Life Lessons from the Donut & Coffee Guy
Jason Kottke has a terrific post about
a sidewalk stand that increases profits by improving trust.
"Next!" said the coffee & donut man (who
I'll refer to as "Ralph")
from his tiny silver shop-on-wheels, one of many that dot Manhattan on weekday
mornings. I stepped up to the window, ordered a glazed donut (75 cents),
and when he handed it to me, handed a dollar bill back through the window.
Ralph motioned to the pile of change scattered on the counter and hurried
on to the next customer, yelling "Next!" over my shoulder. I put
the bill down and grabbed a quarter from the pile.
I walked a few steps away
and turned around to watch the interaction between this business and its
customers. For five minutes, everyone either threw down exact change or
made their own change without any notice from Ralph; he was just too
busy pouring
coffee or retrieving crullers to pay any attention to the money situation.
Ralph
probably does lose a little bit of change each day to theft & bad
math, but more than makes up for it in other ways. The throughput of
that tiny stand is amazing. For comparison's sake, I staked out two nearby
donut & coffee stands and their time spent per customer was almost
double that of Ralph's stand. So, Ralph's doing roughly twice the business
with the same resources. Let's see Citibank do that.
When an environment of trust
is created, good things start happening. Ralph can serve twice as many
customers. People get their coffee in half the time. Due to this time
savings, people
become regulars. Regulars provide Ralph's business with stability, a good
reputation, and with customers who have an interest in making correct change
(to keep the line moving and keep Ralph in business). Lots of customers
who make correct change increase Ralph's profit margin. Etc. Etc.
And
what did Ralph have to pay for all this? A bit of change here and there.
(thanks,
Roland!)
Ralph the Coffee & Donut Man has done two things to improve
his business. First, he's put himself at risk rather than the customer (caveat
venditor). Whether
it's a hard-headed ROI calculation or a social statement, he's come out way
ahead. Second, he's changed the character of his relationship with his customers.
Instead of insisting on a simultaneous exchange of coffee and cruller for
cash, he delivers the goods and ignores the mechanics of the transaction.
He's depending on reliable protocols for the money side of the deal. To his
"business logic" (as the consultants call it), the money's an afterthought.
Many of us, like Roland, see the similarity between the Ralph protocol
and the Xpertweb protocol. Once the order's delivered, the vendor's
free to start on another revenue cycle. Upon delivery, the customer is
trusted to pay according to his satisfaction.
In both environments, the delivery and the customer's response
are visible to bystanders, which probably reinforces compliance, but the
urge to treat fair work with fair payment is probably genetic, since animals
do
the
same
thing.
Trust. You can take it to the bank.
11:13:04 PM 
|
