The Tomatoes Ate Your Profits
Here is a tale of how to not lose your lunch and your profits.
I was in Calgary touring some operations when I had the chance to meet a potential new sales representative. An arrangement was made to meet at the local eatery and have a “get to know you” meeting. The meeting was going as planned right up and including to ordering lunch.
The server came over and took our lunch orders, while ordering I clearly specified to the server that I did not want any tomatoes on my cheeseburger. In fact, I went so far as to have the server repeat my order back to me, specifically confirming “no tomatoes.” Now, I do in fact eat tomatoes, but I am a bit moody about them. When, where, and in what form they are in, are all things I take into account; and I can assure you, it is a rarity that tomatoes have contact with my cheeseburgers. Clearly I have digressed, so back to the story…
The food arrived in a timely fashion and my anticipated cheeseburger was set down before me. But before I could sink my teeth in I saw disappointment in the form of red tomato slices. Despite clearly asking and confirming that they would not be on the cheeseburger, it was not the end of the world (although, I admit I was rather miffed.) I simply removed the unwanted tomatoes, ate my lunch, and finished my meeting.
I know, I know, it’s just a tomato, I took it off and still had a fine cheeseburger. It’s not worth a second thought…
If it were only that simple.
However, by looking at this occurrence as a non-issue, you end up overlooking a beneficial life lesson, as well as a specific and highly valuable business improvement opportunity.
Let me give you a little background on my viewpoint.
One of my daughters has specific food allergies and if she comes into contact with these food items she can have very serious allergic reactions, up to and including death. Everywhere she goes, she carries an EpiPen and if she develops an allergic reaction from one of the problem foods, she is to ram the needle into her thigh and get herself to the closest emergency room. I have seen this happen first hand and as a parent, it is the scariest thing you can imagine. Once everything is okay, you may just find yourself thinking about what just happened. Contemplating the fact that a nice dinner out, or the ingestion of a tomato, could have killed your child.
Thankfully my daughter is old enough to understand and keep track of it all, making a point to not eat things that she knows are “risk” items for her. Likewise, she must ask restaurant servers to confirm ingredients in a dish and may need to order menu items without certain ingredients to ensure that “risk” items are removed. If the information she is provided with is incorrect or if the order she has placed is not followed correctly, the results for her could literally be fatal. What’s worse is that this is the case for hundreds of thousands of people and their families.
The business lessons related to this appear simple on the surface level:
1. Know your products
2. Listen to your customers
3. Be able to effectively answer any and all questions related to your products
4. Supply what your customers are specifically requesting when and where they want it
5. Understand that custom orders are always a way to secure your customers long-term business
6. Leverage your ability to be a “unique” products supplier to special request customers and others like them
However, the reality is not so simple:
1. Most company’s sales/service staff do not really know their products. They only know how to deliver their products in an accepted method, driven by corporate-mandated Standard Operating Procedures (SOP) in which, “listen to your customer and adapt to meet their needs” is not so much as included, let alone acted on.
2. The skill of listening would appear to have died long ago with things like penmanship, common courtesy, and saying things like “please” and “thank you” (soon to be another sales essay all to itself.)
3. Training staff on product knowledge and how to then apply this knowledge is fading fast. Yet customers wanting to interact with knowledgeable and informed staff who are empowered to assist them is a consistently top rated customer request when assessing how top performing companies act and succeed in the marketplace. I would hazard a guess that the same people who would tell you they cannot afford to hire sharp staff, let alone cover the cost to train these staff, are in fact the same business owners who say that the big box store ate their lunch and stole their business. If this is you, think it over and get yourself a service/value based business plan built on real care of customer and then see how you are doing.
4. Most companies just want to sell mass-produced items, take your money, and have you quickly go on your own way. They play out this strategy every day and you, the customer, feel it every time. The very thought of integrating customized product options and related services into the front end of what they offer is lost; unless the business is a micro boutique literally built around the concept. While most companies have killed true customer service and thus listening to the customer’s needs, the companies who understand this on the macro level are clearly the front-runners in the sales business. When was the last time you took advantage of the customer service at Home Depot, or had a “made to order” menu item from McDonalds? Both are prime examples of companies that blend mass product distribution with a customer first philosophy; their success is built on listening to the customer’s needs and then meeting them.
