Hugh Hollowell

I saw these on Critter today at the Tweet-up at the Mellow Mushroom on Glenwood.  Are they not frickin’ awesome?

As someone who has some personal knowledge of the subject, this is the truest damn thing I have read this year.

If you buy something from me one time for $10, that represents $10 of value to me. And that is where most business owners stop. However, if you come in my shop 4 times a month and do so for a year, that is $480 you represent to me.

Once you look at it like this, several things become immediately apparent.

• It is to my advantage to try to get you to come back because I only had to market to get you in the store once. If it costs me, on average, $1 of advertising to get a new customer, that means if you come in one time, my marketing costs are 10%. However, if you become a repeat customer for a year, that means my marketing costs are less than a half a percent (this, in case you did not know, is a good thing).

• If I know I have an average net profit of 10%, that means I can spend any amount up to $48 in a given year to make you ecstatic and still not lose any money.

• If I have a choice between marketing to get new customers and marketing to my existing customers, the later has a higher payoff by many orders of magnitude.

In order for any of this to work, you must have a firm grasp of the numbers in your business. If you don’t, stop everything right this minute and don’t do anything else until you understand where every dollar is going.

Yesterday, I wrote about my frustration that I could not find a small business that would sell me breakfast and let me pay with my debit card. I want to riff on that for a moment, if you don’t mind.

If you run a business, you have the right to decide up front how you want to do business. For many of us, the ability to make those sort of decisions was why we went into business in the first place. However, if you decide that you only want to do business with one eyed midgets that speak Rumanian, do not be upset when the chain store that wants to do business with everyone takes all your business including the Rumanian midgets.

There are hundreds of reasons for someone to NOT do business with you or your firm. I do not understand why you would want to add another one. In any shop I ever ran, I was more than happy to take any form of payment you wanted to give me, as long as I had a reasonable hope of being able to deposit it. My thinking was that it is always easier to sell to someone the second time than it is the first time.

You see, the business owner was thinking short term: He was looking at losing about 50 cents off a $7 transaction. However, that is false economy: Over the course of a year, I spend about $900 on breakfast in greasy spoon diners, and now none of that will be spent in any of those three places. He saved 50 cents, but lost $900.

I love this quote from the movie Signs.

People break down into two groups when the experience something lucky. Group number one sees it as more than luck, more than coincidence. They see it as a sign, evidence, that there is someone up there, watching out for them. Group number two sees it as just pure luck. Just a happy turn of chance. I’m sure the people in Group number two are looking at those fourteen lights in a very suspicious way. For them, the situation isn’t fifty-fifty. Could be bad, could be good. But deep down, they feel that whatever happens, they’re on their own. And that fills them with fear. Yeah, there are those people. But there’s a whole lot of people in the Group number one. When they see those fourteen lights, they’re looking at a miracle. And deep down, they feel that whatever’s going to happen, there will be someone there to help them. And that fills them with hope. See what you have to ask yourself is what kind of person are you? Are you the kind that sees signs, sees miracles? Or do you believe that people just get lucky? Or, look at the question this way: Is it possible that there are no coincidences?

Which group do you fall in?

I like breakfast. A Lot.

About twice a week, I will throw the latest book I am reading into the messenger bag and head off to a greasy spoon, Mom and Pop diner to get some scrambled eggs, sausage, grits and toast.

This morning was such a morning. However, because my regular place was closed due to a death in the family and I do not carry cash, I was unable to buy breakfast. I drove to three different places, any of which would have been fine with me, but because I was not willing to do business their way (pay cash), they did not get my business. Instead, in frustration (and hunger), I ended up going to McDonalds, where I spent much less than I was planning on spending, got worse food than I wanted, yet they let me do business with them my way.

I know all the justifications for not accepting plastic:

• There is a 3% fee
• There is a .25 cent charge per transaction
• Increased admin time
• 2-3 day delay in getting the funds

You know what? I don’t care. Every reason you could possibly have for not accepting credit cards has to do with you, the business owner. None of them affect me, the customer, at all.

My new home on the internet is hughlh.com. You can read my blog, contact me or whatever. There is also a comprehensive list of the various social networking sites I am on, such as FaceBook, MySpace and so on.

Since I write for a number of blogs, you can read a collected feed of them all in one place at my ‘nerve center’.

If you make it over that way, make sure you stop in and say hi, would you?