Wednesday, January 26, 2011

Customer Economics

Had a pretty "utilitarian" chat with the boys today... I told about my visit to the optometrist yesterday. I am trying out some contact lenses and wasn't happy with the pair I had. Asked the optometrist if I could try a different brand. She suggested that I first tray a different cleaning solution with my existing contacts. I told her that she should give me both the new cleaning solution AND a new pair of contacts. Why? The contact sample don't cost much (if anything) yet her time (and mine) are pretty valuable. Why risk having to schedule a follow up visit in a few days? She agreed and gave them to me... My point to the boys: we sometimes save a little bit of money but then end up spending precious (more valuable) time as a result. Be it on ourselves or our customers.

This led us to a brief conversation about good customers vs. bad customers. The contact lens trial has a fixed cost and an unlimited number of visits and lenses that I can try to find the right ones. I'll probably end up costing money to the optometrist as I want to find the best possible lenses and I am willing to try different brands and types. Other customers probably give up after the first pair - or find some that are good enough for them. Those are great customers. Sometimes you need to factor this into the price because you can't afford the "bad" customers. Other times you are better off taking your losses with the bad customers as a trade off for more good customers. Sort of like an "all you can eat" buffet. Of course, you can try some middle ground, e.g., "one lobster per customer & no eating the sushi without the rice".

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