Bad profits: blowing £7,000 every year for the sake of £25
We all love a profit, but this week is all about bad profits. Let me explain…
Ocado delivered our food shop last week; Farooq arrived in his Lemon van bang on time, with zero items missing, and carefully placed the bags in the entrance hall. After he left, Jacki picked up one of the carriers and a family-sized jar of tomato sauce fell through the carrier bag and smashed all over the kitchen floor. Shattered glass and red sauce everywhere, it was like something from a horror film.
Post mop-up, Jacki emailed Ocado with the main aim to feedback what had happened so as to avoid in the future – especially as it was a laborious clear up job which would’ve been challenging if the kids had been around, or we’d been less mobile.
Ocado came back that same day, apologising that they “didn’t get it right” and thanking us for the feedback which they will review with the team. They had also, without Jacki asking, already processed a refund for said jar of sauce, and hoped that this hadn’t affected our experience with them.
I was impressed. Especially as we’d only switched to Ocado because of the issues we’d had with Sainsbury’s.
You see, we’d merrily been using Sainsbury’s online ordering for six years but had a run of deliveries that included ridiculous substitutions (ice cream containing actual bubble gum instead of kids rocket ice lollies and gluten free rolls instead of gluten free pasta) – as well as meat-based products that would go off in twelve hours’ time (not ideal for the weekly shop).
Giving them the benefit of the doubt, and thinking it could perhaps be a training issue, we emailed Sainsbury’s customer service account (as per their procedure) to give the feedback. But we never got a reply.
It happened again and again, and by this time Mrs N was getting very annoyed. So, we took to Facebook and not surprisingly got a response straight away. It was extremely negative, listing lots of excuses and implying that we were wasting food by not understanding the difference between ‘use by’ and ‘sell by’ dates.
Despite us spending on average £7,000 per year with Sainsbury’s, the chain didn’t see it as their issue nor their place to apologise, let alone offer any compensation for a few products we had to bin.
So, for the sake of around £25, they blew an easy, recurring £7,000 per year. Plus, a lot of credibility across our Facebook network as friends and family were chipping in with comments on how they’d experienced the same and switched to Ocado.
This is what we call bad profits; profits earned at the expense of a customer relationship.
Bad profits will stunt a company’s growth by creating detractors whose dissatisfaction tarnishes its reputation.
Bad profits can also demoralise employees and leave businesses vulnerable to the competition.
This week, I want you to think about any previous experience you may have had with customers or delivery, or any gaps in your customer journey that could turn bad profits into good profits.
It may come down to some staff training, or revising your policies, but it will make the difference between you keeping loyal promoting customers, rather than dissatisfied detractors.
PS in case you were wondering, we had our spaghetti Bolognese the following week after that spillage!