From the Washington Post: "Intuit Finds Customer Complaints Too Taxing to Endure"
"I'd like to think that nobody's worrying about doing their 2008 taxes yet. But a lot of people do pay attention to that task this early--so many that their protests forced tax-prep-software vendor Intuit to back down from a controversial pricing change last week.
"The story began in November, when Intuit announced that the next release of its TurboTax software would charge an extra $9.95 for each return prepared after the first. Users noticed this change and were not amused."
Would Intuit have been smarter to develop a different strategy? After all, businesses are not the only ones experiencing difficult financial times. Consumers are becoming increasingly sensitive to prices, as I have been pointing out in recent posts, and an increase in price would be glaringly obvious when associated with something as distasteful and disturbing to many consumers as filing taxes.
The article goes on to say:
"For a while, Intuit seemed content to ride out the criticism. One Intuit publicist scoffed at Block's marketing strategy, Twittering that "Brands use price when they have nothing else.
"By Thursday, though, Intuit had evidently had enough. It said it would make additional returns free and refund any fees customers had already paid. The company has since released additional details about the change, explaining that an upcoming software update to TurboTax will remove any mention of the $9.95 additional-return fee."
Although pricing is a powerful tool for increasing profits, product penetration and overall success, sound pricing principles and market research need to be applied to any change in strategies, especially in uncertain economic times.
What do our pricing readers think about Intuit's strategies? What other strategies would you have recommended? Do you think Intuit will recover enough of its past users to turn a profit this year? It is going to be an interesting year for pricing! More to come. Warmly, EM
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