Apparently the executives at Spirit Airlines are not familiar with the research of Daniel Kahneman and Amos Tversky. They demonstrated years ago that they way you frame choices impacts people’s decisions.
I think that Spirit has made a strategic error in the way that they have framed the issue of “carry-on baggage.” On TV this morning Spirit CEO Ben Baldanza reaffirmed that airline is moving ahead with its carryon bag fee of $45.
Why is the business community obsessed with punishing customers? A fee is a punisher. It decreases behavior. Who in their right mind would want to punish their customers? Think of the difference in the reaction from the public if the choice had been presented as, “Those passengers without carry-on luggage will receive a discount of $45.” Increase the fare $45 and the economics is the same. I personally hate to stay in a hotel where the room may cost $250 and then have them offer bottled water for $5. I would rather pay $255 and have free water.
Customers love to save money and hate fees of any kind. If you think positive, everyone wins.
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