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It's a since the dawn of time understanding that happy customers are loyal customers. But for some reason so many companies get greedy and ruin that loyalty for

It's a since the dawn of time understanding that happy customers are loyal customers. But for some reason so many companies get greedy and ruin that loyalty for short term profit gains that decimate their long term profit.

coding123 2y ago
New people get hired and want to make their mark.
ncr100 2y ago
Putting imbalance into the system, extracting resources.
paulddraper 2y ago
Interesting. Any case studies in particular come to mind? Where a profitable company increased its profits, via actions that later lost customers and profits? (The historical cases that come to mind for me of are companies that were already in the red, trying to turn it around.)
- Zenzero 2y ago
  Costco could easily triple their cost of their hotdogs and still be cheaper than everyone else. They don't because they know it would be foolishly destructive to their reputation in the long term.
  - katbyte 2y ago
    They also faced pressure during the pandemic to increase their margins like other companies were doing to price gouge. But of course that would do the same to their rep and is not where they make there money. Iirc 80% of profits are from memberships
  - paulddraper 2y ago
    So that's an example of business making the right long-term decision.
- listenallyall 2y ago
  Seems a couple of concert tours were canceled this summer, largely due to failure to sell inflated ticket prices. Popular performers/bands with established fan bases that could almost surely support a modest tour, instead everyone is angry and disappointed and there's no tour at all.
matrix87 2y ago
> But for some reason so many companies get greedy In a way, yes, but the companies aren't sentient. Seems like people in management have become more out of touch and shortsighted over the past 10 years. Almost to the point where deliberately disregarding the customer is a sort of badge of honor, for example the bud light thing
- afavour 2y ago
  I was with you until the Bud Light thing… that’s just culture war hysteria. Nothing about the product or its price has changed. Bud Light just did some Instagram promotion with a transgender influencer. I’m struggling to see that as “deliberately disregarding” their customers.
  - yarg 2y ago
    They attempted to virtue signal to a market with a very low interest in beer, while at the same time pushing away anyone sick of constant virtue signalling. And who's sick of the virtue signalling? Beer drinking straight dudes. It's not just a culture war issue, it's an issue of gross incompetence in marketing and a failure to understand the demographics of their customer base.
    - CapcomGo 2y ago
      It's a culture war thing. People protesting Bud Light didn't even know what they were protesting. They saw Kid Rock shoot some beers and were all-in.
      - listenallyall 2y ago
        Videos of the transgender influencer went extremely viral. Ex-Bud Light customers knew exactly what repelled them.
    - afavour 2y ago
      The term “virtue signal” is the backbone of the argument here and I have to confess I don’t understand. They attempted to sell beer to a market with a historically low interest in beer. I don’t understand why marketing would be virtue signalling. Expanding to new markets is a thing businesses do. And we’re in an era capable of very targeted advertising, the only people who would have organically seen the ad are people who already followed that influencer so I’m still at a loss as to what the original customer base would be losing. Their experience was exactly the same, it’s nothing like the situation outlined in the article. But once it’s become a culture war issue sides must be taken. Maybe they should have anticipated right wing reactionaries capitalising on it. > And who’s sick of virtue signalling? Beer drinking straight dudes. Speak for yourself, man. It is not something that comes up in my life.
hnthrowaway0328 2y ago
They are just running numbers. If raising the cost of coffee by $1 brings more profit, then why not? And they can roll back if it doesn't work. People who are concerned by a $1 raise aren't particularly sticky anyway.
- zug_zug 2y ago
  Did you read the whole article? Because it turns out the manager just starts giving away the coffee for free, so whatever numbers somebody was pulling from the sales system were obviously incorrect. The problem with "running numbers" like so many other metrics is that they are usually run by MBA types who have a weak grasp of math and don't really understand the customers' psychology (often work in corporate offices that are nowhere near the stores).
  - hnthrowaway0328 2y ago
    Yes I read the whole article. I don't see what's wrong here. The revenue didn't match so the manager changed practice. It's still running numbers.
    - CapcomGo 2y ago
      Because this short-sighted revenue focus is what leads to customer loyalty plummeting.
    - ThunderSizzle 2y ago
      Corporate probably doesn't know the manager started giving out free coffee, so the next time they look at numbers, Corporate won't be able to ever see a difference except that they weren't selling cups of coffee anymore
- Zenzero 2y ago
  Not all numbers can be run in isolation. One of the most valuable things a business can build is a sense of community around it. Businesses who attempt to extract each marginal dollar from any goodwill they have built will suffer in the long term.
tpmoney 2y ago
It feels like a fundamental forgetting that at the other end of your business transaction is a human being. I've been telling this story to friends lately. I have a "membership" to a local car wash. As long as I go 2x / month it's worth it, but if I don't I'm wasting money. Usually that means I'm wasting money in the winter months, but overall I tend to make it up in the summers and have been relatively happy with things. In the past year, the car wash was sold to some other owners, possibly a small chain. Price remained the same and service remained roughly the same, so I'd kept the membership. A few months back they randomly sent a text out to all the membership customers announcing the finalization of the ownership change. Up until this point, they'd never texted me before, but ok a change like that might be worth sending an unexpected "marketing text" to everyone. Suddenly every couple of weeks I'm getting new marketing text blasts to come by and make sure my car is clean for the upcoming weekend or some other stupid thing like that. Not to upgrade my membership, and not for any "hey we're running a promotion of 50% off the ceramic coating" or anything similar. Just annoying "it's a weekend, come get your car washed" texts, to a member where you don't even get any upsells when you come in to use your membership in the first place. They make more money if I don't show up and use my membership and they're spamming me without any offers that might even make it worth while. And now I'm annoyed. They could have just not started sending out marketing campaigns to their members. Like I said, they don't have upsell options when you go through on your membership tag (they used to but that stopped with the ownership change). They could have sent a text saying something like "hey, we haven't seen you in a while and we wanted to remind you you're still paying for an active membership, come on by". That would feel personal, like they care (even if they don't) that me not using my membership is a waste of my money. They could even have made it a marketing blast with "as a thanks for sticking with us, we're going to give you a free/discounted ceramic coating" or some other extra on your next wash". But they didn't do that either. So now, instead of me having a story to tell people about this awesome car wash place that really takes care of their customers, I instead have a story of a stupid car wash place that started annoying me for no reason at all. They've also incentivized me to re-examine the membership and other options in the area because of their decision to just start being stupidly annoying. All because probably someone somewhere in the decision chain saw some numbers that said if they blast thousands of texts out, that could turn into some extra hundreds in sales, and didn't even stop to think that some real human lives at the other end of that text and wasn't expecting or wanting that text.
veunes 2y ago
And this phenomenon can be frustrating for both

