Have you noticed lately that the cost of things seems to be going up, but the value in many cases seems to be diminishing?
Increasing prices are absolutely expected as production and service costs rise, but people must see a benefit from paying more.
Our Australian Post Service have been quite overt in advising us that their prices for postage will go up, but they will also be reducing the amount of days in which we have our post delivered, along with other business changes that are designed to give us less for more.
Health funds, with the help of the government, have again put costs up while at the same time reducing the number of procedures and services
that are now covered under their health plans.
Australian airline companies have again increased their fares, while at the same time removing services such as meals on short trips and the ability to use frequent flyer points when you want to. All things that were a part of the deal when you joined their frequent flyer club and why you chose them over the competition.
A major Australian Bank that I have been using for business for many years, when questioned about their diminishing service, admitted to me just recently that they are not focusing on assisting small businesses anymore because it costs them too much. They will now only be working closely with the big end of town. At the same time they are still advertising themselves as the ‘Small Business Bank’.
So many of these companies are just mean-spirited and in certain cases are in this situation through poor management, not because of a changing economy.
The list goes on!
It is not the fact that these companies have increased their prices that concerns me, because operational costs have indeed gone up, it is the fact that they increase their costs and also take away benefits that have been an expectation of their loyal customers.
So why do we just accept it?
These mean-spirited businesses now have a shorter shelf life than they used to have because people now vote with their feet. Unfortunately, most of them don’t realise it until it is too late.
I have worked with many mean-spirited businesses.
Ironically, these same companies that demand more for less are themselves always looking for discounts. They will go with another provider to save a few dollars and then get burned.
Some years ago I was working with a substantial Australian business that had found itself in debt by about $1m. So they set out immediately on a cost-cutting exercise right across the business. Now this is the correct thing to do, but how they did it resulted in irreparable damage for the business.
They spent time developing their strategy and then planned the big roll out with staff. Their first activity to recoup this $1m was to remove all subsidised hot chocolate from the staff room. Staff now had to bring their own!
I don’t need to tell you what happened to morale and trust. It was mean-spirited and as a result they saw many good employees leave.
It wasn’t the hot chocolate that was the issue, it was the lack of respect and care for their staff.
But just like mean-spirited businesses, there are also mean-spirited people, trying to get as much as they can out of the business and out of each other, as they can. We see this manifest itself when people are putting in travel expense claims in their workplaces. Some people will claim every cup of coffee, even if they would have had one in any case, while others claim what is reasonable and right.
When they are like this they will never have the spirit of generosity that you need to promote your business.
Have A Generous Spirit
What if you turned the tables around and said – let’s provide more?
What if next time we put our prices up to meet demanding costs, we looked for ways that we could build the experience for people so that they could see what they were getting for the extra cost?
What some businesses don’t realise is that it is not all about money. It is about the experience and experience does not always cost us a great deal.
So what can we do next time we need to increase our prices?
An experience is very different to getting a new set of steak knives or a free iPad.
These are short-term marketing gimmicks that do not create brand awareness or brand loyalty.
What people are looking for is something that compliments and supports the product or service they have bought.
If you purchase a new computer, maybe free lessons on how to use all of its features would be a good thing. Apple does this well.
In many cases when you purchase a vehicle now, you receive several free services and you can sit in their waiting area on your computer while your vehicle is serviced. It becomes an experience rather than a chore.
When you go to an expensive restaurant, you stop measuring its worth by the size of the meal, but you focus on the exquisite tastes, the impeccable service and the way that they match wines with the meal. It becomes more than just a meal, but an experience.
I discovered this first hand when I went to dinner at possibly Melbourne’s best restaurant Vue De Monde. I had heard so much about it, but couldn’t really understand the hype, until I dined there.
The service was impeccable. I experienced tastes that I had never experienced before. I ate things that I thought I would never eat and loved them. It was simply an amazing experience. Was it expensive? Yes! But was the experience worth it?
After we had eaten all we could eat, on departing we were met at the door with a small bag of goodies. It was our breakfast for the next morning. Some homemade bread and muesli accompanied by some tea and jams. What an amazing touch.
I can’t even remember what we ate that night, but I certainly can remember the experience and have spoken to many others about it.
Walking out of the restaurant I can remember thinking; I don’t care what it cost, it was worth every cent.
Sometimes just great service with the price increase may be enough, rather than a justification mentality that breaks down relationships.
My point is this; it is not the fact that prices go up, but rather the fact that we get less for more and not more for less.
But the ‘more’ cannot just be a gimmick, it must add value to the product or service and must help the purchaser to have a greater experience for the money they have spent.
Running a business can be challenging at times, but it is not rocket science.
Create great products, deliver great service, show respect and build generosity into your business actions and you will ensure that the majority of people you work with will continue to support you even when you have to make those tough business decisions.
So, make your business mantra, More For Less – not – Less For More and then begin to grow your business through generosity. You will be amazed at the difference it makes to both your culture and your bottom line.
By Des Penny
CEO and Founder of Proteus Enterprises Pty Ltd.