Transaction types: Payment before delivery

The beginning of the consumer life-cycle generally starts with a transaction. The type of transaction will characterise the rest of the consumer experience and, especially, the end.

Payment before delivery

Paying before the delivery of the experience reduces the consumer’s empowerment in the relationship. Transparency is reduced, with the consumer unsure of the details of the service to be provided until its completion. This limits the ability of the consumer to negotiate value or have a frank discussion with the service provider. The customer would usually have to make an effort to have their complaints heard, possibly in some formal, systematic way that further distances the service from the customer.

Fyre Festival

This was described as being an exclusive music festival, scheduled to take place on a remote desert island with beautiful people in attendance. The event became a legendary disaster due to the lack of experience of the founders – it was apparently closer to The Lord of the Flies than an exclusive music festival. Stranded flights, insufficient accommodation, people stealing each other’s’ beds, only one music act performed, no lighting, no running water... were just some of the issues. Five thousand tickets were sold before the event. The prices varied between US$500 to US$1500 for different packages. There was no one available for customers to talk to. They had no leverage. No one was refunded. Not surprisingly, the festival was subsequently the focus of many lawsuits.

Entertainment

The band Radiohead disrupted the model of payment with their album Rainbows by asking customers to pay what they thought was appropriate. It would have been interesting to extend this to their tour tickets so as to have the entertainment industry’s transaction model challenged with a more open alternative.

Train travel

A very common everyday delivery failure for commuters is a late train. Some countries require train companies to pay compensation for a late train. But to receive it, the customer is often required to fill in a form. The UK website ReeClaim.co.uk, allows users of London Transport to reclaim automatically for train delays. They have refunded £1,013,203 since the company started. This is paid automatically, straight into the customer’s bank account. Reclaiming
is automatic for consumers who have signed up. The company says “In many cases, trains are delayed without you even realising that you were delayed. In fact, most of our users who received refunds were surprised to learn that they were delayed.”4