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The Tale of two Theaters

March 23rd, 2012

The other night I took my 15 year old and his friend to the movies. After spending thirty dollars on movie tickets, we found our seats only to enjoy twenty-five or so TV commercials. It was half way through this grueling experience of watching annoying TV ads that I decided to get up and get some sodas and pop corn. There it was, that wonderful menu board, proudly displayed on the wall with overpriced items. My order was taken by the high school student, who cheerfully read it back – “one pop corn and three drinks that will be $23.00!”

As I recovered from the shock of forking over $23.00 for (let me repeat, one pop corn, and three drinks) George’s friend grabbed the pop corn and proceeded toward the saltshaker. “What are you doing?” I asked. “George and I like extra salt, Tyler replied.” Well hold on for a moment please”, I asked now turning to request a box for me to pour my part of the prior to extra salt 7.50 pop corn. The Concessionaire brought out a tiny box just large enough for a hot dog. “We can offer you this. He offered.” “They use to have larger boxes, I replied, this will hardly fit much” “Yes, he continued, we can certainly give you a larger box but we need to charge you for it.” What do you mean, how much I asked?  “Well he began; they make us charge whatever the price would be for popcorn the size of the container.” “Ok then I said; just give me the dam hot dog box!”

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This is the tale of two kinds of Theaters. One the recent traditional represented by Cine Mark and the Regal Theater Group, and the other represented by The Alamo Draft House.

Let me begin by defining recent traditional by comparison of traditional. Traditional as people 35 and older recall a theater experience, which included movie previews and cartoons. In addition, it was always understood that theater food would not be cheap or street price competitive. On the most part, people understood this and accepted that paying significantly more than conventional prices for candy popcorn and sodas was part of the theaters way of actually making money.

Then in the 90s, something began to fundamentally change. Prices for food, which originally accepted as high, became grossly excessive. Even bottled water (16 ounces) began selling for $4.00!

Then to add insult on top of injury, these chains saw the opportunity to hold their audience captive to anywhere between 15 to 30 TV ads! In an attempt to win audience acceptance of this cruel racket, they inserted a couple of TV promotionals and behind the scene snippets. After enduring the onslaught of relentless commercials at the viewers expense, we now hear the cheerful voice-over chime in over closing the music as she explains just how privileged the audience has been to have endured this. “You’ve been watching First Look, she explains, you went behind the scene to witness the making of…., you were treated to the new comedy show on….

Come here early (I don’t think so) to enjoy early inside previous and blab la bla on First Look!”

This approach continued to evolve to where things currently are. In summary, higher movie tickets, rip off food pricing and excessive TV ads forced down the throats of the customers.

Enter the Alamo Draft Houses, which began in Austin TX and are now experiencing expansion of their brilliant, yet very simple concept. And what is the concept?

Give the customer a fun and delightful experience so they don’t resent paying for it.”

The Alamo does not force their audience to suffer through annoying TV ads that common sense should tell the traditional movie chains CEOs that we came to the movies to avoid. Instead, they serve up a combination of old (and I mean 1950 and 60s old) TV snippets, 50s and 60s era ads, not to mention the old corny news reels that the baby boomers watched in their 4th through high school classes. And of course, a healthy serving of cartoons! Fun.

And rather than ripping off their customers with $5 – $6.00 sodas, they offer a number of great beers for around the same price. Junk food? Yes. However, good quality food for a reasonable price is also readily available. Even better, they actually throw out those annoying talkers and cell phone users who lack the courtesy to turn them off.

This is not intended to be an ad or promotion for The Alamo Draft House; however, as a happy customer I am happy to share my experience. So while traditional theaters go the way of the dinosaur (raising prices, cheap-skating their customers (remember the tiny pop-corn box!) and forcing more unwanted TV advertising down our throats – I will always check the movie listings at the Alamo theaters – first.

In summary, every business needs to examine their business model periodically, and if someone is taking away their market share, well, it may just be for a good reason!

