BUSINESS
Combatting inflation
Let your customer experience, not price, differentiate you by Trip Jobe, CEO, Rand Inc.
The customer experience is the quickest and easiest way to help set yourself apart in any market, but especially one with commodity tendencies. We all know that you can get coffee at a donut shop, gas station, or Quick Service Restaurant (QSR) for far less than your $4-6 Starbucks cup. While some will claim the coffee itself is far better, what really sets Starbucks apart is its customer experience. Everything about the brand, the location, and your beginning-to-end experience make you feel a part of a community. This creates loyal advocates who will find other ways to save $25 a week when budgets get tight.
Price inflation has been one of the most commonly discussed topics in 2022. We routinely get questions about trying to manage pricing in commodity markets in this environment.
Too often we see business owners who feel they must hold pricing even as costs rise because someone else has the same service or product. This has become increasingly true in the green industry. This fallacy can cause serious harm to your business and takes your focus away from more important issues at hand.
If not pricing, then what?
The restaurant industry has a lot of parallels to the green industry and has also dealt with this challenge, some far better than others. Similar to lawn maintenance, lawn chemicals, landscape design, and contracting services, the restaurant market is segmented from narrow products (beverages, breakfast) to narrow service experience (quick serve or take out only) to restaurants with a broad range of products and services. Over the last three years, we have seen some restaurants excel while others languish, often in the same product or service category. What creates that difference, and how can you learn from it?
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The Chick-fil-A difference
Throughout the pandemic, CFA widened the gap with its competitors. While many fast food and QSRs struggled with service and keeping employees, CFA’s model kept stores well-staffed and went to great lengths to upgrade their technology quickly to provide more and faster ordering options to handle the increased demand. Over the past six months, they’ve had a few price increases as poultry prices have risen and surely wages have gone up. It has not seemed to slow down the demand or the positive attitude their employees exude – “My pleasure!” You might be wondering how this will relate to your lawn maintenance customers or your tree/lawn fertilization clients. Surely customers may have options with businesses that don’t raise prices or cut some corners. You may also think your market is different from coffee and chicken sandwiches. That’s where I’ll disagree and could point to hundreds of brands that have created loyalty and brand advocates across many markets. When you develop a subscription plan with clients and provide a service, their biggest concerns are the quality and how you treat them. When they agreed to your service, they accepted your price and value. We business owners often forget that there is another cost out there besides our competitors – switching costs.