coding123 2y ago

New people get hired and want to make their mark.

ncr100 2y ago

Putting imbalance into the system, extracting resources.

paulddraper 2y ago

Interesting. Any case studies in particular come to mind? Where a profitable company increased its profits, via actions that later lost customers and profits? (The historical cases that come to mind for me of are companies that were already in the red, trying to turn it around.)

Zenzero 2y ago
Costco could easily triple their cost of their hotdogs and still be cheaper than everyone else. They don't because they know it would be foolishly destructive to their reputation in the long term.
- katbyte 2y ago
  They also faced pressure during the pandemic to increase their margins like other companies were doing to price gouge. But of course that would do the same to their rep and is not where they make there money. Iirc 80% of profits are from memberships
- paulddraper 2y ago
  So that's an example of business making the right long-term decision.
listenallyall 2y ago
Seems a couple of concert tours were canceled this summer, largely due to failure to sell inflated ticket prices. Popular performers/bands with established fan bases that could almost surely support a modest tour, instead everyone is angry and disappointed and there's no tour at all.

matrix87 2y ago

> But for some reason so many companies get greedy In a way, yes, but the companies aren't sentient. Seems like people in management have become more out of touch and shortsighted over the past 10 years. Almost to the point where deliberately disregarding the customer is a sort of badge of honor, for example the bud light thing

