Balancing Cost And Customer Satisfaction

Dwight Schrute gave one of the best lessons I've ever seen re: how to defeat a cheaper competitor. Here's what he did + 2 examples I've seen of this working in the B2B wild. In Season 3, Episode 12 of The Office, Jim and Dwight meet with a prospect who wants to buy from their big box competitor, because their prices are lower. At first, Jim does what what most of us do in that situation. He rambles on about discounts and custom work they can do in an attempt to increase the perceived value and be more competitive on price. Meanwhile, Dwight uses the prospect's phone to call the customer service line of their big box competitor. Jim asks - "How important is customer service to you?" Prospect: "Very important." At that moment, the competitor's automated customer service line says, "Your call is very important to us...please hold...". Dwight hangs up and calls their own customer service line. Kelly picks up immediately. Here's why I love this scene. We don't win competitive deals when we try to compete on areas where our competitors clearly outperform us. We win competitive deals when we reframe the customer's decision-making criteria in our favor. Jim and Dwight can't compete with a big box retailer's pricing, without destroying their margin. So, they reframe the prospect's decision-making criteria from price to service. But, best of all, they don't TELL the prospect they're "better" at service. If they had - it wouldn't have worked. They SHOW him. They give the prospect the information he needs to realize it for himself. Now, while most of us can't copy exactly what Jim and Dwight did, we can absolutely make this work in real-life. Step 1 - Identify what makes your solution different (not better). Step 2 - Identify how NOT having that difference impacts your customer's business. Step 3 - Give them a way to do the math on their own to see the implications of it. Examples I've seen in real-life: 1 - Small manufacturer vs. bigger competitor. Bigger meant more layers of approval for change orders. Waiting for change orders = more downtime. Downtime carried a significant cost. Helped the buyer do the math on cost of avoidable downtime. 2- Diagnostic healthcare product that gave more accurate patient results, but was slower. Kept losing b/c buyers valued faster results. Helped the buyer size the costs/implications of inaccurate patient results. TLDR - Reframe the customer's decision criteria in your favor. Help them see the implications of the difference, don't just tell them the difference.

Does charging for returns damage sales? It's a big question. And one that many retailers are "afraid" to test, fearing a loss of customers and denting sales. There are many examples where retailers have faced an initial backlash from customers when returns fees have been introduced. But over the last couple of years, it has certainly become more commonplace throughout the industry as retailers attempt to protect margins and discourage excessive returns behaviours. The answer to this question is far from simple, with so many factors to consider. Customer demographics and expectations can significantly impact how return fees are perceived - younger shoppers may have different tolerance levels than older demographics. The price point and product also matters. For example, luxury retailers face different considerations than fast fashion or everyday essentials. Brand positioning plays a crucial role. Brands built on exceptional customer service may face stronger backlash than value-oriented retailers. Implementation approach is equally important. Offering free returns with loyalty programs or minimum purchase thresholds can soften the impact. But what's super interesting with our research with ZigZag Global is that the largest returners (e.g. serial and slow returners who account for a quarter of consumers but generate half of all returns) are also the most willing to pay for returns, including paying a little bit upfront at the time of online purchase to guarantee cheaper or free returns later. Effectively targeting these consumers through a nuanced understanding of specific triggers, barriers and thresholds is essential to manage returns options in a smarter, more sustainable way. As margins come under further pressure through rising operating costs, and competition intensifies, my view is that those retailers who will win will be those who can implement personalised returns policies based on first party data - testing willingness to pay for certain segments to help protect margins while simultaneously discouraging others to over-order. Shifting from a one size fits all strategy to dynamic, data-driven approach can transform pure margin erosion into a tool for customer loyalty and sustainable profitability. Download the full report below: https://lnkd.in/e3K3dQWx

