Herman School of Business
What are Business Owners Thinking?
A Shop Owner last week had a customer come into her place and pick up an item she admired. You see, the customer had just purchased the exact same item a few days earlier at another Shop. And the customer paid twenty dollars more than the piece was marked. When the customer left the owner of the Shop immediately raised the price on her merchandise twenty dollars.
This is sheer stupidity. And the decision bodes poorly for the owner’s future. Either the owner was marking the goods up to a wrong price in the first place…and that makes me think other items are priced incorrectly, or even worse, the price was right and now her items are going to send customers out empty handed.
Instead of having a “good will ambassador” thrilled with seeing a store with lower prices, and probably sending many friends that way to save money on their purchases, the Shop owner has merely caved in to greed thinking the higher price will net more profits.
Pricing is a critical component that either brings customers back to buy again and again, or sends a message that people better bring a boatload of cash to shop at your place. This is true whether you are selling a product or a service. Should a plumber make over two hundred dollars an hour? Many plumbing companies charge a minimum that often makes a service call two hundred dollars for a job taking less than an hour. What about the fact that you wait several hours for the service call? There is no consideration for your time waiting, but you will pay for travel and the labor and you will wait hours for their arrival.
The mower belt broke last week on my John Deere lawn tractor and my two acre lawn was starting to look like a jungle. First I called the place where I bought the tractor just five years ago. They were out of business. I hit the yellow pages and went to the John Deere Dealers and called another one…out of business. What’s going on here? The third call was to Suburban Services but the woman answering the phone said Finch Services. I asked if this was the John Deere Dealer listed in the yellow pages…she said no, this company bought out that company. It seems that the geniuses at John Deere started selling a cheaper line of lawn tractors at the “Big Box Stores” and ordered the small “Mom and Pop” dealerships to step up sales or leave their program. So I trucked over to Home Depot to get my mower belt. Forget it. One guy at Home Depot didn’t know where in the store they even sold lawn tractors or parts. When I found the section on belts there were six different sizes…none marked for my tractor. I guessed and went home. I guessed wrong by about eight inches.
The hunt continued at the dealership taken over by another dealership and after thirty minutes of staring into the computer and walking back and forth to get a belt I still didn’t have one that matched the size of the broken belt I brought in to compare the new one with. Finally…a match. But there was no picture of how to install the belt. Not at the dealership or in my owners manual. I cursed, I grunted, I crawled around on the cold concrete barn floor, and then I did a rather intelligent thing. I waited for my wife to come home to help me. She has that special kind of mind that could get the job done with me. In five minutes we had the belt on and I was cutting grass.
Have the owners at John Deere lost their minds, just like the Shop keeper who can’t price things correctly? John Deere has taken a product that lasted a generation and made it cheaper and harder to operate because replacing belts is something you expect to do from time to time. I checked the Internet for help with the belt and found many frustrated customers bitching about the lack of help to find the correct belt, and the lack of any access to diagrams showing how to install the belt.
If you are having trouble with your lawn mower belt my wife is available for three hundred dollars an hour, including a minimum of one hour travel time to and fro…parts are extra, but because John Deere is so stupid I bet she will get rich handling the frustrated lawn tractor owners.
When my John Deere wears out we are getting a goat.
- Posted: 21 April 2008
- Comments: 0
- Category: Business failure
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