How to Create a New Starting Point with Your Clients
One of the business case stories that has always fascinated me is about an Israeli day care centre where the staff became increasingly frustrated by parents who came after closing time to pick up their children.
The issue was growing as more and more parents came later.
The staff could not just close the doors and keep the children overnight, refusing to let the parents in. That would also destroy their business model and double their costs.
Nor could they just lock up and send the staff home and leave the children on the curb. Their moral responsibility did not permit this.
They asked and asked for cooperation from the parents, but they did not receive it. There were always excuses.
They came up with the idea that they would impose a fine on parents who were late. Confident that this would solve the problem, they announced the solution and made sure the parents understood the repercussions of their actions.
The unexpected happen. Not only did the late parent arrivals not stop, they actually increased!
When they imposed the fine, about 25 percent of the parents came late to get their children. After the fine, about 33 percent came late. That number kept growing until four months after the imposing of the fine, about 40 percent of the parents arrived late.
What happened is that the parents interpreted the “fine” as a “price” for keeping the children longer. They were happy to pay it. Their moral obligation to arrive on time was replaced with an economic obligation of simply paying more for the convenience of a later pick-up time.
You see this behavior manifested in other ways every day. How many times have you heard someone say they don’t run out and put money in parking metres? Instead, they park in a great spot near their business and just pay the parking ticket every day…it is more convenient. They too interpret their action not as breaking the law, but rather as paying for convenience.
If a variation of this happens to your business, and your customers suddenly won’t play by your rules, how do you move things back to a new starting point?
You have two choices:
- You rethink your business model, recognizing that your customers want convenience and they are willing to pay for it. Offer them different tiers of service and ensure that the additional prices you request cover your costs and create new profit streams for you.
- You appeal to their better nature to bring non-compliance back to a moral issue. This is very difficult to achieve, since patterns of behavior, once-established, are hard to change.
This story is important as you grow your business because you have to really think through what happens when you rely heavily on special customer rewards and discounts and other financial incentives to lure new customers in.
You have to always be sure that the incentive you offer still makes good business sense, because there is always a chance that your customers will start to see that incentive as the norm.
When you are in business, every customer wants a little more. They want discounts if their business volume rises with you. They want discounts if they think their job is a little less difficult than another job. They want discounts or added services to ensure their long-term loyalty.
For every step you take, you need to go back to your starting point and make sure that it can work for you if it becomes your new business model. Do your thinking before you make the change, because once customers secure a new convenience or service, they are not going to part with it easily.
At the crux of it all is knowing and deeply understanding your own value. That is the original starting point.
Paula Morand, CSP is a leadership building, revenue boosting, strategy expanding keynote speaker, author and visionary. This dreaming big and being bold leadership expert and brand strategist brings her vibrant energy, humor and wisdom to ignite individuals, organizations and communities to lead change, growth and bold impact. 23 years, 25,000 clients, 19 countries, 11 books, former radio personality, 10x award winning entrepreneur and humorous emcee.
To check out Paula’s book, “Bold Courage: How Owning Your Awesome Changes Everything” go to Amazon http://ow.ly/i8yW307ix67
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