A DTC fashion brand founder reached out to me, frustrated. "We’re spending lakhs on ads, but every new customer is costing us ₹1,200. How do we scale without burning money?" I checked their numbers: 📉 Customer Acquisition Cost (CAC): ₹1,200 📉 Repeat Purchase Rate: 12% (way below industry standards) 📉 Average Order Value (AOV): ₹1,800 (low margin for ad-heavy growth) 📉 ROAS: 2.1X (barely breaking even) They were stuck in the classic DTC trap: 🚨 Scaling cold traffic with direct sales ads 🚨 Over-relying on discounts to convert 🚨 No focus on repeat purchases or brand loyalty We flipped the strategy in 3 steps: 🔹 Built a Content-First Funnel → Instead of selling immediately, we warmed up cold traffic with: • UGC & influencer testimonials (trust-building) • "How to style" content (engagement) • Brand storytelling ads (higher click-through rates) 🔹 Reworked Retargeting → Instead of spamming discounts, we created: • Social proof ads (before & after styling looks) • Exclusive limited-edition drops for engaged audiences • Cart abandonment sequences with urgency-driven copy 🔹 Fixed Retention & LTV → Profits come from repeat customers, so we: • Introduced personalized post-purchase offers • Built a VIP program for early access & loyalty perks • Increased email + WhatsApp engagement (repeat buyers grew 2.3X) 💡 60 days later, here’s what changed: ✅ CAC dropped from ₹1,200 → ₹740 ✅ Repeat purchase rate jumped from 12% → 28% ✅ AOV increased from ₹1,800 → ₹2,300 ✅ Monthly revenue scaled from ₹15L → ₹24L 🚀 Scaling isn’t about cheaper ads. It’s about smarter customer journeys. If you’re struggling with CAC, ask yourself: ⚡ Are you educating cold audiences or just pushing sales? ⚡ Is your retargeting strategy fixing objections or just repeating the same ads? ⚡ Are you retaining customers or constantly chasing new ones? Fix your funnel, and you’ll scale profitably. What’s your biggest challenge in lowering CAC? Drop it below.👇 #DTCGrowth #ScalingStrategies #CACReduction #RetentionMarketing

Cost Cutting in the Hospitality Industry: Strategy or Sabotage? In an industry built on service, comfort, and experience, the idea of cost cutting in hospitality is both tempting and dangerous. With rising operational costs and growing competition, many hotels, restaurants, and resorts look for ways to reduce expenses. But the question remains: When does cost cutting become cost killing? 🔍 Understanding the Motivation Behind Cost Cutting Cost cutting isn’t inherently bad. In fact, during downturns, economic uncertainty, or periods of low occupancy, tightening budgets is often necessary to stay afloat. Typical areas targeted include: - Labor costs - Food and beverage expenses - Utilities and energy usage - Training and development - Guest amenities While these areas offer potential savings, indiscriminate cuts can lead to far more expensive problems in the long run. ⚠️ When Cost Cutting Goes Too Far 1. Decline in Guest Experience Guests notice when quality drops — whether it’s a longer wait time at check-in, smaller portions in the restaurant, or missing in-room amenities. These “little things” make a big difference in online reviews and return bookings. 2. Staff Burnout and Low Morale Reducing staff hours or headcount may save money in the short term, but it often leads to overworked employees, poor service delivery, and high turnover. Hospitality thrives on motivated, service-minded staff — not stressed, exhausted ones. 3. Damage to Brand Reputation One bad guest experience can undo months of marketing efforts. Negative reviews, poor word-of-mouth, and social media criticism are costly consequences of poor service, often caused by cost cutting. 4. Quality Erosion Switching to cheaper suppliers or cutting back on maintenance can result in product or facility failures — leading to guest complaints, safety issues, or expensive emergency repairs. ✅ Strategic Cost Management: The Smarter Approach Instead of sweeping cuts, leading hospitality brands focus on efficiency, not elimination. Here’s how: ✔️ Use Data to Cut Waste, Not Value ✔️ Invest in Cross-Training ✔️ Focus on Long-Term Value ✔️ Digitize Where It Enhances Efficiency 🧠 Cost Cutting vs. Value Engineering The key distinction is this: Cost cutting removes. Value engineering improves. Value engineering looks for ways to redesign processes, enhance quality, and reduce costs without sacrificing the guest experience. 🎯 Conclusion: Choose Wisely In hospitality, every cost decision must be weighed against its impact on: - Guest satisfaction - Employee performance - Brand reputation Cutting costs should never mean cutting corners. The goal is to build an operation that is lean but not mean, efficient but not impersonal, and cost-conscious without compromising quality. Because at the end of the day, hospitality is not a transaction — it’s an experience. #Cost_Management #Hospitality #Hotels #Cost_Cutting #Budget #Financial_Thoughts #Strategy #Decision_Making #Hoteliers

