Wednesday, December 28, 2011

Hidden Charges = Short Term Strategy

I simply hate it when sales guys explain a deal that sounds very attractive, however later one finds himself duped because of all the hidden costs. Of course, they are sales guys and they would try to sell but I believe that such strategies are short-sighted. If I take a deal but later feel cheated, I will always think before using the services of the company in future. Moreover, whenever I speak to anyone about my experience, I won't have good things to say about the company. 

In today's competitive environment, companies do not only want to have a new customer but they remain more interested in repeat businesses. As repeat businesses prove to be less costlier. You are selling the product/offering to a customer who is already sold to the idea. However, if your new customer feels cheated about the experience, he/she is unlikely to come back unless your product/offering is head and shoulders above the next available option. Moreover, the customer is likely to spead negative publicity and no company wants that.

I will share an experience that I had a few days back. We brought some stuff from India to Kuala Lumpur and used MASKargo for that. MASKargo is a logistics company that is managed by Malaysia Airlines. Now, if you are carrying any extra baggage in the flight, Malaysia Airlines charges INR 600 per KG. I learnt it the hard way when I came to Kuala Lumpur. If you have too much luggage to bring in the flight along with you or if you are looking for cheaper options, they give you another option i.e., MASKargo. When my wife was coming from India, she had 85 KGs extra baggage!!! Now that would have costed around INR 51,000 if she had tried checking in the baggage with her in the flight. We were suggested MASKargo and were informed that it will cost INR 106 per KG. It would have costed us INR 9010, much lower than the first option. We happily took the MASKargo option. 

While submitting the consignment, we were informed about the taxes. It increased the total figure by INR 5000!!! Unexpected expense but still much better than INR 51,000. We were also told that we can collect the consignment after landing in the usual manner. Later, we found that the baggage cannot be collected immediately and were told about all the extensive paperwork, that of course we had not planned for. Moreover, if you do not collect the baggage on time from their facility, it attracts storage charges.

After sending the consignement from New Delhi, we were informed by MASKargo representatives in Kuala Lumpur that there would be handling and other charges of around RM 170 and then delivery charges of RM 180. I can understand the delivery charges as that was something extra that we were asking for. However, I could not understand the handling charges and why we were not told about these additional 'hidden' charges in the first place. 

Overall, there were huge savings and I am happy about that. However, the amount of confusion that was created in the whole process and the hidden charges would make me look for another option next time around. As I mentioned earlier, if there is a huge cost differential and if MASKargo is a much much and much better option than the next player, I would still use it. But the point is that, they are allowing me to look for another option. Had they been transparent about the whole things and informed me about ALL the charges beforehand, I would have still paid the same amount but would have been a 'happy customer'. Common sense!!! 

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