18 Oct #194 – Integrity Idea 033: Provide “Plain” Pricing
ESSENCE: Integrity Ideas are specific actions a faithful leader can consider in leading faithfully through business a better way.
INTEGRITY IDEA: Provide “Plain” Pricing
COVERT-OVERT CONTINUUM (six Continuums for action): Practices
COVERT-OVERT RATING (several levels from Highly Covert to Highly Overt): Highly Covert
STAKEHOLDERS SERVED: Customers
Most Integrity Ideas are practical actions toward implementing a bigger WHY for the organization. “Provide Plain Pricing” is about providing customers with transparent and honest information about the price of the organization’s products and services. It recognizes that leading with faithful integrity through business a better way calls for a “should we” rather than a “can we” culture. A “should we” culture in an organization flows from a commitment by faithful leaders to lead the organization in pursuing a “WHY” that is bigger than maximizing profit, to live out a set of values that reflect and reinforce that purpose, and to pursue that purpose by doing the right thing, in the right way, for the right reasons and by supporting all workers in doing the same. “Provide Plain Pricing” puts the Golden Rule into action and reinforces to employees that integrity and honesty are core values of the organization. It also signals those values to customers and forms the foundation for the organization and its people to be trusted. “Provide Plain Pricing” should be motivated and implemented by Biblical principles of honesty and out of obedience to God’s command to love others and not motivated by cultural or political pressures or the fear of regulatory requirements.
Integrity Ideas are specific actions a leader can consider during the Re-Align step of Integriosity®–actions that will begin to Re-Align the organization with Biblical beliefs, principles and priorities. You can find more Integrity Ideas at Integrous | Integrity Ideas (integriosity.com)
Integrity Ideas are practical actions toward implementing a bigger WHY for the organization. We believe some are critical (and necessary) steps in the RENEW/RE-ALIGN/RE-IMAGINE/RESTORE process. Others are just ideas to be considered if they feel like a good fit based on what leaders prayerfully discern is best for stewarding the organization toward its WHY.
“Provide Plain Pricing” falls into the “should” category. Leading a business with faithful integrity through business a better way should prioritize cultivating a culture in which transparency and honesty are values that permeate interactions with and among stakeholders and obfuscation and deception in those interactions are not tolerated.
INTEGRITY IDEA: Provide “Plain” Pricing
“Provide Plain Pricing” is about providing customers with transparent and honest information about the price of the organization’s products and services. It is prioritizing the “first thing” of Righteousness, which is one of the two key aspects of Integrity.
“Provide Plain Pricing” recognizes that leading with faithful integrity through business a better way calls for a “should we” rather than a “can we” culture. A “should we” culture in an organization flows from a commitment by faithful leaders to lead the organization in pursuing a “WHY” that is bigger than maximizing profit, to live out a set of values that reflect and reinforce that purpose, and to pursue that purpose by doing the right thing, in the right way, for the right reasons and by supporting all workers in doing the same.
In 1907, Orison Swett Marden wrote: “The golden rule for every business man is this: ‘Put yourself in your customer’s place.'” “Provide Plain Pricing” puts the Golden Rule into action and reinforces to employees that integrity and honesty are core values of the organization. It also signals those values to customers and forms the foundation for the organization and its people to be trusted.
We believe efficient commerce and customer loyalty require trust. Seth Godin has observed:
When humans stop acting like humans and instead indicate that they have no choice but to seek every short-term benefit and cut every possible corner, we can no longer trust each other to act responsibly.
“Provide Plain Pricing” should be motivated and implemented by Biblical principles of honesty and out of obedience to God’s command to love others and not motivated by cultural or political pressures or the fear of regulatory requirements.
Transparent and Honest Pricing.
“Provide Plain Pricing” is not about how much the organization charges, and it is not about how simple or complicated the pricing for a product or service may need to be. It is about how pricing is communicated to customers. It is about transparency and honesty in pricing communication.
