Consumer organisations have successfully fought for more transparency in online pricing, for example in the airline industry. The price listed was often not the actual price charged for the full service, but merely displayed to tempt customers to book the ticket.
Now that those practices have been stopped, the airline industry has become more creative in optimising their return on investments (ROI), but at least it has increased in transparency for the average buyer. Pricing still differs depending on the time of day, search behaviour of consumers, and airlines can charge you extra for services, such as reserved seating, bringing infants on board, re-issuing of a boarding pass, excess luggage, all sorts of insurance, food and beverages and other varying ticket conditions. Pricing also varies heavily when there is more competition on certain routes, and whether or not it is holiday season. Pricing is the key tool to manage the long term ROI of the airlines, and rightfully so.
The moving industry has not been challenged by consumer organisations, at least not yet. Given the simplicity of the service (moving goods from A to B when someone moves house), the complexity applied in the pricing of the service is incredible and lacking in transparency for the average consumer or even corporate buyer. Although the corporate buyer will carry out due diligence, the private consumer most probably will not.
If the industry does not become more transparent, it will lose direct clients, and online or offline aggregators of household goods moving services will take over, and manage the relationship with the private or corporate customer.
The list of service exclusions is illustrative for this phenomenon. The exclusions list is often much longer than the list of service inclusions. On top of that, the service exclusions – often detailed as acronyms – are not easy to understand, and the likelihood of occurrence is impossible to predict for the consumer. Independent studies prove that these excluded services occur quite frequently – in 82% of the moves there is one or more ‘additional cost’, and the average represents about $1,220, which is about 15% of the average moving price, for an international overseas move. So, when a consumer is comparing offers from different vendors, they have the impossible task of comparing apples with other fruit, except apples. This is also the reason why certain offers may look attractive, but the actual total cost may be much higher, which is an unpleasant surprise. The iceberg analogy used in culture and psychology also applies to shipping costs – a big portion remains under the surface, invisible.
Working in harmony with customers
At Harmony Relocation Network, we have been educating our customers about pricing, service inclusions, industry practices, and have developed workshops for buyers on how to better understand the moving industry. Many companies have taken our advice into consideration, and have created tenders or bidding models that better capture these additional costs, so that competition becomes fairer and thereby better for the customer.
There are also innovative solutions available on the market, with companies like GRIP / PricePoint that provide transparency to the market about competitive moving rates. We envisage a model whereby the pricing for moving services becomes completely transparent to the client, and the booker of a move can only charge a management fee. No more hidden costs and unnecessary commissions, but a model whereby the winners will be those companies that are most efficient and provide the best possible customer service, at a rate that is transparent and understandable.
At Harmony Relocation Network, we regard ourselves as among the industry leaders – so when dealing with us, or one of our ‘proud member’ network companies, you will notice a refreshing approach to price transparency. Consumers should no longer accept anything else, so we expect that others will follow suit.
Ultimately this will make our industry stronger, and will allow us to work directly with our private and corporate customers, rather than through the middlemen who will come into play if necessary changes to the industry are not made.
Disruption will affect many industries – those resistant to change will be first to be affected by creative destruction. At Harmony Relocation Network, we prefer to embrace change and create new buying models, focussed on how customers wish to do business, rather than the other way around.