Communication, Value Are Key When Adding Fees
HT reached out to Alfonso de la Nuez, an authority on Customers’ Digital Experience, to get his thoughts on online fees. The Forbes Books author of The Digital Experience Company: Winning In The Digital Economy With Experience Insights, says brands need to exercise caution when charging customers online processing fees. Here are his thoughts:
While studies suggest customers are willing to pay for a better experience, the key for brands is to clearly demonstrate superior perceived value through that experience. If not, additional fees can actually turn customers off.
When it comes to charging customers fees for online ordering in the food and hospitality industry, there are several potential user experience (UX) issues that could arise. Here are a few key issues:
Lack of Transparency: One of the most common UX issues related to charging fees is the lack of transparency. Customers don't like hidden fees and unexpected charges. They might select their items, get to the checkout, and then suddenly see an additional fee that wasn't clear from the beginning. This can lead to frustration, abandoned carts, and damage to the company's reputation.
Price Comparison Difficulty: With additional fees, it becomes harder for customers to compare prices with traditional dine-in or takeaway options. If a $10 meal ends up costing $15 after fees, the perceived value decreases. This can create confusion and lead to customers opting for other methods of obtaining their food.
Perceived Unfairness: Customers may perceive these fees as unjust, particularly if they don't understand the reasoning behind them. For example, if the fee is to cover the cost of delivery, but the customer picks up their order, they may question why they're being charged. This perception can lead to dissatisfaction and harm brand loyalty.
- Complex User Interface: If a fee structure is complex (e.g., different fees for different conditions), it can make the user interface more complex, making the ordering process longer and more confusing. This can lead to a poor user experience, particularly for new or less tech-savvy customers.
- Decreased Affordability: Adding fees to online orders can make it less affordable for many users, affecting the platform's accessibility. If the target market includes customers for whom affordability is a key concern, additional fees could lead to significant customer loss.
- Reduced Impulse Buying: For some customers, the advantage of online food ordering is the ease of making impulsive choices (e.g., seeing a promotional offer and deciding to order). Additional fees could discourage this, as the increase in cost might prompt second thoughts.
To mitigate these UX issues, companies should consider implementing transparent, fair, and simple fee structures. They should also communicate clearly why the fees are being charged and how they contribute to providing a better service to the customers.
About the Author
Alfonso de la Nuez (https://alfonsodelanuez.com) is the Forbes Books author of The Digital Experience Company: Winning In The Digital Economy With Experience Insights. He also is the Chief Visionary Officer and a board member at UserTesting, where he advises the executive team with the company's strategic vision for building better customer experiences. With over 20 years of experience in the digital business industry, de la Nuez brings a wealth of knowledge to the table and is well-respected for his forward-thinking approach and ability to drive growth and innovation. Before joining UserTesting, he co-founded Xperience Consulting and UserZoom (merged with UserTesting in 2023), and has worked for brands like Dell and Icon Medialab. He holds three technology patents and has a BA in business from San Jose State University. Follow him on Twitter: @delanuez23.
