Foreword Online

Ideas, information and industry news for collegiate retailers

When Balancing Budgets, Keep the Customer First

Posted by Dean Asher on 6/25/15 10:48 AM
Topics: college store customer service, textbook affordability

In an effort to keep costs down, Olive Garden is cutting back on carpet cleaning. Analysts found that at the rate they were over-cleaning, they were spending double what they had to and were actually causing damage to their stores' carpeting. It's a frugal change, but Judy Mottl at Retail Customer Experience warns to keep customers at the forefront when making similar choices. Read her full post here.

The restaurant company is moving ahead on a new financial strategy apparently, but the strategy itself isn’t new as zero-based budgeting is an approach that’s been adopted for eons, both by business and by the American household. It’s likely more popular since the recession years but it is a standard financial operating mechanism.

The thing is, while you save money when you cut back on rug cleaning, you also run a risk: turning off your customers. Who wants to eat at a place where a rug is stained and clearly not maintained? It’s like the gym that doesn’t stock paper towels in its lavatories or disinfectant soap in the gym area. Those are customer-facing elements in the shopping and user experience. They’re not sexy or fun but they can make a customer think twice about returning for a meal or re-upping that gym membership because there are plenty of other places to eat and workout.

According to the Bloomberg report the restaurant company’s new management team has already pared $100 million a year from labor cost and operation expenses. That’s a good thing, but going forward the focus should be first and foremost on cutting costs on things that don’t directly impact a consumer or client or user. For example, as the Bloomberg report notes, other companies are reducing office supplies and printer use, to save on paper, ink cartridges, etc. Obviously HP and other printer makers won’t be thrilled to hear that, but hopefully these kinds of cost reductions are temporary fixes. Maybe those companies will now investigate updating and upgrading printer fleets to more efficient models which will be good news for printer makers.

JPMorgan has decided to slice its employee voice mail service, which will reap them a whopping $3.2 million in savings. The decision, announced at a recent industry conference, came about as the consumer banking company realize it was hardly being used.

"We are all carrying something in our pockets that's going to get texts or email or a phone call to you," said Gordon Smith, CEO of JPMorgan's consumer and community banking, according to a CNBC report.

The point is, reducing printing activity and eliminating voice mail isn’t going to negatively impact the customer experience. And that’s the key to unlocking good decision making when it comes to saving money while keeping customers happy and revenue on a growth path.


Article comments

Subscribe for updates

Share your experience

Contact our editorial team to set up an interview or to contribute a guest post.

Most popular posts