Delight your customers
What you really want to do is maximize profits with narrower margins
My father worked two jobs, so my uncle Paul and his family would often bring us along when they were visiting my grandparents. They liked to play cards, 45s, for nickels and dimes. Nobody made a lot of money, and nobody lost a lot of money.
Even so, when Uncle Paul won, we got to stop for ice cream on the way home. I’m sure he never won enough to cover the cost of ice cream for everybody, but he sure had us all rooting for him…
Fond memories – nowadays I’m always fighting the battle of the bulge, so I hardly ever eat ice cream, much less go to an ice cream stand.
Just the other day, I was going sailing
and the wind died right after we got there. Well, that took care of that, but my friend said, “Come on, I’ll buy you an ice cream!” It was 93°, so I protested there would be long lines. “Let’s go see.” How could I say no?
There were three ice cream stands within a mile of where we were. I drove by all of them, and we decided on the last one. The lines weren’t that bad. I got black raspberry, and she got chocolate almond or something like that.
They gave it to us in styrene cups, not material I like. Why couldn’t they serve it in plastic cups or even cardboard cups?
The real problem was the plastic spoons. They were so flimsy; they kept bending every time we tried to dig out a mouthful of ice cream. I wondered if the proprietors had ever tried to eat their ice cream with those spoons? We had to get our own napkins off a roll that looked like toilet paper – not very appealing. They had picnic tables, but no umbrellas to shade us from the sun, and it was brutal.
On top of all that, my friend complained of the price. She never said how much it was, just that it was astronomical. “The next time we should just go to a convenience store and buy a pint. I’ll put some cups and spoons in my sailing bag, and it will be a lot better than this for about 20 percent of the cost.”
Now think about that for a moment. This woman has money; she wasn’t concerned about the price because she couldn’t afford it. She felt she was being taken advantage of. The ice cream was delicious, but everything else about the experience was underwhelming. For all that extra money, they weren’t delivering any more value than a local convenience store would have provided…
It wouldn’t cost more than a few pennies to give us better spoons, cups and napkins. Yes, the umbrellas would cost more, but hundreds, if not thousands of customers would have more comfortable experiences throughout the season. Instead, the ultra-cheap accommodations made an outstanding product hardly enjoyable.
Do you think we’ll ever go back? The reason we had selected this last ice cream stand was that I had been to the first one two years ago and the second one last year, and I can tell you they’re all the same. If one of them did a better job and put the thrill back into eating ice cream, they would probably put the other two out of business.
If Uncle Paul was still around, and he won the card game, I would probably try to talk him out of going for ice cream at one of these stands.
What causes businesses to do things like this? We all know the answer; they’re trying to maximize their profit margins. And that’s a really stupid way to run a business. What you really want to do is maximize profits with narrower margins. You’ll make less on each customer, but you’ll have a lot more customers. That’s where the real money is.
If your competitors are trying to maximize their margins, you’re in an enviable position. Try to delight your customers, the difference is immediately recognizable, and it doesn’t take long for word to get around. Your costs will increase slightly, but keep the price the same. You want to make it on volume. Giving better value at your competitors’ price is a sure formula for success.
And don’t worry – customers will learn quickly not to frequent the ice cream stands and other businesses with the shorter lines.
Ronald J. Bourque, a consultant and speaker from Windham, has had engagements throughout the United States, Europe and Asia. He can be reached at 603-898-1871 or RonBourque3@gmail.com.