What is the relationship a business has with its customers?
If it's based on customer loyalty, it's like a marriage.
If it's based on a single experience, it's a cheap one night stand, where everyone gets momentarily satisfied, but someone feels used afterward.
Marriage is the result of love.
Loyalty is based on love.
Every business wants customer loyalty. Loyalty, like love, cannot be forced. Discounting is a method to buy someone's loyalty. Discounting is like buying a girl expensive jewelry to keep her around. Remove the gift and the girl picks up her loyalty and moves on. The love dissipates.
Just like the girl, if you stop the discounting the unloving customer finds another place to go.
She uses you. You don't mind because you're blinded. The transaction fills you up. You use her, just like she uses you.
Seems crazy and dysfunctional. Pareto's law says 80% of revenues come from the loyal 20% of customers. Translated, 20% of our customers love what we sell.
Money can't buy you love.
Discounting can't buy you loyalty.
Would you keep a wife who's only staying for the expensive gifts? Why would you try to keep a customer who's only looking for the discount?
Stop treating your loyal customers like whores. They love you. Discounting doesn't buy them. They come to you in trust and vulnerability.
Money can't buy you love.
Money can't buy you love.
I'll get you anything my friend if it makes you feel alright
I'll give you all I got to give if you say you'll love me too
I may not have a lot to give but what I got I'll give to you
Say you don't need no diamond ring and I'll be satisfied
Tell me that you want the kind of thing that money just can't buyI don't care too much for money, money can't buy me love
-The Beatles
With a background in finance and marketing, Rick Nicholson owned two highly successful restaurants before selling them to start a consulting business. His current company The Restaurant Ninjas provides tools to the foodservice industry to become more profitable. His book, "The Art of Restaurant Theft" can be downloaded for free at www.therestaurantninjas.com
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