Monday, November 14, 2011

Income vs. Profitability

The comedy club reservations manager was seeing dollar signs. Here was a prospective customer setting up a birthday party for her husband; booking dinner, drinks and a show for dozens of friends and family. It was a windfall.

Then came the warning signs. Had any of this group ever been to a comedy club? No, said the prospect, but she was sure they’d love it. Had they heard of the headline act (a recognizable name, somewhat notorious for his blue-very blue-language)? No, but the family enjoyed all sorts of comedy. Especially, said the prospect, her 93-year-old mother-in-law, who would be in attendance. As would be the family’s pastor.

Turning away a customer is never an easy thing to do. Some businesses would never even consider it. Those businesses, however, don’t understand the difference between income and profitability.

Profitability stems from the customer-service mindset; from opting to help customers, rather than simply selling to them. Helping them means recognizing when what you’re selling isn’t what they should be buying.

The comedy club reservations manager thanked the prospect for her time, and gave her the number of a nice local dinner theater. That’s where the birthday party was held, and by all accounts it was a lovely affair.

Sure, our plucky reservations manager lost out on a considerable chunk of income. But in doing so, she was diligently minding her long-term profitability. More importantly, she was giving her best level of service to a prospective customer, who was after all just looking for a pleasant evening.

Think long term. Say no when you must. And always do the right thing for your customers. In the end, that’s always the right thing for you.