A dozen years or so I managed a project where we were replacing a 3-year-old telephone banking system. Why were we replacing it after only 3 years? The customers loved the system and flocked to it, we were running out of capacity ... but the manufacturer - Unysis - had rather rudely stopped selling the hardware.
Did I mention that the customers loved the telephone banking system? The bank loved it too because it got customers self-serving themselves ... and they didn't have to employ so many branch staff.
It was free. But it paid for itself many, many times over.
Our competitors, on the other hand, charged their customers a (relatively small) fee to use their telephone banking system ... so most of their customers continued to do their time-consuming but low-value transactions in the branches. People are funny like that.
Those other banks had "sub-optimised" their profitability by making the Telephone Banking system a profit centre.
Now skip forward 12 years ...
Greg Fraley, Author of Jack's Notebook, writes about how Cineworld did refund the cost of a movie he couldn't see (due to a fire at the cinema) but wouldn't refund the transaction fee (which he had to pay because he booked online):
I would have to call the corporate help line for that. I didn't make a fuss, I took the partial refund ... Later, while eating sushi, I realize that I now hate Cineworld for not giving me a full refund.
Greg went on to suggest several ways that Cineworld could have turned the unfortunate incident into a positive experience for their customers.
I'm on Greg's side ... and I too hate Cineworld.
They're my local cinema and if I go to a movie which might be popular I always have this little debate with myself - should I pay their miserable little "transaction fee" so that when I get to the cinema I can get my ticket quickly from the queue-free ticket issuing machine OR should I save myself a tiny bit of money, go to the cinema and wait in their long, long queues?
Oh what a dilemma - and all because I resent having to pay a miserable little fee to book online. I think the fee might be 25p. The ticket issuing machine never, never, never has anyone else using it when I get there so Cineworld must regret ever setting up their online system.
How many more people would buy online (cheap for Cineworld) if there was no transaction fee?
How much money could Cineworld save if people bought on line and they didn't need to employ so many staff to sell tickets in their cinema?
I wonder how much happier their customers would be.
I wonder how much more money they would make.
It's not a profit centre if it makes you lose money as a whole.