(DASM= Dumb ass, stupid management)
The Big Squeeze
Outstanding businesses attempt to improve and increase their value to customers, thereby enabling higher prices/fees and enhanced customer loyalty and referral business.
But if you walk out the door these days, you’re not in any danger of tripping over those outstanding businesses.
Here are just a few examples of what airlines have done:
• Reduced amenities.
• Increased annoying charges for meals, luggage, leg room, etc.
• Penalized customers who choose to deal with people and not computers.
• Decreased ticket flexibility and change options.
• Implemented fees for merely holding our money.
• Eliminated amenities such as free checking.
• Reduced services and hours at local branches.
• Increased fees for typical services (e.g., stop payments).
• Annoying stick-on ads on front pages which must be removed.
• Charging for obituary notices.
• Increased charges for home delivery.
• Reduced news space and news influenced by advertisers.
And credit card companies:
• Increased monthly fees.
• Reduced billing cycle times requiring faster payment.
• Draconian penalties for missing a payment date or minimum amount.
• Interest rates far higher than economically necessary.
I could go on, but I have space limitations. Stupid management takes the constant position of regarding the customer both as a problem and an ATM. (“This business would be great if it weren’t for the customers.”) I remember interviewing a candidate for managing director of a theater company. “Why did the theater you left almost go bankrupt?” I asked. “Because,” he immediately responded, “the audience was biased and didn’t understand out offerings.”
Oh. But you can’t fire an audience, can you?
Enlightened leadership understands the obligation to increase value. Dumb-ass, stupid leadership simply strives to perpetuate the enterprise, meaning you cut services and exploit the customers. (If you’ve been flying airlines and dealing with banks and DON’T feel exploited, you have a higher threshold of outrage than I do.)
For consultants, the opportunity is clear and so is the challenge. First, find prospects and buyers who believe in value and investing in business. Eschew those who want to squeeze the customer and sell the conference tables.
Second, when you find clients sliding into reducing its value for any reason, tell your buyers you have just three words for them: Bank of America. Amadeo Giannini would be spinning in his grave, but I think there’s an extra charge for spinning these days.
© Alan Weiss 2011. All rights reserved.