5. Finally let’s come to terms with the value of a custom order. Have you ever tried to make a custom order at a big box store? In almost every case, you buy what they have and that’s it. Our needs are placed second to companies moving mass volume, while offering a competitive price point. You are a consumer with the power to spend, but you can only buy what is being offered in store; anything after that and you will need to engage a whole new type of sales enterprise, which will be utilizing a very different sales process. Suppliers and sellers who can deliver customized products and/or services should do so at every opportunity; making sure to market this ability as a major selling point. In my business, we know that price comes in (at best) in 5th or 6th place down the list of why a customer chooses to buy. The values that rank above price all have to do with the breadth and quality of products and services offered.
Supplying a customized product, service, or better yet a product/service combination that is truly based on listening to your customer, hearing what they have to say, and then incorporating their requests into what you offer them. This is what will set you apart from your competition, as it is rare that a customer expects a customized product, service or product/service package for the list price.
Given the opportunity, most people place great value on being heard and having unique solutions provided to them. Instead of being satisfied customers, these people will become loyal customers, willing to pay a premium price.
Think about it, what if you could supply your products and services in such a way that you were price competitive and your customer felt that they had been heard, accommodated and valued? You guessed it, the businesses that are capable of delivering this type of customer service are the big winners in what is a less than perfect economy.
Now let’s go back to the tomatoes…
On another day with similar lunch plans, I find myself in the same eatery in Calgary. This time, being helped by a different server, I again order the cheeseburger (yes, there is a lunch pattern here I do need to address,) and again make sure that the server repeats my order back to me, including that I DO NOT WANT any tomatoes on my cheeseburger.
When my order is ready, what do I get delivered to my table? You guessed it, a cheeseburger with tomatoes! This time I am just not up for this. I call the server over and tell her that she has A) not listened to me, B) not communicated my order right to the kitchen staff, and C) not checked my order prior to delivery to insure that good quality control was practiced, as she delivered a defective product to me.
I then proceeded to scare good customer service into her; telling her that if I had a serious allergy and had not noticed the tomatoes she had delivered to me, I may well be in the middle of a major allergic reaction at this very moment, sitting at her table. I continued my example, noting that if proper measures weren’t taken a severe allergic reaction could result in someone literally dying in the restaurant, right in front of her and she would be partially responsible for the situation. I then asked her (now a fully horrified server) if she would be so kind as to get me a completely new burger and to make sure that no tomatoes even came close to it, which she assured me would be the case, which it was.
Now let’s review:
1. Buyer orders product from seller
2. Seller does not really listen to customer
3. Seller produces product not in alignment with buyer’s order
4. Seller delivers a defective product to customer
5. Customer rejects product offering and demands new product
6. Seller (now really listening) retakes customer’s order, produces correct product, and delivers the correct product to customer
7. Customer pays seller
8. Seller has now paid at least 200% more in service costs
9. Seller has now paid at least 200% more in product manufacturing costs
10. Seller has lost all opportunities for staff to have sold to other customers (cost of lost opportunity)
11. Server gets no tip, so server’s personal income is reduced by over 50% on this sale
12. Customer decides never to return to seller’s location
13. Customer tells at least 12 other people (or blogs it to 30,000 readers per month) about their experience and influences their decision about doing business with seller
This trail finishes on the 13th point and I could have made a few more, but somehow is just seemed proper to finish this line of thinking on the old unlucky number 13.
Now you may be saying “Gerry, it’s just a cheeseburger. It’s like $8.00 and it’s not that big a deal, so chill out.” Well not a chance, if the seller does this 1 time in every 100 sales it’s a cost of doing business; but if this listening error is on the rise to say even 1 in 20 sales, then simple business calculations will show:
- A rise in raw material costs with no corresponding increases in sales revenue
- A drop in overall sales revenues as customers exit and tell others not to buy there
- A decrease in employee earnings and job satisfaction
- An across the board drop in profitability and a loss of business viability
One day the seller will wake up and ask, “where did the profits go?” The answer, The Tomatoes Ate Your Profits.