The lack of transparent and honest pricing by businesses has become a hot topic in recent months. The term “junk fees” has been coined to describe the fees and charges businesses have quietly been adding to the prices advertised to consumers. For example, the “resort charge” added by hotels to their advertised rates is a frequently cited “junk fee”. But hotels are not alone in this practice.
In November 2022, the Federal Trade Commission (‘FTC”) issued an Advance Notice of Proposed Rulemaking to solicit public input and comments on the prevalence of “unfair or deceptive practices relating to fees”. In response, they received over 12,000 comments. Based on those comments, on October 11, 2023, the FTC issued a Notice of Proposed Rulemaking to announce a proposed “Rule on Unfair or Deceptive Fees”. In the Notice, the FTC:
• Noted a Consumer Reports survey from 2018 that found “at least 85% of Americans have experienced a hidden or unexpected fee for a service in the previous two years, and 96% found them highly annoying.”
• Noted a source that reported hidden fees are a prevalent problem related to internet apps, automobile rentals, communication companies, event ticket sellers, carpet cleaners, auto dealers, dietary supplement sellers, restaurants, airlines, moving companies, credit unions and banks, payday lenders, gyms, hotel and travel companies, outlet stores, sports betting, and online auctions.
• Described the “unfair and deceptive fee” practices reported in several categories of organizations, including: Hotels and Short-Term Lodging Fees, Live-Event Ticket Fees, Fees Related to Restaurants and Prepared Food and Grocery Delivery Apps, Transportation Fees, Telecommunication Fees, Rental Housing Fees, Education Fees, Financial Services Fees, and even Correctional Services Fees (fee practices of private correctional facilities).
None of that should be a surprise to any consumer (other than the pricing practices of private correctional facilities, which is truly abhorrent given the captive nature of their audience). Although it seems likely that some type of regulation of these practices is coming, it should be irrelevant to the faithful leader seeking to lead with faithful integrity.
Leading with faithful integrity through business a better way in alignment with Biblical beliefs, principles and priorities requires transparency and honesty in pricing, whether or not required by government regulations or industry regulatory bodies. Here are just a few relevant Biblical verses:
So whatever you wish that others would do to you, do also to them, for this is the Law and the Prophets. (Matthew 7:12)
Therefore, having put away falsehood, let each one of you speak the truth with his neighbor. (Ephesians 4:25)
You shall not steal; you shall not deal falsely; you shall not lie to one another. (Leviticus 19:11)
You shall do no wrong in judgment, in measures of length or weight or quantity. You shall have just balances, just weights, a just ephah, and a just hin. (Leviticus 19:35)
One who is faithful in a very little is also faithful in much, and one who is dishonest in a very little is also dishonest in much. (Luke 16:10)
For our boast is this, the testimony of our conscience, that we behaved in the world with simplicity and godly sincerity, not by earthly wisdom but by the grace of God, and supremely so toward you. (2 Corinthians 1:12)
Transparency. An organization operating with faithful integrity should not try to “hide” pricing in fees and charges that their customers only discover down the road in the sale process (or even after the fact when the bill arrives). You might be saying, “But our competitors are able to advertise lower prices by using hidden fees, and we would look uncompetitive if we were transparent about total pricing.” Perhaps, but that is the difference between a “can we” and a “should we” culture. “Can we” can lead to a race to the bottom.
If one thing is clear from the FTC Notice, hiding fees does not honor customers–it “annoys” them. “Should we” is playing the long game–doing what’s right and trusting God with the organization the faithful leaders have been given to steward.
For a real-world example of a business trying to model “Provide Plain Pricing”, let’s look at automobile sales. For most people, buying a car is a stressful negotiating experience with a car salesman who has much more experience and superior information. People try to get smarter with buying and information services, but it is still a stressful “game”. One great example of “should we” transparent pricing in the car dealership business is Flow Automotive in North Carolina, which has 51 dealerships. One of their tag lines is “Easy. Transparent. Fun.” They advertise “no-haggle” up-front pricing with transparency (“We are happy to show you the numbers. No hidden screens or secret offers.”) Don Flow is a faithful leader leading with faithful integrity.
