Thank You

Normally if I’m out working I will pack lunch from home for the day from the previous nights dinner leftovers because I prefer home cooked food over takeout and my wife cooks great food. There are instances however where I by food and one place in particular I have bought from over a decent period of time for a few years. This place is doing something very wrong and potentially detrimental to their ongoing growth and profits. They have decided to cut their portion sizes by about half without adjusting the price.

You don’t make money by giving people less, you make money by giving people more.

The idea of cutting costs through offering a reduced service is an extremely poor business model that no customer wants to be apart of. It projects to the universe a number of signals;

  • You care little about your customer experience
  • You have little understanding of customer retention
  • There is a lack of understanding about “word-of-mouth” referrals
  • You are projecting a sense of lack which will only return you more lack
  • Your staff retention is likely low as a willingness to undercut your customer means you have a willingness to undercut your staff

If you undertake in this blasphemy, do your self a favour and review your business processes by doing the following;

  • Look at offering a better customer service experience to generate increased and repeat business as a means of increasing sales
  • Encourage your staff to up sell current products rather than under supply on existing ones
  • Provide customers with “frequent buyer” incentives or VIP programs to encourage repeat business
  • Offer VIP days/nights where members can purchase products slightly discounted or receive bonus member only offers
  • Look at areas where added value can be provided such as free reading material in the case of cafes or restaurants so customers stay for longer and are likely to spend more
  • Improve and nurture your company and staff culture. Sales in any business start from inside out. If your team doesn’t believe in your mission, your customers certainly wont
  • Source raw materials, consumables and services your own business uses at competitive rates but not below market to improve your own costs. Be cautious not to also go with the cheapest as cheap is not always best and may affect your own business process long term
  • Engage with your customers and remember their name. When they feel apart of your culture you will have them forever
  • Thank you customers. Genuinely. Honestly. Frequently. They will notice and come back for more

Thank you for reading. Now go get some.

—–

Image linked courtesy of leadingwithtrust.com.
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2 thoughts on “You Don’t Make Money Giving Less, You Make Money Giving More

  1. Great points Ivan, customers have to be number one! If they really needed to cut the portions as a business decision (e.g. if they were poor in cash flow), they should have at least reduced the price as well.

    The number one asset every person has is their name. So remember it and they’ll remember you.

    1. Indeed. They certainly do. And I strongly believe that staff are equally important. Both are truly a companies biggest asset. They are the only two things that add to the value and net worth of a company over time. All else is depreciable yet so many business loose focus of this. Today more than ever competition is rife and it’s extremely easy to switch a preferred place of purchase on behalf of a customer so customer service requires a lot of attention. You hit the nail in the head with the asset being a persons name. I think it’s the thing that ties an unknown to the first stage of significance. And everyone wants to feel valued.

      Thanks for this comment. Rock on!

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