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Big banks and fees – here they go again

October 12th, 2011


In response to new rules that recently went into affect designed to insulate merchant’s excessive fees, Bank of America, and Chase have decided to shift the burden to their customers by having them pay a monthly 5.00 fee for the privilege of using their debit cards. And, just one swipe per month will do ya! Wells Fargo is also trying out a lower fee of 3.00.

In fairness to the banks it is important to point out that they have spent hundreds of millions of dollars to create a system that provides for debit card services. This investment included the technology and infrastructure to support required, to offer debit card convenience. Wal-Mart and Home Depot led the efforts to alleviate the cost to the merchants through legislation. I personally would have supported relief for merchants generating under fifty million annually.

Needless to say, the fees are being shifted AND because the big Banks have lost their credibility for goodwill – it is difficult to feel sorry for them. So let me reiterate, this is a charge levied against you for accessing your own money! So, let’s get this straight, first you get paid literally next to nothing for giving them your money to invest, then they charge you excessive credit card rates* for you to borrow (compare your APR to the current Prime rate for lending – even 8% is excessive)

Worse yet, many small business owners today are often sneered at by these guys at the idea of giving them a loan, or a decent line of credit.

Fee addition: How did we get to this?

For any of you old enough to remember, there was once a time Banks actually liked their customers. Rather than charging excessive interest rates on credit cards and loans, they actually paid decent rates for holding your money. Now of course, one hardly is paid anything at all (if anything) and for many, is expected to pay them to take your money.

Banks use to climb over one another to offer you a free toaster or microwave oven if you opened an account with them. Then came the ATMs. Suddenly they were offering additional incentives to get us all hooked on using ATMs. The banks also competed for bragging rights as to who actually had the most ATMs. Then the big push began to encourage consumers to use their ATM cards (soon to be renamed their debit or check cards. Of course all the incentivizing and bribing was not necessarily carried out to the benefit of the customer (as the banks would have you believe)

  • Labor savings – ATM machines kept their cost down by allowing banks to eliminate staff, which would have been previously required to manage those who needed to cash a check. In addition, automated withdrawals though ATMs also reduced human error through computerized record keeping.

As an added bonus, banks realized a financial bonanza in charging non-customers excessive fees to access their networks!

  • Debit Cards – As with ATMs, debit card use was incentivized to lower their cost of business under the guise promoting customer conveyance. Once again, it reduced the labor cost of constantly refilling their ATMs with cash. Better yet, removed another roadblock for a customer to spend money if they did not want to use their credit card. Now, the “I will need to write a check or withdrawal from the ATM” obstacle was eliminated.
  • Overdraft Fees – For years, banks enjoyed another money bonanza of offering overdraft protection for anyone who spent money without having an adequate balance. The majority of those affected were not intentionally over-drawing, they just neglected to double check for new fee’s banks were slipping in which affected their balances.

  • Fee’s are like heroin to banks – Senior Bankers I have spoken with actually confided that they have “fee committees” set up to think up new fees! It is an addiction for Banks to both make up and enforce them. Therefore, when they are taken away to the benefit of the consumer, well, the banks, like any heroin addicts, get upset!

Rather than placing focus on taking care of their customers and encouraging long-term satisfaction, Bank of America, Chase and Wells Fargo are moving forward with a plan to access fees for their customers who use their Debit Cards – and the continued war against their own customers grinds on. Well unless their customers wise up and move their money to a Bank or Credit Union that is not so fee addicted.

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Complements to Whataburger

September 6th, 2011

I want to complement Whataburger on a couple of things. No, they are not a client so this is not intended to be anything other than an acknowledgment of the following:

Recently, I had a great customer experience with them. Because I need to watch my sodium intake, I requested that the fries with my order have very little salt. Instead, I received my combo meal with one cheeseburger, a drink and fries – (with too much salt.)

