Bank of America is in Retreat. The nation’s second largest bank blinked last Tuesday. In case you hadn’t heard, B of A decided to abandon its plan to charge a $5 fee on debit card purchases.
B of A was undoubtedly influenced by the decision of its’ two competitors – Wells Fargo and JPMorgan Chase – deciding not to charge similar fees to their customers.
Unfortunately for the banks’ their decision to squelch the $5 fee couldn’t put the brakes on ‘Bank Transfer Day’. The November 5th movement encouraged customers of large banks to transfer their funds into local credit unions, and other smaller, regional institutions.
According to latest reports approximately 80% of credit unions enjoyed membership increases in October. The total number of new members joining credit unions was over 650,000 with $4.5 billion in new deposits.
Oddly though, some insiders say the banks couldn’t care less about the defection of smaller dollar accounts. In the end, they simply wind up getting rid of their least profitable customers.
Savvy customers know that the banks aren’t going to let an opportunity to raise revenue get away so easily. You’ve got to believe that more ‘hidden’ fees are coming in the future to make up for the debit fee loss.
By comparison, the uproar caused by the bank’s plan was almost equaled by the furor caused by the subscription increases levied by Netflix.
Netflix, the online and mail order movie rental company, raised prices up to 60% on their U.S. subscribers. This increase led to a veritable firestorm of anger as thousands of customers have begun to rail against the pricing change.
Just think, in the not so distant past Netflix was the hottest ticket in town. How quickly things can change!
Users inundated the Netflix blog with posts and left thousands of comments on the company’s Facebook page. To many customers the ploy reeked of a company attempting to wring a few extra dollars out of their pockets.
As a result, Netflix is getting hit with pretty serious losses as customers begin to defect and seek out less costly alternatives. In a note to its’ investors, Netflix says that they are prepared to lose as many as one million subscribers. Ouch!
By leveraging social media, customers are banding together in order to do battle with corporate America on different fronts. These are true examples of the free market system at work.
When you consider the anger engendered by outrageous airline fees, it will only be a matter of time before they feel the wrath of today’s social media savvy consumer.
Can you think of any other industries that could be ripe for an uprising by fed up consumers?