesson buried in the August 19, 2009 Jet Blue announcement that they were suspending sales of the $599.00 “All You Can Jet” promotion they’d debuted only seven days before. Any student of Behavioral Economics could have predicted that an “all you can eat” approach would inspire vastly different behavior than if Jet Blue had charged a lower fixed fee plus $1 per mile. Similarly, over a decade ago when AOL switched to a usage-independent flat price, connection time increased four times more than they anticipated.

“All you can eat” is an entirely different price than “very, very cheap.”

Traditional economics says that lowering the marginal price from $2 to $1 should have a similar effect to lowering it from $1 to $0 — but experience and experiments have both shown that the traditional demand curve acts in an odd manner when we reach $0 marginal cost. Jet Blue’s executives should have known better. But the Jet Blue management team is not alone.

Many executives assume their customers are more rational than they really are. For example, most leaders believe in enhancing the options given to customers, but increased choice can actually freeze decision-making by overwhelming the shopper. Excessive options is a key reason that an average of 60% of all online shoppers abandon their purchases mid-stream.

In August 2005, Jonathan Coulton quit his job as a software developer, with the goal of conducting an experiment: over the next year, could he figure out a way to earn a living as a full-time musician, leveraging the Web and his small-but-passionate fan base?

On the far edge of a bustling new city center, a neighborhood boutique sells intimate apparel to a dwindling, but dedicated customer base. As part of its efforts to keep customers aware of their signature advantages over the chain stores, the shop works closely with each client to ensure a custom fit, a service for which they charge a nominal fee. One day, two new potential customers arrive: young friends, one of whom is bringing the other to the shop to select undergarments for her wedding day. The …

In 2008, entrepreneurs Chris DiMambo and Keith Dupuis sought to upscale the Main Street Grille, a sports bar and family style restaurant in Weymouth, Massachusetts. Their $48,000 risk–in seemingly positive changes that included an expanded menu, flowers on the table, linen napkins, and even new salt and pepper shakers–so angered local customers that, after 9 months, the pair had to acknowlege a flop. Disheartened by the empty seats, angry customer letters, and a 15 percent drop in revenue, the two look back in this MSNBC video to what went wrong.

Over the years, I have noticed that most bad clients seem to fall into certain common patterns. In this post, I share those patterns with you. Keep in mind that none of these bad client types are specific to any one client that I’ve ever worked with. Rather, these examples are a generalization of the many different characteristics a bad client can take. Personally, I rarely ever have to deal with a bad client in my business, and I’ll explain how you too can avoid them later on in the article.

Wow. I’m humbled by the commentary from my first post. I hope I can maintain such passionate interest!
Businesses cannot exist without customers, so it’s sadly ironic that many, if not most, businesses, actually understand so little about them. As a company grows, a smaller and smaller percentage of the staff interacts with the customers. In fact, those folks on the “front line” (think call centers, service counters, retail stores) are typically among the lowest-paid and have the least authority.
Meanwhile, back at headquarters fundamental decisions are made with extremely limited information …

Q: Help! I own a small consultancy business. A new client e-mailed me a few days ago but the message ended up in my spam folder, as did her follow-up. Now she won’t return my calls. How can I get her back? — Aaron
A: You probably can’t.
The new client concluded, fairly or unfairly (but fairly, I think) that if things are going wrong already, at the start of your working relationship, it does not bode well for work down the road.
But I suggest that a bigger issue is at play, …

Want to know the #1 reason your customers don’t recommend you to their friends? It isn’t because they don’t like your product, or because they don’t care or are too busy. The real reason is either because you don’t ask them to, or you don’t make it easy for them to do it. If you ask them in the right way, however, the word of mouth referrals and additional business you can get from the experience will easily be more powerful that just about any other advertising or marketing you …

Establishing ongoing relationships with customers enhances the long-term success of most small companies. It’s more cost-effective and a lot less stressful to serve ongoing accounts than it is to continually search for new business. Cash flows are more stable, and increased operational efficiencies can reduce internal costs, increasing profitability.
To secure a long-term customer, sales personnel need to “look beyond the sale.” They need to form a relationship with the customer, solving all of the customer’s needs and providing ongoing value of products and services.
The basis for establishing such a relationship …

It’s a great way to keep your business moving forward in any economy.
Let’s not sugar-coat it: It’s looking pretty darn ugly out there. I’m no economist, so I’m not about to predict the markets or the stability of the economy, but I am an internet marketer, and what I can say–with confidence–is that a downturn in the economy does not have to be a major roadblock for your internet business.
One key to surviving–even thriving–during this period of uncertainty is to know your customers… read more at 5 Steps to Customer …