After bringing it up to the manager (more, for letting them know that this could be a problem that they may not aware) she inquired what my total order was. Upon reply, she promptly re-entered the order in the register and Bing! – brought up $6.37 – which she returned.

I thanked her and stated that it was not my intention to be reimbursed for an entire order, and that I just wanted them to know about the salt issue for future purposes. She just smiled and said, “No sir, we want you to be happy with your entire order and if not, then want to make it right for you.”

I gladly accepted her generosity and told her that Whataburger had just earned “a customer for life.” In addition, I have shared this story with many people and am now telling you, the readers as well. From What-a Burgers competitors to phone companies to other businesses in other sectors:

How many times do you (the customer) just want to be treated right? How many billions of dollars are spent needlessly trying to woo or woo back customers? How much would be saved – and gained – if other companies took care of their customers the way Whataburger took care of me?

Finally, unlike so many TV ads that I immediately mute, I absolutely love the What-a Burger ads! Talk about an ad campaign geared to the Texas consumers – and I am not even a “good ole boy!” Kudos to the Ad Agency who is carrying out their campaign.  Someday I would really enjoy the opportunity to meet the voice over guy in their ad. In the meantime; I applaud one company for honoring their promise to provide something they promise “just like you like it!”

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When to purge a business card or delete a contact

August 23rd, 2011

Recently I found the time to go through my “pile of cards” and contact list. It was overwhelming. So many names had accumulated that I opted to set aside a half a day just to clean things up. The process reminded me of relevance – specifically, what and who is relevant?

What includes those who may bring benefit either as a cooperative business partner or specifically to a client.

Who is literally who the person is – not just the service or product – but the individual.

Means Test – So how do I determine who to keep and who to purge? It is based on two things, one who I really like and feel I can work with in the future (chemistry) and two, whether referrals have been reciprocated. Life is a two way street.

From attorneys to CPAs to Website developers I exercised the cleansing process. Where good chemistry and mutual consideration has been shown, I not only kept them but also went through my client list to see if they might benefit from an updated client referral.

The same applies of course with our client list itself

We all have active and inactive clients. Sometimes there is a tendency (especially in today’s economy) to hope or assume that inactive clients will once again become active clients. Sometimes we discover that they are not only inactive, but unfortunately, out of business!

My means test for this is that if a client has been inactive for more than three years, then one can rest assured that they will not be coming back. Every six months is a great time to check in with them – and encourage them to be candid as to whether or not they think they may wish to continue in the future. Valuable time is  saved if they inform you either way.

Summary:

The bottom line is that life is too short and time management too important to waste on names and numbers who are no longer relevant. So stay on top of your collection of cards and contacts. And by the way, it might be better and more efficient not to assume that someone wants your card unless they actually ask for it.

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Getting Ready For an Another Round of Useless Job Creation Ideas

August 19th, 2011

As the 2012 election cycle launches into high gear, everyone seems to be talking about jobs. So now every candidate who claims to understand the real pain in our economy appears “to have a plan “or, so they think!

Last night while watching the news we were all informed that President Obama is about to unveil his new improved jobs plan. And, from what I heard, it is pretty much the same as what he has tried previously with no results!

Spending massive amounts on infrastructure, (though badly needed) simply will not do the trick. Spending money on roads, bridges, energy and the like is too focused on narrow sectors of the economy, lacking the vision of taking a broad approach.

Based on this assumption, the majority of Americas unemployed are let’s say, “construction workers? “ Therefore, I remain eternally frustrated that he still ignores a real conversation with Main Street USA.

These are the small businesses across the country that have always been the backbone of our economy. These are the true innovators and original job creators. As Earl Nightingale, a renowned business philosopher once asked, “Where do you think our great businesses and industries came from? With one or two individuals with a great idea – and built something from there.”

Everyone begins with an idea, and if it is a good one – then it takes hold and grows. From Apple Computers (Steve Jobs and his colleagues with one great idea) to new consumer products being created today across the country and share the common thread.

