$5 for a terrible business decision

If you haven’t heard or read the story yet, there is a store in Australia that has decided to charge $5 for its customers to enter its store and peruse its showroom. The management says it has taken this step to prevent people from simply coming into its store and leave without purchasing something. The $5 will be discounted from once a purchase is made. In a notice displayed at the front of the store, that you can read HERE, it claims that it has the same products that other stores carry and some other unique ones. All the customer has to do is pay $5 to enter the store to come to this realization.

Naturally this has caused some very harsh criticism and backlash. Why? Because it is the most asinine business decision ever made.

If the store wasn’t already in a free-fall, which it sounds like it was, judging by this ridiculous decision, its future as a business is finished. Even if the store retracts the $5 in-store “browsing fee”, the attitude towards potential customers is loud and clear: it’s us against you.

The most interesting side of this entire story are the comments that internet readers post. Many agree that this is an excellent strategy to put yourself out of business. But there is an interesting minority that thinks that this is actually a good idea and that many brick and mortar stores need to do this to combat the online marketplace. Thank goodness that they are the minority, because they are clearly missing the point of being in business in the first place.

Now, I don’t know too much about this store. From what I have read it is called Celiac and sells gluten-free products. By its actions, it is clearly placing the blame on its failure to convert prospects into sales on its customers rather than the business itself to create meaningful value. It’s also placing barriers to any potential customers ever having any desire to form a meaningful relationship with the store. “Anybody want to buy my jalopy? If you give me $5 I can let you see just what a piece of junk it is.” That may be the worst sales pitch ever.

Of course the purpose of a business is to make money and create a livelihood for all those invested. But what this store and so many other stores with the similar attitudes will find is that customer loyalty is worth so much more than a point of sale purchase. Don’t believe me? Just ask Apple, Google, Starbucks, McDonald’s, Toyota, Coca Cola, Pepsi and a million other companies that have managed to be successful for more than a year.

Companies that view their potential customers as unruly freeloaders will give the impression, however subtle, that “all they want is my money.” You think that’s a winning strategy? Ask the American banking industry how that worked out a couple years ago.

A successful business has an open door and welcome mat for its customers, not a brick wall with a cover charge. The sooner businesses with the attitude that are financial targets instead of people that they can help come to this realization, the sooner they can find themselves on the path to long term success.

We are all in the business of customer service; otherwise we will not find ourselves in business for long.

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