Photo by Daryn Bartlett on Unsplash

How Two Words Can Make Your Business A Success.

Maybe its not that complicated?

R.A.Benson
Jul 10, 2017 · 4 min read

When you listen to the recent strategies on how to be a mega success, you will likely hear some of the following advice:

  • Find a need and fill it.
  • Solve a problem.
  • Find your niche and then provide the best content (or some variation of that mantra.)
  • Get 1000 followers and then you will have a business.
  • Be the very best at just one thing. Or really good at two things.
  • Be first to market. (“I want to be the first Poke restaurant….oops too late!”)

I am not disparaging any of these ideas, especially when they come from people who are successful. (Though I am a little suspicious when their “success” is from selling a program on how to be a “success”, but maybe that is the cynic in me.)

But perhaps it is simpler. Maybe in business and in life, to be a success you need to create a service or product that creates Inelastic Value.

My first real dip into this idea came from the my first job as a waiter at The original Claim Jumper Restaurant in Los Alamitos, California. Claim Jumper served homemade, delicious food from scratch in gigantic portions at a really fair price. Every table had to take food home, and we were grand-central station busy.

People would think that the portions were the only value driver, but they were wrong.

When you went to put your name in for a table, they would give you a gold rush themed fictitious name on a card like “Yosemite Sam,” and that is what they would call when your table was ready (this was pre-pager). They had popcorn in the lobby and a old time strength testing machine that cost a dime. (remember coins?)There were authentic western artifacts everywhere and river rock accents. It was like you stepped into a mini theme park.

It was awesome. It was the perfect family restaurant.

Not too mention the restaurant was incredibly clean, the staff was well trained and well paid. A manager would touch every table.
All these elements combined to create incredible value. All the way down to the free root beer candies that came with your bill.

It wasn’t cheap, either. Probably a $25 per person average at the time (mid 1980's). But you almost never heard any guest grumbling about the price and they were almost always smiling as they carted a to-go bag in one hand and a toothpick in the other.

Inelastic Value = How much more your clients would pay for your service/product (and still be happy)?

In 2016 the research firm Piper Jaffray, did a study of 1300 Netflix subscribers in nine countries. They found that 63 percent of current subscribers wouldn’t cancel their service if Netflix raised its prices. 63 percent. In other words:

Netflix subscribers feel like they are getting so much value that they would pay more to keep it and their subscriber/client base is growing steadily.

Let that sink in.

Their subscriber/client base (revenues) are increasing by 25% per year.
Their churn rate is shockingly low.
And they can raise their prices, and not lose clients.

Their Inelastic Value is so high, the quality or benefit of the service is so elevated and meaningful, that it always feels like a bargain. And that makes good things occur.

So, how can you make this happen with your business? Here are some tips:

  1. Sweat the details.
    Make sure that every element of your clients experience is thought out and as friction-less as possible. Make access and ordering your product easy, guest service friendly and transparent. Analyze every point of the guest experience from beginning to end. (If you are a restaurant, you would start with the parking lot and end with the guest walking out the door.) Do all the elements add up to a great value?
  2. Do more than necessary or expected.
    Look for opportunities to do a little more. It may be as simple as offering to personally help a guest with carrying their take our order to their car. Remembering their name or last order. Nicer packaging. Or a hand-written thank you note. If you give them only what they expect, you should expect to lose guests to someone else.
  3. Think “Long Horizon”
    All your actions should be pointed at how it will affect your guests/clients LONG TERM. Hire people who are interesting, curious and enjoy other people, and then “over-train” them. Make sure the busboy knows the menu, your history, and can answer the questions a guest might ask. Cross train like crazy, if someone drops the ball, some other team member can pick it right up. Sacrifice a little bit of cost now for a long-lasting bullet proof relationship with your client later.

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