In the hospitality industry, technology is no longer a "nice-to-have" - it’s a necessity. When I joined my current employers in 2017, we were mostly manually operated properties with traditional systems. Far away from modern technologies. It was heavy on labor and slow to operate. Then I initiated the need for tech implementation. Here are some areas we implemented technology to keep up with modern facilities while maintaining our traditional human touch services: 1. Energy-Efficient Systems Utilities can eat up a huge portion of a hotel’s budget. Smart energy solutions can help: - Install smart thermostats to optimize heating and cooling - Use energy-efficient lighting like LEDs and motion sensors - Integrate energy management systems to track and minimize waste The savings? Lower utility bills and a greener footprint. 2️. Automated Revenue Management Tools Pricing rooms manually or relying on static rates is a thing of the past. Invest in tools that use data and AI: - Adjust room rates dynamically based on demand - Optimize revenue across booking channels - Analyze guest trends to maximize occupancy These systems often pay for themselves by increasing revenue and reducing underpriced bookings. 3️. Smart Maintenance Systems Preventive maintenance is cheaper than reactive repairs. Enter smart tech: - IoT sensors that monitor equipment health (e.g., HVAC systems) - Digital alerts for potential issues before they escalate - Maintenance scheduling tools to avoid downtime Not only do you save money on emergency fixes, but you also extend the lifespan of your assets. 4. Efficient Housekeeping Solutions Housekeeping is a significant operational expense, but technology can make it more efficient: - Use room occupancy sensors to prioritize cleaning schedules - Implement apps to streamline communication between staff - Track inventory of linens and cleaning supplies digitally These improvements mean less wasted time and resources. What tech has helped your hotel save money while staying ahead of the curve?

Having over 25+ years of experience in Loyalty Economics, the biggest advice I give to businesses is : A loyalty program should be a revenue-generating machine, not a bottomless pit of discounts and freebies. Too often, companies invest heavily in sign-up bonuses and discounts, only to realize later that they cannot sustain these costs. The result? A loyalty program that drains profits instead of driving long-term engagement. Successful loyalty programs focus on: ✅ Encouraging profitable behaviors – Rewarding high-margin purchases and repeat engagements rather than just transactions. ✅ Managing liability effectively – Ensuring points don’t become a financial burden but instead contribute to revenue. ✅ Keeping it cash-flow positive – Using partnerships, premium tiers, and data monetization to offset costs. ✅ Leveraging customer data – Personalizing offers, predicting behavior, and increasing overall profitability. ✅ Balancing emotional & transactional loyalty – Making customers feel valued through exclusivity, surprises, and gamification. Loyalty is not about giving away rewards, it’s about creating habits, building relationships, and driving long-term profitability. If your program isn’t adding to your bottom line, it’s time to rethink your strategy. Are you building a long-term relationship with your customers or just an expensive fling? Follow Mukund Srinivasan for more such informative updates on loyalty economics. #loyaltyeconomics #loyaltyprograms #customercapital #businessplanning #financialmodeling #customerloyalty

Stingy owners will not succeed in hospitality A broken door lock isn’t just a repair issue. It’s a security risk. A flickering bulb isn’t just poor lighting — it’s a message: ‘We don’t care enough.’ Let’s be honest — broken things break your brand. Many hotel owners treat maintenance as an expense. But in reality? Neglected maintenance is silent reputation damage. Real Case: A Boutique Hotel in Asaba Guest complaints were piling up. Not about service. Not about food. But about: ❌ Broken bathroom handles ❌ ACs making loud noises ❌ Faucets dripping all night ❌ Door locks that required “techniques” to open ❌ Room lights flickering like horror movies The staff were trained. The rooms were clean. But the hotel felt tired — and so did the reviews. What We Found: No maintenance schedule Repairs done only when guests complained No spare parts inventory No one tracking wear-and-tear patterns Owner believed “it’s not urgent if it’s still working” But guests don’t wait for systems to collapse — they judge from the first inconvenience. What We Did in 3 Weeks: ✅ Created a room-by-room maintenance checklist ✅ Scheduled monthly preventive maintenance days ✅ Built a fast-response protocol for guest complaints ✅ Gave maintenance staff digital logging tools ✅ Educated the owner on ROI: “Every fix protects a future booking” Results in 60 Days: Maintenance complaints dropped by 70% Guests started complimenting “attention to detail” Staff responded faster and with more confidence Online reviews improved (fewer 3-stars, more 5s) Owner finally saw maintenance as profit protection, not just cost 💡 The Real Lesson: What you don’t fix becomes what your guests remember. Maintenance isn’t background work. It’s brand management in disguise. You don’t lose bookings over one bad night — you lose them over what you refused to repair. Quick Tip: Take a walk around your hotel. Ask yourself: Would I accept this if I were paying to stay here? If not, neither will your guests. Want to turn your maintenance department into a silent hero that protects profit and reputation? Message me. Let’s build a system that keeps your hotel looking sharp — and your guests coming back. If you prefer posts that cover practical cases in the hospitality field, follow me and wait for my posts every day at 1:30 PM.

