Dear Business Owner: How much did that 20 cents just cost you?

While enjoying a quick lunch break sitting outside a local coffee house I witnessed a scene at an adjoining shop that will likely have negative consequences for the business owner.  The tragedy here is that the business owner will likely never know about it, will not have an opportunity to “fix” it, and is likely to lose more money because of it.  Additionally, this probably happens all too often and it’s such an easy item to correct.

The details:

A man exits a juice shop and is telling someone on his cell phone that he pulled out a $5 bill and the total was $5.20, so he had to go back to his car for the additional 20 cents.  He was unhappy about it and was already spreading the word.  To his phone friend, any people in earshot, and quite likely to anyone else he might speak with today.  It's quite possible that he will avoid this establishment in the future.

Granted, he DID owe 20 cents and by all accounts he should have to pay it.  The counter person was simply doing his/her job.

However, maybe it’s time for a new way of thinking.  Consider the lifetime value of that customer.  Over time, how much money would the business owner earn from that single customer?  Most likely much more than 20 cents.  Any future earnings from this customer might now be lost.

The fix:

If the store owner instructed staff that anytime anyone is short (up to a predetermined limit - maybe 50 cents) the employee is to smile and say "no worries, it’s on us this time" think of how the situation would have instantly turned around.  Instead of spreading negative comments about the store to his phone friend, innocent bystanders, and probably several others that the customer will see today, he instead would have been praising the store and spreading positive news.

• Negative word of mouth drives customers away (even when it’s not justified)
• Positive work of mouth drives business in

For 20 cents, the business owner may have lost one, two or more customers.  The opposite might have happened if the business had “covered” the 20 cents.

Little changes like this can help businesses gain loyal customers, who in turn tell their friends and family what a great place this is to shop, increasing their business from referrals.