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Sunday, 2 February 2014

Is The Customer Always Right? Not Every Time – Try This For Size!

Over the past few weeks I have come across a very useful little piece of marketing advice, one that I recall that I discovered some time ago and promptly forgot. 

It is: 

·       You can have our product or service good, fast or cheap BUT – you can only have two of them. 

Just check this out.   

·       If you want a product that is good and cheap, then you can’t have it quickly. 

·       If you want a product that is good and you want it quickly then it won’t be cheap. 

·       If you want a product that is fast and cheap then it won’t be good. 

How true is that.  For example I have recently come across a business which prides itself on excellent fast service and very high quality.  Very admirable but, for example, when a customer calls on Friday to say that they want the product delivered by Monday the answer is “Yes, of course”. 

Equally admirable but manufacture of what is essentially a bespoke product means that there has to be extra shifts in place to fulfil the order over the weekend. 

Because the customer is very demanding they work is done as promised and the price is as normally quoted for normal delivery, in spite of the fact that they had to pay time and a half on Saturday and double time on Sunday. 

In other words they did the job superbly to the total satisfaction of the customer and at a margin so reduced that it wasn't worth taking on. 

That is a classic case of saying to the demanding customer: 

“Yes of course we can do it and at our usual high quality standard and as we will be working over the weekend the price will be.......” 

Conversely if you want it done quickly and refuse to pay a sensible price for the work then it is quite possible that the quality will suffer as corners will be cut. 

If they still demanded high quality and still refused to pay the extra then we can’t do the work in time demanded. 

While I am great proponent of total customer satisfaction there comes a time when the level of leg pulling can overwhelm rationality.  It can be done quietly without rancour.  It must be done so that the most important fact, hat of the gross margin, is protected as far as is feasible, at all times. 

The gross margin is the true income of the business and any reduction implies that the volume of sales has to increase to compensate and usually, this means to an unattainable level. 

It is essential that leaders constantly review the core values of the business.  Capitulation in front of a demanding customer does nothing but perhaps increase sales and probably decrease the true income and what is the point of that? 

Try adding the Good, Fast, Cheap offer to your core values and be firm in your maintenance of them.
 
 
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1 comment:

Financial Management Classes said...

Managing a total customer satisfaction there comes a time when the level of management. It can be done quietly without rancour. It must be done so that the most important fact, at all times. High quality standard and as we will be working over the weekend for financial management.