Are Silly Rules Sabotaging Your Business?

“If your kids want chicken, they should order the chicken fingers…”

That’s what the manager told me when I tried to order the seemingly simple to prepare – lightly seasoned grilled chicken breast. That’s what my boys like. Well, 2 of my 3 sons anyway. The other prefers cheese pizza. (He got that from me.) A restaurant nearby used to accommodate our request – until recently.

Time after time we went there. Too many times to count. Sometimes it was just the five of us. Other times we brought along extended family – even in-laws. A few times it was with friends. Decent sized groups with large checks. Then they went all “transactional” on me.

They figured saying “no” today was more important than me saying “yes” to them in the future. That’s the definition of a transaction-based business. It’s caused by business owners and managers who refuse to acknowledge that what happens today might be a harbinger of things to come tomorrow, or the next day, or the following month.

A transactional business looks at today’s request and makes a decision in the moment. Sadly, it’s often based on a set of facts or a situation that makes no difference in the long run.

The lifetime-value business owner thinks, “will something I say today, or refuse to provide (or do), lessen the lifetime value of this customer? Will some arbitrary decision lessen the chance that he or she will come back?”

And if the answer is yes, he makes a change. He makes a different decision. He lets go of some onerous policy and simply does what the customer wants.

Doing the Math

The problem is that Josh and Ben only eat grilled chicken when we go out. I’m not sure why they roll that way (probably their mother), but it doesn’t matter. It’s not a crazy request and if the restaurant can’t accommodate – when they routinely put grilled chicken on a salad – we have to go somewhere else. When you do the math, the picture isn’t very pretty for a business like this.

If we spend $100 every time we go there and the restaurant is located within walking distance of our house, they have a problem. Their problem is me, (their customer), choosing to spend my money at one of the other seven restaurants located in our community. If we go there 10 times a year, maybe more, then their loss of business is even more magnified.

Our lifetime value far exceeds whatever hoops the chef must go through to provide a lightly seasoned chicken breast for two children who are trying to adopt good eating habits. (Somewhere Dr. Oz is rolling his eyes.) So the concept of meeting your customer’s needs is not for the birds (see how I did that?). This silly policy is causing them to lose business.

At least $1000 dollars this year, (10 visits x $100), and potentially up to $20,000 if we go there for the next 20 years (A premise that is plausible given that, a) it’s a good restaurant and b) we plan to stay where we live for a while).

To add salt to the wound, customers are far less likely to mention the amazing eggplant parmigiana they enjoyed on their last visit. But they are likely to talk about a business’s failure to meet their most basic needs. That’s just how that works.

The Meat of this Post

Take a good, honest look at your policies and procedures. Aim to eliminate one onerous policy of dubious merit the moment you finish reading these words. And please realize I’m not suggesting you violate laws in your pursuit of happy customers. Even my wholesaler friends can find a few obsolete rules that should be stricken from the books.

Whatever you do, pledge to remove a policy that may be making it harder to do business with you. Think lifetime value. Not what you’ll earn today; rather, what you’ll lose if you never see the customer again or if you fall out of favor. You’ll have a much easier time maximizing your bottom line with this approach.

That’s just the way it works.

 

Darryl Rosen is the former President and owner of Sam’s Wines & Spirits in Chicago.  Presently, he’s specializes in helping independent beverage retailers get and keep more customers.  For a completely FREE webinar revealing 3 simple strategies for quickly and dramatically exploding your profits, click here.

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