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In my days as a wholesale baker, I had a customer in Washington, D.C., who ran five high-volume delis. To obtain his business, I had to cut my margin to the bone.

He was a bully. Two or three times a week, he would call the office to yell at the customer service reps. He abused my delivery drivers. The outside sales rep was terrified to call on him because of his belligerent behavior. After two years of this problem, I visited to say that even though we valued his volume, we no longer valued his business. We obviously could not satisfy his needs and no longer were willing to try. I gave him a two-week notice to find a replacement company.

When I returned to the office, I announced the decision to my staff. There were cheers. In the weeks after, the office was calmer. I attributed it to the fact that my staff learned that I valued them over one lunatic customer. All of us were happier.

Two months later, the customer called to see if I would meet with him. I did. In the eight weeks since he was "fired" he had used three of my competitors. He did not like their products or their service. His customers were complaining that the great muffins were gone. He did not realize how good we were, and he wanted us back. I agreed, with conditions, and he became a model customer.

The lesson is simple. When we allow our fears to run our business, we lose. I feared the loss of volume that was barely profitable. I feared the confrontation with the customer. I feared that my staff would learn that they do not have to bend over backward to satisfy customers. None of the negative consequences happened.

In the pizza business, the fear I hear expressed most is, "I can't raise my prices."

Costs are up, competition is fierce and volume is spotty, especially during the week. Many operators fear that raising prices will drive down volume. In my experience, the volume you lose is from the coupon shoppers that are not your core customers. They are opportunity customers who only buy because of price. If you did activity-based accounting on these customers, you would find they are the same ones that complain to your staff, use lots of napkins, rarely buy drinks, opting for a glass of water and demand extra service, crowding out your core customer from receiving excellent service.

The top line rules our hearts, but profitability should rule our heads. Serving demanding customers at a discount does not build a sustainable business. Take the time instead to create better products and service so your core customer base expands. Find new avenues in catering, office parties and schools. Get out of your shop and meet new customers in your neighborhood. Tying on the apron to prepare for the rush is a thrill, but serving meals that do not drive profitability is not worth the time.

Dig deep into what really drives your business, and do not be afraid to fire some customers. Raise your prices and provide more value, which will attract the type of customer you really want. Let go of the screamers that elbow their way to the front of the line, waving their coupons all along the way.

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User Comments – Give us your opinion!
  • Rich Leivenberg
    45302599
    This is an excellent lesson in being proud of what you have to offer, whether it is a great product, excellent service or just a supreme value. Hopefully, it is all of the above. The best credo is to Sell on Quality! If you have a great service or product, your customers will value it more than anything and they will in turn learn to pass it on to their customers.
  • rich leivenberg
    45302569
    This is an excellent lesson in being proud of what you have to offer, whether it is a great product, excellent service or just a supreme value. Hopefully, it is all of the above. The best credo is to Sell on Quality! If you have a great service or product, your customers will value it more than anything and they will in turn learn to pass it on to their customers.
  • rich leivenberg
    45302518
    This is an excellent lesson in being proud of what you have to offer, whether it is a great product, excellent service or just a supreme value. Hopefully, it is all of the above. The best credo is to Sell on Quality! If you have a great service or product, your customers will value it more than anything and they will in turn learn to pass it on to their customers.
  • Randy Woodward
    45215747
    This is a common problem in most businesses, and the majority of them make the mistake of spending the lion's share of their time, attention, and marketing expenses on their least valuable customers. When I was in the pizza business, we had certain guests we only saw twice a year, during BOGO, and they always complained and always ended up getting a remake. Four pizzas for the price of one -no way to make a profit there. Now that I am in the casino business, we have the same issues, and most comp dollars go to low dollar players who complain loudly. Personally, I would rather pay more and get an excellent product and service, but no one seems to cater to me -and having to wade through a hoard of bargain seekers will keep me away. The low-profit, high-volume model may work in used car sales, but when it comes to hospitality, I'd rather be one of the few.
  • Edward Zimmerman
    45214618
    thanks for your comments. The tie-in with Groupon and Living Social's failures is very clear.
  • Edward Zimmerman
    45214239
    thanks for your comments. The tie-in with Groupon and Living Social's failures is very clear.
  • Edward Zimmerman
    45214226
    thanks for your comments. The tie-in with Groupon and Living Social's failures is very clear.
  • Edward Zimmerman
    45214107
    thanks for your comments. The tie-in with Groupon and Living Social's failures is very clear.
  • Fred Frazier
    45205528
    Amen! Amen! Amen! I couldn't say it any better. You are absolutly right on the money with your advice. I learned this a while back and the results can be amazing. Focus on providing more service than expected to your core customer base and you won't have to worry about losing the "coupon clipper" crowd -- and your business and profits will grow expotentially because you'll gain the best advertising you can possibly get - word of mouth.
    Fred Frazier
  • Fred Frazier
    45205489
    Amen! Amen! Amen! I couldn't say it any better. You are absolutly right on the money with your advice. I learned this a while back and the results can be amazing. Focus on providing more service than expected to your core customer base and you won't have to worry about losing the "coupon clipper" crowd -- and your business and profits will grow expotentially because you'll gain the best advertising you can possibly get - word of mouth.
    Fred Frazier
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Latest posts by Ed Zimmerman
Ed Zimmerman
Ed Zimmerman is a pizza industry veteran and President of The Food Connector. His almost four decades of foodservice experience includes food manufacturing and distribution leadership, food industry technology, marketing services and restaurant and grocery operations management.
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