Tuesday, October 26, 2010
There's Anger Over Having To Offer Discounts
It'd be one thing if you were the only so-and-so merchant in town, like the only gas station or the only craft shop or the only pizza place. But because you have to compete against a bunch of other cutthroats, that means you have to offer discounts, and really bend over backwards to get customers. It can be tough on quotas and profit margins. But because a guy needs a job, he has to do it.
I'm real reluctant to buy anything, because I don't want to make these guys feel worse having a sale than they would not having it. Because I've talked to enough of them, I know what they're feeling. One thing I can say, these guys hate debit cards, true. One, they have to pay a little fee every time you use one. That's a very practical reason not to like them. But the second big reason is a psychological reason, because the customer's almost dismissive of the importance of the sale when he's just flashing plastic. Back in the old days, the businessman was more in charge, psychologically, in the transaction, because the customer had to carefully count out a number of bills and pieces of change. The businessman could see the approach of buyer's remorse on the guy's face, knowing that the farther they went in the transaction, the more he had the guy over the barrel. There was something of a victorious feeling in making a sale when the customer was putting some real thought and even sweat into the transaction. But now, they flash the plastic, and it barely registers on their blank visage; what they show, in fact, is a look of entitlement. It puts the businessman in the back seat, or in the inferior position.
I've sold things at craft sales. See one of my posts on selling Easter bunnies at Easter. So I know how livid the businessman is right below the surface. I felt that too. The customer has that sense of entitlement that's disgusting. I saw it clearly when I had to put a discount on my bunnies just to move a few of them. It makes you bitter. And bitterness gnaws on you till it bursts into full rage unless you get a grip on yourself. I think it's good to have a few cardboard boxes and a club right outside the back door of your business, so you can go out and beat and kick them, anything to bring down the rage at having to offer discounts.
Just the other night, I had a guy at a pizza place telling me some of his troubles. He's a guy I've known for some time, so it didn't take long to loosen his tongue. He's the perfect illustration of this business principle in action.
The orders came down from headquarters, sell a large 3-topper pizza for $10. OK, since they're normally between $14-16 -- supposed to be -- that means knocking $4-6 off each one, a killer. So the customer naturally has the audacity to order a 3-topper for $10, then the guy has to say to them, "You saved $5 on your order," or whatever it was. Gritting his teeth the whole time.
I was commiserating, "That's terrible ... you could probably use that $5!" He readily agreed. But he said it apparently didn't matter, because the customers are all going crazy for the discount. Meaning the rest of the menu, the specialty pizzas, and most importantly the profit margin, are suffering. He said, "Everyone goes for the discount. They won't order a pizza at full price anymore. Oh no!" He wiped his hands on a towel, getting off some pepperoni grease. "They're looking for good values. They don't realize it costs us money, which we're losing hand over fist!"
He seemed embarrassed to be unloading on me, maybe since I hadn't ordered yet, and of course I would've been ordering one of the discount pizzas. But since he'd gone that far, he continued, pointing at the drink machine. "And the same thing goes for the free refills -- it's killing us! The worst thing they ever did was give the customer free access to the drink machine!" I saw he had a couple of handmade signs on the drink machine: "Refills for guests dining in only," "No outside cups," and "Even ice costs us something -- please hold down your portions." This I hadn't imagined, and obviously I would've been drinking my fill as well, but of course I didn't dare to now.
He asked what I wanted, but I was a little afraid to order anything, so I made up a story about having just eaten at the big $5 All-You-Can-Eat buffet down the street, and said I was just dropping in to say hello. That seemed to soothe his frayed nerves, because he didn't have to get his hands greasy again making me a discount pizza.
Business is tough. And we can all help out by paying full price. Please think about those discounts you see. They're killing the little guy.