Honesty. The FTC Notice also called out dishonesty in labeling fees. For example, some organizations add a “shipping cost” that is more than the cost to them of shipping. An organization operating with faithful integrity must be transparent about its pricing, but it must also be honest in that transparency. Profit shouldn’t be hidden dishonestly behind labels that sound like out-of-pocket costs simply being passed through.
In the legal profession, I learned as a young lawyer it is the difference between “disbursements” and “other charges” on a bill. It is unethical to call something a “disbursement” unless it is an actual cost paid by the lawyer and being passed through to the client. An airfare is an example of a legitimate “disbursement”. We called “other charges” those items that were an allocated charge for an expense, such as a per-page charge for photocopying that is not a direct pass-through of a third-party expense.
We believe another aspect of honesty in pricing is being honest about the “real” price. Some organizations quote a price to existing customers that far exceeds the price charged to new customers. While annoying to existing customers, it is usually transparent. What they are not honest about is that existing customers can receive the lower price if they are persistent enough (including threatening to canceling in many cases). Their calculation is that most customers will not be so persistent. We believe that is equivalent to the use of “unequal weights” decried in various passages in the Bible:
Unequal weights are an abomination to the Lord, and false scales are not good. (Proverbs 20:23)
You shall not have in your bag two kinds of weights, a large and a small. You shall not have in your house two kinds of measures, a large and a small. A full and fair weight you shall have, a full and fair measure you shall have, that your days may be long in the land that the Lord your God is giving you. For all who do such things, all who act dishonestly, are an abomination to the Lord your God. (Deuteronomy 25:13-16)
The Integriosity model organizes “heart change” along six Covert-Overt Continuums. There is nothing magic about these categories, but we believe they are helpful in thinking about practical execution of a Re-Imagined Purpose, Re-Imagined Values and a Re-Imagined Culture. The Continuums are Prayer, Proclamation, Policies, Practices, Products, People.
Each Continuum represents an area in which leaders can begin to think about, plan and institute Re-Alignment changes to the heart of the organization.
“Provide Plain Pricing” is on the Practices Continuum. It is a practice the organization should adopt to affirm its commitment to pursuing a WHY, and curating and reinforcing an organizational culture that prioritizes transparency and honesty, aligning with Biblical beliefs, principles and priorities.
“Provide Plain Pricing” embodies Biblical beliefs, principles and priorities that an organization must seek to embed in its culture if it is committed to operating with faithful integrity through business a better way.
COVERT-OVERT RATING: Highly Covert
The Integriosity model breaks the Covert-Overt Continuums into six gradations–from Highly Covert to Highly Overt–that we believe are helpful in beginning to pray and think about what is most appropriate for an organization at a particular moment in time.
Most Integrity Ideas will have one place on the scale. Some can vary depending on how they are implemented. “Provide Plain Pricing” is Highly Covert (an action that would be taken by a secular company), but it can move to the overt end of the Continuum if the leaders of the organization choose to explain it in terms of faith and Biblical principles.
STAKEHOLDERS SERVED: Customers
When we categorize faith-based actions, we also consider the stakeholders principally impacted by the action: Employees, Customers/Clients, Owners, Suppliers/Vendors, Community and Kingdom.
“Provide Plain Pricing” is aimed at loving and respecting Customers/Clients.
The golden rule for every business man is this: 'Put yourself in your customer's place. (Orison Swett Marden)
Every faithful leader seeking to lead with faithful integrity through business a better way should be praying and thinking about how their organization’s practices can be obedient to the Golden Rule.
