This is a short post with a simple message: recruit, induct, train and support people who will engage with your customers and take pleasure in adding value to their experience, and you will have a more profitable business!
I’ve previously highlighted the report by workplace charity People 1st which contained the eye-popping fact that a 1% increase in productivity could drive an extra £1.43 billion revenue to the hospitality industry.
This is such an enormous opportunity that I feel justified in repeating (and elaborating on) this anecdote: I recently had a meeting in a newly-built hotel here in Kent. The hotel is contemporary in style and has been set up with an obvious focus on the business market. My colleague arrived before me and was informed that the cafe bar was not open yet, but that free coffee was available in reception.
During the course of the two-hour meeting, we each had two cups of free coffee, whilst seated in the cafe bar. The barista busied himself behind the bar – yet at no point did he engage, either with us, or with the six other people who were also there. Towards the end of the meeting we remarked that, had he offered us ‘proper’ coffee and a muffin or pastry, he would have made a sale of at least £6 per head. Bearing in mind that he could have almost certainly sold us a second coffee during that two hours, that’s an additional £2.50 per head – a total spend per head of £8.50!
Had the barista approached everyone in the bar with the same proposition, it’s reasonable to think that he could have achieved sales of at least £50! So, if we assume a gross profit of around 75%, the barista could have earned the hotel around £37.50 – compared to the estimated cost of employing him (for the first three hours of the day) of £21.60*!
So: the hotel could have made a profit of £15.90 – instead it made a loss of £21.60. Just imagine how many informal meetings take place across the UK every day, and you start to see just one way in which that 1% productivity gain could be achieved!
In a future post I will reflect on how the Lifetime Value of a Customer makes the opportunity even more dramatic. For now though, I would recommend that any customer-facing business starts to think about all the ways in which this simple principle – this latent profit potential if you like – could be applied, to the benefit of the team, the customer and the business.
If you’d like support to design and deliver a more profitable Customer Experience click here.
* The above figures assume the barista’s hourly rate to be £7.20. On-costs not included, but you get the point.