We've all heard the saying, "Penny wise and pound foolish."
"For business owners, it means focusing on saving money to the point of turning customers away. There has to be a balance between money saving practices and providing service," Dr. Lyle Sussman, author, consultant, professor of management at the University of Louisville and friend of this column points out.
As you will see, cheapskate business owners send a message to their customers, landlords and suppliers which can have significant consequences.
Too cheap to replace fuel filling nozzles
For anyone living in a very hot or cold climate, the idea of having to hold the trigger on a gas pump's fuel nozzle is probably the last thing you’d want. Virtually all gas stations use fill nozzles which have a locking trigger latch. When the tank is full, fueling stops.
While we have been told to always turn off the engine — and in some states it is illegal to let the car idle while refueling — reality is that many drivers keep the motor running, start pumping and then jump in their air-conditioned or heated car.
Come upon a gas station that forces you to stand outside, squeezing the nozzle trigger, especially our aging population with weakened hand and wrist strength, what are the chances of returning to the same inconvenient place?
And just why would a gas station owner refuse to equip pumps with customer-friendly fill nozzles?
"We get many complaints that our gas station is the only one they have ever seen without a locking fuel nozzle," owner's son "Lee's" email stated. "New, locking nozzles cost less than $60 each, we only have 12 pumps, and it is a deductible expense. But dad refuses. We are losing business. Our pumps are old and slow as well. People rarely come back.
"We sell a national brand of gasoline and the supplier has told us repeatedly to change the nozzles or they will cut us off. Dad doesn’t care and said that we will just switch brands. Can they do this? And, oh, I almost forgot, we charge more for gasoline than just about anyone in town! What do you recommend?"
Flimsy napkins and tables that only seat four
"My parents are operating a restaurant located in the same spot as another which failed. They just moved right in, keeping most of the decorations, and the tables," Jenny stated.
"We hand out the cheapest, flimsy, worthless napkins. It is an insult to our customers who are constantly asking 'May we please have more napkins!' But a critical problem is that each table seats four. There are no small tables for two, so we have table after table with only two people, while a line is forming, people waiting to be seated, and many just walk away.
"Where my family comes from it is common to share a table with strangers, not the food, as space is limited. Napkins, if any, could be a roll of toilet paper."
Jenny explained that she repeatedly urged her parents to replace the tables with several smaller ones seating two which could be placed together when couples arrived, but her father refused telling her "That costs money."
"You would think that, because their daughter has a business degree, they would listen to me! Mom is weak, dad is so cheap, and this is turning away customers, spreading the word that you might have to wait for a very long time to be seated, so we are slowly going out of business!" she said, tearfully.
"The landlord told my parents, 'In the United States we do not share tables with strangers and you have lived here long enough to know this! Using junk napkins saves you pennies and tells customers they are not important! Your first late rent payment will be the last. Do you understand me?”
"Mr. Beaver, what do you recommend?"
Advice from Dr. Sussman
“Just think of Walmart,” Dr. Sussman began, “where Sam Walton paid people to stand at the front door, greeting customers. They return to Walmart because of low prices, and because they are made to feel welcome by that greeter. It is the exact opposite of what the gas station and restaurant are doing.
"For the gas station, yes, a gasoline refiner not wanting its brand associated with a retailer who is so inconsiderate of customers could stop deliveries. The solution is obvious – replace the fuel nozzles.
"As to the restaurant, the landlord clearly wants them to succeed, so if Jenny has the money, she should buy tables and have them delivered when the restaurant is closed, and toss the junk napkins. It’s what a loving daughter will do, if possible."