Overall, this is very bad news for the seller. In this case, everything that resulted could be traced back to the seller’s service staff not engaging customers with a positive attitude. Basic communications if done correctly would have simply consisted of listing to the customer, hearing them and then giving them what they asked for.
Let me give you another real life example that demonstrates this same philosophy.
This past spring I was in the market for a different vehicle so I called up an acquaintance of mine who sold (past tense) cars at a lot that specializes in late-model Japanese cars like Toyota, Nissan and Honda. After a short conversation to inform him of what I was looking for, he advised me that he would take a look at the lot’s inventory and call me back with a few options.
The next morning he calls me up and gives me the run down. After hearing about six or seven units, I am thinking that everything he is telling me about is a little too old and a little to plain; then he hits me with the real offer. I now realize that telling me about the first units was just to get me lined up for his real offer, and what an offer it was… a three-year old Infinity Q35 with very low mileage, for under $20,000.
That very day we are out for a test drive during my lunch hour. I am telling you, this was one fine automobile, it had everything money could buy. All the electronic due dads you could ever dream of, a deep navy blue exterior and a gorgeous tan leather and burl wood interior, it was simply a fantastic car, at a very decent price point.
My only conclusion, something had to be very wrong with this car and/or the cars situation. I sat my friend down over lunch (cheeseburgers) and we had a little talk. I told him I loved the car, but something had to be wrong with the situation, was it a re-position, rebuilt, a drug dealer’s car bought from the police auction, what was the story?
Well, after some further prodding the back story came out. My friend had a customer who asked him to find her a particular car (make, model, age, mileage, and specific trim package) inside a specific price range; if he could find the right unit at auction, confirm it with his customer, and buy it for her, he would get a favorable commission for his services. For my friend this was an easy service to provide so he worked out the paperwork and proceeded to find the right car. When he checked in with his customer, he assured her that the car he had found was as per their specifications, so the car was purchased at auction and delivery was set up with the customer.
Soon after, the customer comes to the dealership, takes one look at the car and tells my friend that the car is not acceptable as she had clearly outlined that the car was to have a gray leather and walnut interior. His unsatisfied customer left without the car, meaning my friend now owned the car.
This car was well above the lot’s usual day trade, so none of his regular clientele were interested in the car. In fact, this unit had been sitting around for a few months and was tying up a lot of the owner’s working capital. The car needed to go and I was his best opportunity to date.
It was the tomato episode all over again; someone did not listen to the customer or thought the customer wouldn’t mind a small variation to what they had clearly outlined. The result, business mayhem, except we are now talking about a $20,000 listening error; how many of those can any business afford to make? Did my friend (or the car lot owner) make any money on this deal or enhance his reputation? Not a chance. The final result, I bought a new Jeep and last I heard, my acquaintance is working at a different car lot.
All I can say about this is The Tomatoes Ate Your Profits.
What are the lessons we can learn from the above and how can we apply them?
1. Sales opportunities and good customer service both require active listening
- Developing good communications skills and using them at all times is a key element in any form of success
- Active listening is a developed skill; learn it, apply it and keep it sharp
2. Measure twice, cut once – get it right the first time
- Always make understanding (Covey) your first priority and make no assumptions
- We honor the speaker when we ask intelligent questions based on their outline, which also leaves the customer with the sense of truly being cared for
3. Customization builds a locked in customer/seller relationship, do this whenever you can and market your ability to do so
The big finish:
In all situations, in business and in life, listen with the goal of hearing and understanding others. This is a critical skill and one that will always bring the user a significant return on their investment. The more you learn to listen, the more your relationships will prosper. The intangible results such as friends, reputation and integrity and the tangible results like profits, lower costs and repeat customers will all abound.
When you hear someone bad mouthing the upset customer who just left, tell them “the tomatoes ate their profits and they should go tune up their listening skills and attitude.”
Thanks for reading,
Gerry L. Wiebe, Founder | President