We are pleased to feature a recent article written by Jeff Thredgold in this month’s Leadership Lessons. Jeff is a very smart guy and the only economist to earn the CSP designation from the National Speakers Association. His piece titled, Wouldn’t It Be Nice If…, follows this month’s article. Enjoy.
The $1500 Beverage
I was famished. I had fasted for a medical procedure that was scheduled for early morning and in addition to being hungry, I was dying for my morning jump-start of caffeine. Fortunately, there was a Starbucks located just round the corner from the hospital so I picked up a cappuccino to go.
A short drive later I noticed Zaidy’s Deli. I knew from previous experience that the food was good so I parked and went inside with my just-started Starbucks beverage. “One for breakfast,” I said to the hostess. “We don’t allow outside food or beverage, so you can either down it or leave it at the counter.”
I thought about it briefly and replied, “No thanks. I’ll take my coffee and money elsewhere.”
Her curt challenge to my not-purchased-there coffee was off-putting. I could empathize with a business owner who wanted to sell you his or her coffee, but I’d already purchased mine elsewhere. I was more than willing to spend $10 for breakfast, but the restaurant wanted $12—the price for the coffee and the food—and ended up with nothing.
I was perplexed so I called my brother Shawn who is a successful restaurant owner and operator. After explaining the scenario, I asked for his opinion. As expected, he had a simple solution:
“She should have said, ‘We don’t allow outside food or beverages, so let me pour your drink into one of our cups after I seat you.” No competitor’s coffee cup on the table, I get to keep my beverage and they get to keep my money spent on breakfast.
So why didn’t she say that? I can only assume nobody taught her to say it. Someone instructed her that outside food or beverages weren’t allowed. They didn’t teach her much about tact or customer retention.
For purposes of illustration, let’s assume that six times weekly someone tries to bring in an outside beverage and that half of those customers acquiesce and chug or dump their beverage, but the other half of the time they—like me—go elsewhere.
That means three people are leaving each week. Further assume each would have spent approximately $10. Multiply $10 times three customers times 52 weeks and the quick math is that $1500 is being lost due to inadequate training (and that doesn’t count negative word of mouth or lost repeat business).
One simple technique or sentence could have earned Zaidy’s $1500 a year. I consider that a pretty good return on investment.
What haven’t you taught your employees that is costing you money? What simple techniques or tools could be used to address persistent problems? Where have you been lax in explaining a procedure that could easily have saved you both customer loyalty and money?