afavour 2y ago
I was with you until the Bud Light thing… that’s just culture war hysteria. Nothing about the product or its price has changed. Bud Light just did some Instagram promotion with a transgender influencer. I’m struggling to see that as “deliberately disregarding” their customers.
- yarg 2y ago
  They attempted to virtue signal to a market with a very low interest in beer, while at the same time pushing away anyone sick of constant virtue signalling. And who's sick of the virtue signalling? Beer drinking straight dudes. It's not just a culture war issue, it's an issue of gross incompetence in marketing and a failure to understand the demographics of their customer base.
  - CapcomGo 2y ago
    It's a culture war thing. People protesting Bud Light didn't even know what they were protesting. They saw Kid Rock shoot some beers and were all-in.
    - listenallyall 2y ago
      Videos of the transgender influencer went extremely viral. Ex-Bud Light customers knew exactly what repelled them.
  - afavour 2y ago
    The term “virtue signal” is the backbone of the argument here and I have to confess I don’t understand. They attempted to sell beer to a market with a historically low interest in beer. I don’t understand why marketing would be virtue signalling. Expanding to new markets is a thing businesses do. And we’re in an era capable of very targeted advertising, the only people who would have organically seen the ad are people who already followed that influencer so I’m still at a loss as to what the original customer base would be losing. Their experience was exactly the same, it’s nothing like the situation outlined in the article. But once it’s become a culture war issue sides must be taken. Maybe they should have anticipated right wing reactionaries capitalising on it. > And who’s sick of virtue signalling? Beer drinking straight dudes. Speak for yourself, man. It is not something that comes up in my life.

hnthrowaway0328 2y ago

They are just running numbers. If raising the cost of coffee by $1 brings more profit, then why not? And they can roll back if it doesn't work. People who are concerned by a $1 raise aren't particularly sticky anyway.

zug_zug 2y ago
Did you read the whole article? Because it turns out the manager just starts giving away the coffee for free, so whatever numbers somebody was pulling from the sales system were obviously incorrect. The problem with "running numbers" like so many other metrics is that they are usually run by MBA types who have a weak grasp of math and don't really understand the customers' psychology (often work in corporate offices that are nowhere near the stores).
- hnthrowaway0328 2y ago
  Yes I read the whole article. I don't see what's wrong here. The revenue didn't match so the manager changed practice. It's still running numbers.
  - CapcomGo 2y ago
    Because this short-sighted revenue focus is what leads to customer loyalty plummeting.
  - ThunderSizzle 2y ago
    Corporate probably doesn't know the manager started giving out free coffee, so the next time they look at numbers, Corporate won't be able to ever see a difference except that they weren't selling cups of coffee anymore
Zenzero 2y ago
Not all numbers can be run in isolation. One of the most valuable things a business can build is a sense of community around it. Businesses who attempt to extract each marginal dollar from any goodwill they have built will suffer in the long term.

tpmoney 2y ago

It feels like a fundamental forgetting that at the other end of your business transaction is a human being. I've been telling this story to friends lately. I have a "membership" to a local car wash. As long as I go 2x / month it's worth it, but if I don't I'm wasting money. Usually that means I'm wasting money in the winter months, but overall I tend to make it up in the summers and have been relatively happy with things. In the past year, the car wash was sold to some other owners, possibly a small chain. Price remained the same and service remained roughly the same, so I'd kept the membership. A few months back they randomly sent a text out to all the membership customers announcing the finalization of the ownership change. Up until this point, they'd never texted me before, but ok a change like that might be worth sending an unexpected "marketing text" to everyone. Suddenly every couple of weeks I'm getting new marketing text blasts to come by and make sure my car is clean for the upcoming weekend or some other stupid thing like that. Not to upgrade my membership, and not for any "hey we're running a promotion of 50% off the ceramic coating" or anything similar. Just annoying "it's a weekend, come get your car washed" texts, to a member where you don't even get any upsells when you come in to use your membership in the first place. They make more money if I don't show up and use my membership and they're spamming me without any offers that might even make it worth while. And now I'm annoyed. They could have just not started sending out marketing campaigns to their members. Like I said, they don't have upsell options when you go through on your membership tag (they used to but that stopped with the ownership change). They could have sent a text saying something like "hey, we haven't seen you in a while and we wanted to remind you you're still paying for an active membership, come on by". That would feel personal, like they care (even if they don't) that me not using my membership is a waste of my money. They could even have made it a marketing blast with "as a thanks for sticking with us, we're going to give you a free/discounted ceramic coating" or some other extra on your next wash". But they didn't do that either. So now, instead of me having a story to tell people about this awesome car wash place that really takes care of their customers, I instead have a story of a stupid car wash place that started annoying me for no reason at all. They've also incentivized me to re-examine the membership and other options in the area because of their decision to just start being stupidly annoying. All because probably someone somewhere in the decision chain saw some numbers that said if they blast thousands of texts out, that could turn into some extra hundreds in sales, and didn't even stop to think that some real human lives at the other end of that text and wasn't expecting or wanting that text.

veunes 2y ago

And this phenomenon can be frustrating for both