Instead of pumping massive amounts of money into  plans that still have not worked it is time that we create thousands of seed money incubators across the country to review, monitor and successfully grow new business. Sure, some will fail, but look at Apple and others like them and ask yourself, how many jobs will be created if they take off? Small business on Main Street USA will also benefit from real help to secure easier to obtain SBA loans, hire more people who will then be able to spend – driving the economy toward real recovery.

So Mr. President, please, get rid of your Big Business and Union economic team advisers. Dump your college friends who never had a real business in the private sector, and listen to us on Main Street. Because small businesses, and qualified start-ups have a tendency to surprise us all!

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AUSTIN HOLDS THE BRASS RING What we do with it – is the question

April 22nd, 2011

As a Board Member to Austin Independent Business Alliance, I was recently asked to add my comments to a manifesto intended for city leaders to consider, here are my thoughts:

Austin is in the unique position for not only becoming the entrepreneurial capital of America, but also helping to lead the country (by example) – out of the recession.
Consider this:

We have been blessed with an unusual set of circumstances, which positions us for real economic and business growth. This includes a combination of creative thinkers, a predominately-younger energized and well-educated population. Finally, combine these exciting elements with the real can- do philosophy that goes to the very roots of our national origins and Austin is a winner!
Some things are already being done to foster this proposition. Comparatively speaking, Austin has a better reputation for being more business friendly then places like San Francisco, San Jose, Boston and other major hubs for new products, services and innovative thinking.
In addition to hosting two giant festivals annually, have weather that tourists seem to like, a beautiful environment, and a thriving downtown.
So what is missing?
Austin continues to place too many eggs in the Tech basket. Though we have improved our mind-set in recent years, we still place so much emphasis on high tech and high tech related sectors that we ignore other great things like consumer products, new foods, and services.
In addition, we spend our energy and resources on attracting new corporate giants to set up shop so that they will facilitate new job opportunities. In doing so – foolishly attempt to bribe and attract them with “no tax incentives” because in spite of what thousands of newcomers will tell us, our city officials fail to believe that Austin’s attraction for great talent and low taxes is already enough.
But what if the money used or deferred to attract large mega corporations was instead channeled into fostering further growth for our small businesses? Instead of committees seeking ways to bring in big businesses, what about bringing together small and large business leaders with Investor partners to discuss the creation of real seed funding designed to encourage a wide diversification of qualified start-up considerations? Moreover, when I say real, I dare to suggest an approach that considers a start-up considerations based on its merits, not just the founders equity.
Yes, many start-ups and small businesses do fail in the first several months to three years. We know that. Nevertheless, the ones that do succeed go on to create real jobs and livelihoods for millions of people. The recession brought home an urgent point, that big companies can and will create big layoffs when times are lean. Once again, the egg in one basket syndrome.
However, by channeling resources into creation of new business opportunities a percentage of those laid off, with great ideas become self employed and in the process, create more jobs.
We tend to forget that every great idea and business proposition started from something – and then grew. Starbucks, Dell and Ford all started with an idea, and then grew. By the way, notice the diversity in each entity I just mentioned? Not all tech companies are they?


