Never. Ever. Let them walk away. Without a smile on their face. Here's why.
Last night I went out to dinner with my family and I’d like to tell you about my experience. No real need for granular details here, but at the root of my issue was my meal. I ordered what’s known in Israel as a “schwarma” sandwich for $16. By the way, that link goes to a photo of a schawarma sandwich, but that is not the place I’m talking about in this blog post.
I took about 4 bites of my meal and I was done. But I didn’t say a word. Three different people at my table each tried the schawarma too. And when they were done tasting it, I asked them each what they thought. Each of them said the same thing I was thinking. It was dried out and tasted like cardboard.
I rarely send food back at a restaurant because I think it puts the server in an uncomfortable position. However, after our meal, I discreetly approached the restaurant owner and politely told him that I didn’t think the schawarma was up to his high standards. His words back to me were that schawarmas are “always dry” and that’s why we give you the sauce on the side. Here’s what he didn’t say or ask:
Is there anything else I can get you? Are you still hungry?
Please allow me to take that off the bill for you!
How can we get better?
I’m in the middle of reading Atlas Shrugged and feel more strongly than ever that the restaurant owner has every right to handle the situation however he wants. He owed me absolutely nothing. I ordered a meal and he delivered it.
It’s also my right to never visit his restaurant again, right?
This blog post discusses something each of us has experienced hundreds of times in our purchasing lives. But the angle I wish to take here relates to quick math and long term ROI. We spent $100 on dinner last night and I think it’s safe to assume that we’d spend the same $100 each time we’d visit that restaurant. Let’s assume that his margins are 100%, so last night the restaurateur earned $50 in profit.
Conservatively speaking, now let’s assume that I’d dine at his restaurant twice a year. Finally, let’s assume I live in Highland Park for 10 years. Now we have all the numbers we need to determine an LTV (LifeTime Value) for me – his customer:
Profit per visit = $50
Visits per year = 2
Number of Years over customer lifetime = 10
Quick math determines that I represent a $1,000 asset for this particular restaurant. And that’s the number that each of us in business needs to calculate for each of our valued customers. This is the #1 most critical number any mortgage professional should know.
Taking the LTV concept one step further: what happens if I leave the restaurant with a big fat smile on my face? Do I visit the restaurant 4 times a year instead of 2? Do I order that extra bottle of wine next time and spend $150 per visit instead of $100?
And here’s the biggest variable of them all – one that “by rule” does not contribute to LTV, but philosophically and realistically is the biggest game changer of them all…
What happens if I turn on just one of my friends or family to this restaurant – and they become a customer too? Doesn’t my LTV instantly double from $1,000 to $2,000? And when we get to this point in our business, we aren’t using “addition” anymore. We start using the good old “multiplication sign”. The same multiplication sign that allowed Facebook to grow to 600 million members in less time than it took the average consumer to forget how to spell “My Space”.
The customer experience matters every single time for all of us. Car washes. Mortgage lenders. Restaurants.
We all should think in terms of LTV – 100% of the time. I am planning on going back to that restaurant next week and pulling up my laptop and sharing this article with the restaurant owner. He may throw me out – I don’t know. But I really want to help him get better – and I want to help you get better too. If you think you’d like to start using the multiplication sign in your LTV numbers, let’s talk!