Raise your profit by raising prices
I have to thank Dennis McCrory for his
article last May titled, “Is Starbucks Stealing Your
Business?” It reminded me of a lesson I learned years ago
that still applies today.
I believe it was in the mid 1960s when I
was introduced to and made aware of this phenomenon. It seems
in every era of our business careers there is a segment of the
buying public that wants the “best,” it matters not
whether it’s affordable, if it’s anywhere within
reach
of a budget, and the desire is there,
“It will be purchased” I’m not sure if
it’s to satisfy an ego or just a pleasurable attainment,
but I am amazed at how easily the human spirit can succumb to a
few harmless luxuries.
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At the time, we were locked in at about
$2.25 a garment, when I decided to raise our prices a mere 25
cents.
We received not a single complaint, and
the one or two inquiries were easily ex-plained away as,
“Oh, that was last year’s price.”
The whole episode gave rise to a major
business strategy that strangely enough increased our profit,
and our prestige and even brought a new loyalty from our
steady, preferred customers.
We introduced our new deluxe
“Orchid Service.”
It was double our standard price and cost
us about 10 percent more in fancy packaging, such as tissue,
coat retainers, hanky tops on jackets and a thick, one-mill
plastic bag, plus a little note about “how careful we are
about your special garments.” The final inspection was a
little more thorough with lavish use of a lint roller plus a
careful eye on finishing. The customers loved it!
Did everyone accept and use the new
“Orchid Service?” Of course not! It wasn’t
meant to be for every customer and every garment. But a
surprising number of customers praised the effort and we even
saw some new faces that came in based on recommendations.
Most of our steady customers were pleased
that we offered such a service. They didn’t have to look
elsewhere to have their very preferred expensive clothes
specially serviced.
It seems no matter what the economic
times (even back in the 1960s), everyone wants and likes,
special service. Whether or not they can afford it, the desire
is there.
I see it even more today, with tanning
salons, manicure and pedicure outlets, and a proliferating
number of hair salons in areas where once women preferred to do
their hair at home.
Male or female, people prefer to have
their cars washed and waxed, their homes serviced and their
children tutored by specialists. There is something to be said
for the attraction of professionalism. I also have noticed that
people no longer read menus from right to left in fancy
restaurants regardless of their once austere backgrounds.
We were blessed with a 20-foot ceiling in
our call office and were fortunate to be able to hang the
finished gowns from the ceiling with a spotlight. Of course,
the ladies had a chance to observe the personal fashion show
and were pleased with the display.
Business increased and, of course, the
profit picture did, too, without an increase in volume. All it
took was a suggestion when a fancy expensive garment came over
the counter. “Would you prefer this process with our new
deluxe Orchid Service?”
All we had to do was offer the customer
this new service. It reminded me of one of Chicago’s best
merchandise experts, Marshall Field, who coined the phase,
“Give the lady what she wants!”
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