In creating a real program designed to nurture and seed entrepreneurship, Austin can set an example on another exciting proposition – transforming non-conforming students and Youth at Risk (YAR) into tomorrow’s business leaders. Granted, not all are business leaders, but I am a firm believer into channeling energy into real opportunity. A brief check in business history 101 demonstrates that many of our greatest business creators and leaders did not necessarily fit in to the school curriculums. Many young people who just do not fit into being a good student are bored. Schools teach more about following orders then taking a great idea and leading. We can begin to change that – and in the process set an example for the rest of the country.
Finally, Austin needs to make sure that while it is embracing real and exciting growth in its downtown, it is not doing so at the peril of creating a two-class society. One look at downtowns emerging demographics tell us that the majority of the new condominiums and hotels are for the upwardly mobile who can afford the ever-expensive parking and new restaurants. In addition, not everyone wants a valet parking their car. Many new and small businesses (particularly in their early stages – until they really take off), are not able to pay the kind of salaries either to founders or to their employees, which provides for a nice evening in downtown.
Today for example, many of the small businesses and their owners in San Francisco have over recent years packed up and moved to places like Sacramento where the middle class can still hold promise to opportunity. Workers needed to serve Bay Area businesses frequently commute seventy-five plus miles each way – each day to their jobs. Why? Because many parts of the Bay Area (San Francisco and the surrounding areas) have become a two class economy.
Is this what we want of Austin?
Yes, we hold the brass ring, and if we are open minded and smart enough to learn from other cities that experienced creative growth, then we can seize the opportunity offered to us. Our business and Civic leaders can do remarkable things and in the end, we will have something to be remarkably proud of.

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Missed Opportunities in Hiring Practices

February 25th, 2011

About a year ago, while advising a manufacturing company on ways to get “unstuck” we began to look into current policies and practices that they had been following. It became apparent that part of the challenge facing them was tied to a lack of innovative management and leadership.

This shifted our focus to their management teams themselves.  I asked the Senior Partners about the vetting process their HR department was directed to take. “We just follow the advice of our HR director, Charles replied, basically a couple of criteria’s need to be met before we will even consider them”

  1. A Bachelors degree or more
  2. A history of good credit
  3. Un-interrupted employment history.

“Interesting,” I replied. “Now how did your HR director arrive at this?” “Don’t know for sure he replied, let’s bring her in and the two of you can discuss it.”

The HR Director conveyed a solid argument regarding her department’s criteria. “We want to be sure that the candidate have a solid education, particularly in the areas that we will need him/her to conduct themselves.” Makes sense, I replied, but what if the candidate turns out to be one of those non-scholastic types, (like some of our greatest entrepreneurs? – Google successful business people who never finished college) Shouldn’t you also consider their practical experience? This means that their list of accomplishments match or outweigh college experience.

“Credit worthiness,” she explained, helps us to look at the maturity, reliability, character and moral judgment the candidate may have.” Really? I challenged, what about the individual who had previously maintained a stellar credit rating but was wiped out during the recession?

Finally, the newest game in town, an uninterrupted employment history. “We feel that one losses his or her edge if they are unemployed for a period of time. I mean, time moves on and things change,” she explained. “Besides, if they are good, they will never have been laid off in the first place – they are truly the cream of the crop,” she proudly concluded. “And, that’s what we want!”

This reasoning fails to hold much water, I replied. The last several years have seen millions of businesses either downsize or go under entirely. With them, exceptionally talented and dedicated employees.

I requested that I be allowed to by-pass the process that the companies HR department had established to demonstrate a point. Taking it upon myself to select candidates who would not have otherwise been considered.

Gary 36, has no college degree other than a few years in college courses. Nevertheless, he is always reading and self-educating himself. Because of his non-conventional and entrepreneurial approach, he single handedly grew the company’s market share by 17% during a time when competition was scrambling to maintain their positions in the market place.

David 52, who had lost his job at the beginning of the Great Recession tried desperately to find a new one. Like many talented individuals, he was either pegged as over-employed or not told, that he was too old.Regrettably, he was caught in the mortgage crises and eventually lost his home a year and a half later. In addition, because he went through his cash reserves (he also had two children in college) his credit became damaged goods. Ironically, six months after being retained by our client, he has streamlined their logistics and supply chain saving them 11% over previous years.

Finally, there is Heather 30. She was a young and energetic Sales Director with a prestigious marketing firm in San Francisco until they were forced to downsize. Her job separation kept her un-employed for nine months until she finally got her opportunity to work again. After recommending her to the Sales Manager position, she re-built the sales team and established strategies and new benchmarks necessary to bring better clarity and results. Said one of the Senior Partners recently, “we have never witnessed such a turnaround in our sales force in terms of objectives, results and attitude. She’s good!”

