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    « Enter the Blogosphere | Main | When it Absolutely, Positively, Has to Be Done… »

    April 10, 2006

    The Root of Profit Erosion...

    I have come to the opinion that the single biggest issue stopping reprographers from making more money is deadlines. True, it is a deadline driven business, but the deadlines are often arbitrary or artificial.   I ask owners what their guaranteed deadline is and they say "whenever the customer needs it".  I know one company that offered to do every job within 3 hours expecting to get more business.  It didn't work!!

    Many companies believe they have solved this problem by saying "we no longer accept ASAP as a delivery time".  That's a start, but customers put in a specific time that is often more unrealistic than ASAP.  Why do they do this?  There is nothing stopping them.  There is no penalty. 

    I get frustrated when I drop off my laundry and the lady behind the counter says "when would you like your shirts Mr. Cronin".  I look at the sign behind me which says "Same day service" and I say "I'd like them today please".  Nine times out of ten I don't pick them up that day. Often a week or longer will go by before I'll pick up my clothes.  If she would ask me if I would take a 2% discount to pick them up 2 days later I would usually take that discount.  It isn't much money, but it is something and if I really don't need the shirts right away I would take the discount. Now the cleaner has clothes coming in the door with different deadlines. If she can manage that well she can generate more profits.

    When I ask business owners if they would offer a discount to their customers for slower service the typical response is "we don't want to erode our margins." What if I told you that I have determined that by not having such a program you are already eating into your margins? It is only going to get worse as the speed of business increases.

    The key to being able to offer a discount for longer service or a premium for faster service is to have piercing insight into the operations of your business.  Without having this insight you will always be scared that you will erode your margins, or loose customers.


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