Business Turnaround

“We don’t take that card.”
Digging in my wallet for cash, I said “No problem,” but mentally I deducted 10 points off of the service scale for what the business books call a “customer sacrifice.” Sacrifices refer to the gaps between what your customer wants and what you are willing to give. In this case, if I want to shop here I have to sacrifice the use of my American Express.

Maybe that sounds like a small thing, but it’s a classic example of the sacrifices businesses ask their customers to make every day, like:

* Waiting in line.
* Taking a number.
* This section closed.
* Please use other door.
* No bills larger than $20.
* For faster service, press 1.   
* We're all out of that flavor.
* We don't take reservations.

I’m sure you can make a list of your your own. Sacrifices usually negatively impact your time, money, or convenience. Almost all businesses demand some sacrifice from their customers. And I know most businesses have perfectly sound reasons for doing so. I'm not saying they aren't reasonable. I'm saying that customers don't care.

Business owners try to justify the sacrifice. In the case of AMX, I’ve heard this story more than once: “Well, you see, American Express charges the merchant a higher percentage for handling its card, than blah, blah, blah.” And as a merchant who does offer AMX, I happen to know that's true. But, in "customerspeak," that’s your problem, not mine. I’ve even had some salespeople tell me that they are trying to keep their prices lower and taking American Express would force them to charge more. Funny, I know their competitors accept American Express and charge the same price as they do. Besides, it’s not my job as the customer to guarantee the size of their profit margin.

Most of the time, you don’t recognize the sacrifices you ask your customers to make, because you see them as minor inconveniences.

Perhaps.

But, accumulate enough of them and soon you’ll have a customer exodus on your hands. Customers are getting better at spotting a sacrifice and chances are you have a competitor who’s successfully eliminated the same sacrifice you’re asking customers to make.

In 2008, customers will increasingly become more selective about where they spend their money, and they’re certainly not expecting to make sacrifices. Close the gap between what your customers want and what you’re willing to give, or your competitors may close it before you.

If you have examples of sacrifices you’ve experienced when you’re the customer, send them in a comment to this blog, or email me at [email protected]. I'd love to hear from you.