The lesson learned from this engagement confirmed what many people already know. That some of the best people in today’s workforce are the ones that may otherwise be passed up or forgotten about.

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WHEN SICK POLICIES MAKE FOR SICK EMPLOYEES

February 16th, 2011

Picture this, a woman sits at her desk coughing and sneezing into a soiled piece of tissue. As she does, looking sick and miserable, her co-worker tells her that her appointment (a customer) is here to meet with her. For a moment, she sighs in anticipation of the ghastly prospect of meeting while feeling sooooo sick. Suddenly the Alka Seltzer cartoon character appears to assure her that with him, everything will be just fine. “Yes, Ms. Office Cubicle Hero, you too can be the strong trooper for your company and even sick, can grind through your day – because Alka Seltzer will ease your symptoms!”

What the ad fails to convey is that Ms. Office Cubicle Hero will most probably infect over half the office with her illness, not to mention her customers! Now how irresponsible is that??!! Unfortunately, many companies still don’t get it.

Pressuring people to come in sick only worsens the level of productivity and loyalty. Customers don’t like it either. For many, it is almost akin to doing business in a dirty rest room. You wouldn’t  want to meet there, would you?

While conducting employee interviews designed to improve motivation and performance, we run across this issue and concern too often. “Why, personnel will ask, are we expected to come in sick and infect our fellow workers?” Not only is this kind of policy short sighted from the perspective of productivity, but it is also a policy that breeds resentment and passive aggressive behavior.

Customer surveys reflect an equally negative perception, particularly in food service sectors. Wrote one customer, “I am glad to have had the opportunity to fill out this survey today. I really have a problem with your establishment having my food served by someone who is obviously sick and should not have come to work. Consider this note as my “never to return again notice. My money is better spent on businesses that actually care about their people and customers alike!”

It is time that this be a hero by coming in sick mentality be stamped out once and for all. Let’s begin with responsible HR policies regarding sick leave (even in a bad economy), and hope that the proprietors of items that mask the symptoms, but not cure the illness will get the message as well.

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My wish list for the country

December 17th, 2010

OK, I admit it, it is actually long but here are some of the things I wish for, and would like to share. Consider it my wish list for 2011:

Create a unified national incubator for start-up considerations where candidates are judged on their ideas and likelihood to succeed rather than just their credit scores and current equity. This should not mean that anything goes and candidates should not be vetted. On the contrary.

Nevertheless, it does reflect my own professional experiences from reviewing hundreds of start-up considerations who had retained our services. Yes, their concept was sound and its potential good. Except, they did not have a couple of hundred thousand to seed their idea, and Investors were not interested unless they did. My colleagues and I agree that if just one forth of these start-ups had been funded, then even after the potential for failure rate –thousands of jobs would have been created! And that’s just from the start-up considerations that we reviewed.

Funding for this would also provide for qualified professionals in the areas of strategy, management, branding and advertising to oversee the projects until they become self-sufficient. Imagine how much further, our economy may be if the Stimulus money went into helping qualified start-up considerations instead?

A complete overhaul of our current tax code – to truly differentiate big corporate, from mid-size and small business – not to mention over compensated Wall Street CEOs from small business owners. Now I realize that I really need 10 pages to adequately explain the particulars, (and feel free to call me if you would like to hear more), but let’s just begin with the premise.

While I don’t agree with the Death Tax I certainly feel that the fat cats who got away with destroying the economy should be paying a much higher percentage of taxes for all of their bonuses – particularly when their compensation is so imbalanced with that of their average employees. Small businesses (the true backbone of the economy) should be given the largest breaks so that they can continue long-term sustainable growth.