Cheap solutions cost more in the end. Help your clients see it. Relying on discounts to close a deal might seem like an easy win, but it often comes at the cost of long-term growth. Competing on price can work in the short term, but it’s not a sustainable strategy. So, how can you stand out when clients ask, "Can you match their price?" The answer lies in focusing on value instead. Here’s how: 𝗕𝗲 𝘁𝗵𝗲 𝗘𝘅𝗽𝗲𝗿𝘁 Price is just a number until you explain why your solution is worth it. Use your expertise to highlight how your offering solves their unique problems better than anyone else’s. 𝗦𝗲𝗹𝗹 𝘁𝗵𝗲 𝗢𝘂𝘁𝗰𝗼𝗺𝗲, 𝗡𝗼𝘁 𝘁𝗵𝗲 𝗙𝗲𝗮𝘁𝘂𝗿𝗲𝘀 Your clients don’t want to buy software, services, or products—they want results. Show them how you’ll deliver those outcomes in ways that others can’t. 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁 𝘁𝗵𝗲 𝗛𝗶𝗱𝗱𝗲𝗻 𝗖𝗼𝘀𝘁𝘀 𝗼𝗳 “𝗖𝗵𝗲𝗮𝗽” Low prices often mean compromises—missed deadlines, poor quality, or limited support. Help your clients understand the real cost of going with the lowest bidder. 𝗢𝗳𝗳𝗲𝗿 𝗮 𝗦𝘂𝗽𝗲𝗿𝗶𝗼𝗿 𝗘𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲 Go beyond the transaction. Whether it’s unmatched customer support, faster turnaround, or better alignment with their goals, show them the experience you provide is priceless. 𝗔𝗻𝗰𝗵𝗼𝗿 𝗬𝗼𝘂𝗿 𝗩𝗮𝗹𝘂𝗲 𝘁𝗼 𝗥𝗢𝗜 Frame your price as an investment. Quantify how your solution saves time, reduces risks, or boosts revenue—and why it’s worth every dollar. Price shoppers are everywhere, but the clients who see your value will stick around for the long haul. The key is to shift the conversation from “What does it cost?” to “What is it worth?” --- Follow Michael Cleary 🏳️🌈 for more tips like this. ♻️ Share with someone who needs help with their sales conversations #sales #value #marketing

How to escape the "Telco Hamster Wheel" Telecom operators are trapped in a structurally unproductive investment cycle. Annual capex routinely exceeds 20% of revenue, yet little of that spend creates assets that appreciate. Spectrum is auctioned to fund government budgets, not network efficiency. Infrastructure depreciates faster than subscriber growth. Software is leased indefinitely, creating OPEX drag without strategic control. This pattern is not incidental, but sustained by rational but conflicting incentives. Regulators maximize fiscal yield. Vendors optimize product refresh cycles. Software providers scale license revenue. Consumers demand more for less. Telcos absorb all of it. Value is deployed but rarely retained. Return on invested capital remains below the cost of capital for many operators. EBIT margins stagnate. Cash flow is consumed by upkeep, not growth. Assets reset each G-cycle. Nothing compounds. Other industries have escaped this trap. Jio redefined telco economics by bundling digital services with connectivity, attracting $20B in platform investment and shifting from infrastructure to monetization. NextEra Energy pivoted from rate-based utility economics to platform-scale renewables, trading at 2–3x peer valuation multiples. Delta Air Lines Airlines turned its loyalty program into a $30B financial asset decoupled from ticket sales. Tesla recast the automobile as a software-defined platform, with autonomy and energy features that generate recurring revenue long after the car is sold. All four examples share a common denominator: shifting capital allocation from maintenance to leverage. They monetized data, relationships, and control point, not just physical assets. Telcos must do the same. Productize the network through APIs. Platformize behavioral data. Pursue asset-light infrastructure. Build systems where value compounds over time, not resets every fiscal year.

One simple way to create repeat business: Out-service your competition. Here’s a true story: In this picture, you see Eduardo and me. Eduardo works for a company that sells firewood in my area. But I didn’t know him 3 years ago. Back then, I was frustrated by the cost of firewood from a previous supplier so I googled “kiln dried wood near me”. • First result on the list is BostonFirewood.com. • Its only 2.4 miles so away I decide to give it a shot. • I show up and I’m greeted by Eduardo. Briefly, this is my experience: • Eduardo speaks little English but is kind, helpful and enthusiastic. • He communicates the cost (much cheaper) and offers to help me load my car. • As we load the car we chat and get to know each other. • When we are done, he asks me to wait a minute while he goes back into the office and brings out a box of dried kindling wood and fire starters (no additional cost). Since then I have gone back to get firewood from them every single year. It’s that simple to get and retain clients long-term. → Be clear and transparent in your communication. → Give excellent service at competitive pricing. → Offer to deliver something extra. Outstanding service. Clients don’t just come back to you - they look forward to seeing you again. PS. What is a place you go to over and over because of great service?