Oftentimes when an organization is going through a downturn in its business cycle, industry cycle, or economic cycle, it is faced with trade-offs that leaders likely wouldn’t consider making during more robust cycles. According to columnist and business book author Kevin Maney, who recently wrote Trade-Off: Why Some Things Catch On and Others Don’t (which will be reviewed in January’s Just-In Newsletter), these organization must often choose between Quality and Convenience.
In down market moments, it is tempting for businesses who stand for quality to give up some of that quality in an effort to maintain margin. Tiffany once tried that by selling trinkets for under $100, and it began to destroy its upscale brand. I ran across another such business, doing perhaps irreparable harm to its brand, while vacationing recently in Steamboat Springs, CO.
I have been skiing since I was four and a professional ski instructor for many years. After a good year in the coaching business, I decided I would spoil myself and went to the highest quality place to buy boots, Surefoot. Before I went into the shop, I did my pre-shopping on-line to understand more about boot fitting and what boots I might find that fit my feet (which are wide and have a high instep). There were a number of boots on sale on-line–which struck me as unusual, since Surefoot is not known as a discounter or for high convenience. Their customer promise is essentially “no matter what it takes, we will get your boots to fit right.”
The salesperson I got was an expert’s expert and we quickly settled on the best pair of boots for me. Before the filling process began, however, to customize the boots, I asked, “Are these boots on sale because I thought I noticed them on the web on sale?” He responded,”No, but if you want a boot that is on sale, I can find one for you. But then we will have to do a lot of modification, and I don’t think you will be happy.” Along the way, he up-sells me into heaters and then tries to sell me orthodics for my tennis shoes, a box of 12 pairs of ski socks (I thought he was kidding until I saw them up at the register), and more stuff! Yes, an entire box of socks! By this time I was feeling like I went into Tiffany & Co. to buy quality and I walked out of a bad used-car lot.
I have to say, the boots are great and that is the biggest part of the promise. But, for the price, I shouldn’t have left the store feeling like fresh meat, hung out for the lions to chew on! When I got back home, I looked up the boots on-line and, sure enough, they were on sale. Talk about not keeping the customer promise! Instead of going back when I was mad, I decided to go back later.
When I returned to the store, I asked if they would reimburse me on the price difference. The manager said that the web-site pricing and store pricing are never the same. I told him that as a customer I saw Surefoot as one brand, not two different ones. I invited him to make a choice, “Do you want to be one brand or two?” In the end, I received store credit, which I did not need or want, and they were left with a tarnished brand in my mind. I used to think of them as a high-end, high-quality firm and yet they treated me like a ski shop of convenience with low prices and lack of professionalism/integrity.
I have been seeing this trend repeat itself so many times from reliable brands and businesses that have never operated this way before. It’s a result of the down cycle, of course, but the damage to the brand promise may last well beyond this particular cycle.
Here’s another twist on the Trade-Off between Quality and Convenience. The other evening, I went with my family to have dinner at a major hotel only to find the grill closed. We were directed into the upscale dining area and told we would have many of the same menu items. The lights were not dimmed as usual, but turned bright to give more of a family-atmosphere feel. The menu had both high-end-dining items (High Quality) and items from the grill (High Convenience). Every guest looking for high convenience (Eat and Run), however, became extremely frustrated with the high quality pace of service: slow. The manager and wait staff had to repeatedly apologize to all the tables around us for the slow service during the meal. It would appear that the company wanted to reduce cost by closing one of the kitchens early and decided to blend the two restaurants’ traffic together. Unfortunately, when you try to do both High Convenience and High Quality, you do both a disservice. It took close to an hour to be served our burgers and salads.
In these economic times, you need to trim expenses but not so you tarnish your brand and lose your customers for good. It will be some time before I will recommend either Surefoot or one of these restaurants to anyone–during a good or bad cycle.
Do you know which customer you are trying to serve? Are you making too many cuts that will lead your customers to your competitors’ doors? Remember what Abraham Lincoln said, “A house divided against itself cannot stand.” He may have been talking about a country in peril, but this truth to you should be self-evident!