One way to do that is by implementing a practice of “Provide Plain Pricing”–looking closely at the organization’s structure and communication of pricing to ensure that it is transparent and honest. While the organization obviously must comply with legal requirements for transparency and honesty, those serve as a floor.
“Provide Plain Pricing” requires prayerfully considering whether and how the organization should go above and beyond what is legally required and even above and beyond industry norms because it is the right thing to do out of obedience to how God has instructed His image-bearers to live and steward His creation.
As faithful leaders prayerfully discern if and how “Provide Plain Pricing” could and should be implemented in their organization, these are some questions to consider:
• Are there ways the organization can make the customer buying experience more enjoyable through greater transparency and honesty about pricing?
• Are there ways the organization can build customer trust through greater price transparency and honesty?
• Does the organization add any “hidden” fees and charges to the price advertised to prospective customers?
• If it does, how could it be more transparent with customers upfront so that they are not surprised or annoyed? How could the organization advertise pricing in a way that allows customers to make meaningful comparisons with the prices of competitors while still being transparent about any additional fees or charges?
• If it does add fees and charges, is it labeling and portraying them in a way that honestly reflects their nature? Do any labels or descriptions try to disguise profit or internal overhead as a passthrough third-party charge?
• Is the organization honest about the price it is willing to charge for its products and services? Does it advertise higher pricing to existing customers in the expectation that most will simply accept the price, while quietly offering a lower price to those who complain or threaten to leave?
• Should the organization move toward the overt end of the Practices Continuum by explaining the faith-based rationale for its price transparency and honesty, particularly if it goes against industry norms? If so, should that explanation be only internal with employees or should it be shared with customers?
Faithful integrity requires prayerfully doing the right thing, in the right way, for the right reasons, and trusting God with the outcome. It also requires doing it now. Oswald Chambers wrote:
We know something is right, but we try to find excuses for not doing it immediately. If we are to climb to the height God reveals, it can never be done later—it must be done now. And the sacrifice must be worked through our will before we actually perform it.
PERSONAL NOTE (from PM): Let’s be transparent and honest, even the people who impose “junk fees” and “hidden fees” and “dishonest pricing” on their customers must hate them when they are the customer. That is the definition of ignoring the Golden Rule. I will admit that I am part of the 96% who find those fees and charges annoying:
I am annoyed every year when SiriusXM automatically renews my subscription at triple what I was paying because my “special promotion” expired. I have to call, spend at least 30 minutes on the phone (while the agent tries several price levels, always needing to “checks with their manager”), and say the magic words “I am going to cancel” in order to receive another year at the “special promotion” price–and then I have to fight about a credit for the month they already charged at the higher price. (There are entire websites devoted to negotiating SiriusXM pricing.) A SiriusXM executive told me once that they know the process annoys customers who call, but the vast majority of people will simply accept the higher price.
I am annoyed when the same thing happens with my cable/internet subscription. Customer service says no promotions are available, but the “retention” department magically finds some.
I am annoyed with the difficulty in comparing online ticket prices to a live event because sellers follow very different practices in how they disclose fees (did I go into settings and choose “show prices with fees included”? Why isn’t that the default?). I now stick to TickPick, which does not add fees.
I am annoyed with the difficulty in comparing hotel prices online because the “resort fee” or “facility fee” doesn’t show up until you look at the details of the property.
I am annoyed by the new practice of restaurants adding special charges to compensate their staff instead of increasing the menu item prices enough to pay fair wages. Some even “virtue signal” by calling it something like a “Benefits and Equity Charge” or a “Wellness Fee” and making clear it is not in lieu of a gratuity.
I am annoyed not only because of the time, effort and energy it takes to push back. I am also annoyed because I know there are many, many people who don’t realize they have a choice or who are too intimidated to push back. In all honesty, that’s what annoys me the most. Although I may welcome the FTC’s new rule, I wish we lived in a “should we”, Golden Rule culture, and I will keep looking for and patronizing businesses (like TickPick) that provide transparent and honest pricing.