John DiJulius | Customer Experience Blog


ARE YOU FISHING WHEN THE FISH ARE BITING?
John DiJulius

John DiJulius

I recently I was in a busy restaurant/diner on a Saturday around 12:45 in the afternoon where the waitress was telling me how slow they were, except on Saturdays. Then almost on cue, a couple walked in and was told that the restaurant was closing at 1 pm, and they were turned away. I found it comical that a restaurant is not taking advantage of peak times and is turning business away.

Blind Sheep

Then I started thinking about my salon & spa business and wondered if we were fishing when the fish were biting. I realized we were not optimizing our own peak times. In the salon & spa business, we have extremely customer-friendly hours, 8 to 8 Monday through Friday, and 9-5 on Saturday. However, on Saturdays, like most retail businesses, we could add 20% more staff and still not accommodate the demand we have. Yet we are open only 8 hours compared to 12 hours we are open the other five slower days. Why? Because that is the way the industry has always done it. As a result, we changed our hours on Saturdays to 8 am to 7 pm, thus adding almost 40% more revenue opportunity to our peak day.

I had a similar experience with one of my restaurant franchise clients. Back a few years ago when times were good, their Friday and Saturday business was slammed, so they tried to push business toward the weekdays, which was understandable. However, as a result they realized they were under resourced in hours and staff for weekends and were not capturing all the business that they could during their peak times.

Are you competing on Price or Experience

Today so many companies are abandoning who they are and getting caught up in the price wars. Stop!! Reconsider what you are doing. There are other ways to compete. Last year we had a new salon open up across the street from us that advertised this:

Some of our staff panicked. They feared we would go out of business since our prices can be as much as $100 for a haircut. Our management team reminded them that we don’t get caught up in the price wars. We will continue to focus on the value we deliver, increase that value, and ensure we are providing the experience that we promise. Instead of worrying about lowering our prices, we advertised this:

I am sad to report that salon didn’t stay open 10 months.

Need more proof?

In the Wall Street Journal last July, this article ran:

Here is a sample of what the article said:

The deep discounts that restaurant chains have been offering to lure cash-strapped customers out of their kitchens are coming back to bite them. Restaurant chains ranging from Denny’s to Applebee’s this year have been giving away food or offering deals to boost traffic slowed by the recession.

But as several chains prepare to report second quarter earnings in coming weeks, Wall Street is bracing for news that price cuts not only ate into profits but also failed to bring in as many customers as hoped.

Be careful not to get lured into the price wars. Many times it isn’t profitable at all. At the end of the day, you just compromised the perception of your brand that possibly took you decades to build.

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