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being nice to your customer3/19
A post in the CNC forum about Stiles Machinery Service got me to thinking about an article I read in the Wall Street Journal this morning.
The article was about RyanAir, an up & coming low frills airline in Europe. They got a lot of press for their cost reduction exercises. They basically found a way to monetize every moment of the experience. They became famous for charging $2.00 to use the bathroom while in flight.
The problem was that this behavior wasn't perceived as good business for the bottom line. The ethic of decrease costs - increase revenue on EVERY line item backfired on RyanAir such that they were soon flying airplanes with 80% occupancy. Nothing they were doing could get any growth in customers.
Eventually the CEO tried just being nice to his customers. The results from this attitude change were profound. They are now the most successful airline in Europe by every metric.
The CEO was quoted as saying "If I would have known that just being nice to our customers would have had this much effect I would have done it much sooner!".
I certainly recognize that there are costs associated with having simple screws on hand and there are costs associated with just fielding the phone call to order the screw. There are benefits, however, (as the CEO of RyanAir will now attest), to also just thinking through how charging to use the bathroom might be perceived.
Nobody likes to be nickel & dimed. I can remember staying at the Hilton Hotel next door to the Anaheim Convention center for a woodworking show.
I had no problem with paying $120 a night for a basic room with a noisy toilet that wouldn't stop running. What I had a problem with was the service in the lobby. When we all spilled out of the elevator at 7am we were pretty hung over from the night before at the Hilton Bar.
A very nice woman greeted us and explained there would be quite a wait for breakfast as the restaurant was at capacity.Being business people nobody was surprised about this.
The really discouraging part was that she instead steered us to a place in the lobby where we could stand in line to get some coffee in a styrofoam cup for $1.75. The $120 room and overpriced drinks were just fine. The $1.75 coffee is what I am still annoyed at.
The Hilton is a hospitality industry. If that would have been my hotel I would have greeted these guests with complimentary newspapers, coffee & danish. The next year I stayed instead at the Jolly Roger Hotel around the corner. I could get just as shitty service there for only $80 a night.
It's been a while since woodworking shows were held in Anaheim but notice how long the story about bad service gets retold.
People buy for emotional reasons.
I have always stayed and some no-name dump sandwiched next to the convention center for sixty bucks. We were treated fine and didn't expect any more for what we paid. Went to the Hilton one time, ain't going back.
The flip side of that is when, I send cabinets out included are enough shelf clips. The contractor looses them I get a bit annoyed. I'd like to say "replacements can be purchased on isle #17..." Instead a pony up replacements, which no one offers to pay for.
I had that shelf pin problem with a general contractor one time.
He was always losing the shelf pins I provided so I took a half box of loose shelf pins and dumped them in his glove box. Every time he came up hard on a corner he could hear them rattle around. He never lost any more shelf pins.
I think you are very right. After the contract is signed I go into 'customer service mode' and I do not dicker about the small things although I note those things at the final 'credits and additions' invoice as 'no charge' so they know they got something for free. Not big items, but I think it provides good will.
Great post. I learned concept this the hard way.
A while back when I was running the family business, I had a competitor who was more expensive and who's quality was similar, yet his perceived quality was much higher. We were out of town, in the country and had delivery charges and consequently lower prices to compete.
Customers were subconsciously (or consciously) annoyed with our delivery charges, and the lower product prices lowered our product quality perception.
I cut the delivery charges and put the cost into the doors, which raised prices. The result was great. It got rid of the annoyance, increased our product quality perception, and made us appear more generous and our products more valuable. The only down side, is that you loose customers who are nickel and dime shopping everyone (GREAT!).
Since then, we've really pushed this as far as we can, and it pays big time!
What Pat Gilbert said.