Moreover, if nobody is aware of it yet, we ARE in big trouble financially and yes, we all need to be prepared for some sacrifices if we are going to have much of a country to left our children. Please refer to the history of great powers of the past. Begin with Spain and follow-up with the collapse of the British Empire.

Adapt total pricing standards to

Give teachers the power to teach by demanding respect and courtesy from not only the students, but from the parents as well. We can throw trillions of dollars at education but if the teachers are not appreciated or respected, then what’s the point? We are falling fast in the area of education. How many teachers in Asian countries are treated with the level of disrespect that our teachers are?

Speaking of: Why aren’t we teaching all middle school students about money management, investment, consumerism and credit? Hmmmmm.

Finally, let’s stop thinking in terms of pro-union, pro-business, Red State, Blue State, but hey, “what’s good for the country?”

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Customers: When they don’t return due to silly policies

October 28th, 2010

Recently I dined at a popular eatery in Northwest Austin. The well dressed man in front of me had just ordered his meal and then after paying for it, held out his stamp card (frequent stamps provide for a free meal) and began: “Last time I was here, I forgot my card; would you be able to stamp it for last time as well?”

The order taker declined exclaiming that it was not the policy to accommodate customers who failed to remember their stamp previously and that there were no exceptions to the rule.

Forty-five minutes later, as I was leaving the premises, I overheard two professionals chatting about their dining experience.  One of them was the man who had been declined the stamp for his previous meal “I am never returning to this place again, he fumed – I don’t care how good the food is!”His friend tried to reason with him. He even emphasized that it had been part of their Friday tradition for over 1.5 years to visit the eatery but to no avail.

How sad, I thought to myself, that one silly shortsighted policy could cost so much money. Out of curiosity, I calculated the following:

10 meals required to receive a complementary meal = $10.00 average = $100.00 – less $10.00 (one meal) = $90.00.So, if he had been dining at least once a week (as it appeared in the conversation) then:

52 weeks = $520.00 x 1.5 years = $780.00.

Here are the facts:

The man did not look like he was not a scammer but an honest professional. He had happily patronized the Café for over a year. It was a tradition. He had a simple request, which was denied and then left and stating, “he, would not be back”.

Many places will consider request such as the one the regular customer had on a case-by-case basis. It takes a small amount of discernment to sort the free loaders from the sincere. However, establishments that fail to do so with blanket policy decisions tend to end up spending far more money on bringing in new customers rather keeping existing ones.

So here is my question, “was declining his request for a simple stamp worth it?”

Last weekend I took my boy to a new donut place up on Parmer near Cedar Park. Looking forward to a new experience, we ordered nearly 9.00 worth of donuts milk and coffee. As always, I also requested regular sized water with extra ice. The owner held up a tiny cup and stated that he could offer me “this size only “as a courtesy. “Otherwise he continued, I have to charge you for a regular drink.”

Sitting down I asked George how many people he thinks actually make the same water request that I do. “Not many he replied. Most people don’t drink as much water as you” I then challenged him to a lesson in Business 101. What was our intention of coming in here today I asked? To try a new place”, he replied. In addition, “how many times a month do you think we would return if we had a pleasant experience? Probably, well, at least twice a month. “So, if we spent $9.00 per visit X 2 X 12 months, how much is that?” $216.00. Moreover, how much would the regular size cup probably really cost him? .25 x 2 = .50 x 12 = $6.00 per year. So, how much was it costing him a year by losing me as a customer? $216.00 – $6.00 = $210.00.

“Was declining a request for regular size water worth it?”

Everyone understands the basic premise that it is less expensive to keep a customer then to lose one. Great companies learned this that hard way when they failed to pay attention to customer nurturing. Instead, billions of dollars continue to be spent annually to lure new customers – where if businesses both large and small spent less keeping their existing ones happy, then they would have more resources to build out and expand and yes, increase the chances for higher profits!

“So, are short-sighted policies that deny simple courtesies to customers always a smart idea?”

Well, you do the math.

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