You see it everywhere, so it must be effective. So many companies offer a range of different promotions, all of which are designed to lure customers into their fold, attracting them away from suitable alternatives and competitors.
With cell phone companies, you oftentimes see the offerings of free or severely discounted (subsidized) mobile phone handsets in exchange for lengthy service contracts. With home Internet service, you can oftentimes see a promotional rate that is only good for the first six months, after which the “regular price” is substantially higher. They bait you and then they make the switch.
Is this ethical? On the one hand, it is very attractive to see promotional prices that are substantially lower than the regular price of the next competitor, but it is very upsetting when the promotional price ends. This is especially true of consumers who don’t bother to look up what the regular price will be at the end of the promotional period, particularly if they lock themselves down into a multi-year contract.
Should the “regular price” be more prominently disclosed up front? Or is all fair in love, war, and marketing? Should the onus fall on the consumer to perform the suitable research needed or should the responsibility fall on the businesses to offer full disclosure?
Todd Dailey
August 22, 2010 7:38 am
This is not a correct description. “Bait and Switch” is a form of fraud and is prohibited in Canada under the Competition Act. It’s the dishonest practice of advertising a product which isn’t truly available for the advertised price. It’s meant to bait people into a store so they can be switched to a different product.
Telephone and Internet promotions that offer discounted, short-term rates in exchange for longer contract commitments aren’t unethical, in my opinion. It’s a fair form of give & take where the customer gives something (contract commitment) in exchange to get something (discounted rates). The smart customer will do some math to determine what the average monthly cost of the service will be over the term of the contract, taking both the discounted rates and full rates into consideration.
Personally, I am discouraged by this kind of marketing from telephone, Internet, credit card and other industries. It concentrates solely on acquiring new customers without giving attention to keeping customers. I’m more attracted to companies that reward customer loyalty.