Nickel-and-Diming Is Not a Growth Strategy

My friend Dorothy and I checked out a new restaurant in Philadelphia this week that's supposed to be an updated take on South Philadelphia's famed Italian restaurants where spaghetti and meatballs are serious business, and the sauce is called "gravy" — Ralph's, Dante & Luigi's, Marra's, to name a few. Once we placed our orders and settled in, we drank a couple sips of wine and began wondering when they'd bring the yummy bread Italian places are always known for.

No such luck. They charge for bread, and when it arrives, we notice that it tastes like a regular old hoagie roll. That's no update over these older establishments' bread quality and generosity.

Yesterday, I picked up soup and a salad from a nearby vegan/gluten-free place, and same thing. Want bread with that? Pony up.

A Mexican restaurant we love and dine in often used to serve chips and salsa complimentarily, but then they halved the size of the basket for the chips and began charging for the second one

Looking over recent bank statements, I noticed that my bank — which calls itself "America's Most Convenient Bank" — is now charging $1 for a paper statement and $3 to use an ATM that is not one of theirs. Convenient? I think not.

Are we becoming the Nickel-and-Dime Nation?

It seems to have begun with the airlines, which stripped everything out of ticket prices to upsell or charge a la cart for whatever they can. Some hotels still charge for Wifi, which is about as smart as charging for electric or cable TV or running water in the room.

Now it seems banks and restaurants are getting in on the action. Are we about to face an onslaught of a la carte, petty pricing? 

Nickel-and-diming customers is not a smart growth strategy. You may make a little dough on bread or tortilla chips, but you're annoying customers and undermining hospitality. Build the cost into the menu pricing strategy.

It's one thing to see this sort of niggly pricing from small business owners, but you'd think larger companies, like a bank that likes to think of itself as having cornered the market on convenience would know better. I'm sure the cost to run a bank these days, post-Great Recession and all the ensuing regulations, has increased. However, charging me $1 for a paper statement is not game-changing innovation.

Other companies do the same thing. I had an annual service contract from a company that increased the fee by 10 percent each year. After a few years, that adds up, with no additional value offered. Looked at your cable bill lately? Yikes! These little charges, which may be no big deal to each customer, multiplied by tens or hundreds of thousands of customers mean big dollars for them.

The problem with nickel-and-diming is that companies roll out these silly charges in sheepish, defensive, sneaky, or arrogant ways. They seem to know they're being annoying and to be too unimaginative to really figure out a pricing strategy that would delight customers.

Take a lesson from Virgin America

A few weeks ago, I flew to and from Los Angeles on Virgin America which monetizes everything. Of course you pay for cocktails, to check luggage, and for any food. They also charge for movies and internet access, bombard you with third-party and Virgin promotional messages, and they upsell you at every turn. But you know what? As customers, we don't mind. In fact we may actually like it.

Virgin delivers an experience of their brand and service that is young, hip, fresh, multi-cultural, and 21st century. The flight attendants are dressed in costuming right out of The Matrix. Climb aboard and hear contemporary music in a space filled with mod lighting. Each seat back has a screen that becomes your onboard computer.

Of course, you can watch a movie on this screen, but what you'll find when you turn on the movie is that you actually have choices. Lots of choices. No, they don't come free, but you don't mind paying when you have so much variety.

Want something to eat or drink? Simply place your order on the screen, and one of the Matrix Crew delivers it.

Need to speak to one of the other customers onboard? No need to get up; simply send them a seat-to-seat message via the screen. (I was tempted to send a message to the woman three seats behind me who couldn't stop talking loudly for six hours while I tried to sleep! I resisted.)

Virgin isn't sheepish at all. They have turned the realities of modern-day airline management, filled with ever increasing costs, into an opportunity to better serve customers. Instead of sneekily charging for movies, they've upgraded the whole movie watching interface with loads of services that make a long flight relaxing and comfortable.

If you're faced with the pressure of having to pass along a cost to customers, consider the best way of doing so before rolling out a nitpicky charge. How can you make the overall experience around this issue better and actually introduce an innovation? What do you want to communicate to existing customers who will be affected by this change?

Put yourself in your customers' shoes and make us want to pay that extra charge.

New terrain for nonprofit leaders: the experience

As the marketplace evolves and our customers, donors, members, visitors, and constituents become more sophisticated, our need to evolve our organizations becomes an imperative, too.

In the business world for decades now, companies have been applying strong strategic focus on the experiences customers have with their brands or services. Bernd H. Schmit codified these ideas and approaches in 1999 with his book Experiential Marketing, now sadly a collectible in Amazon for 1¢ in its used section. It's still an important book — perhaps more so with generations now so glued to screens that they're missing real life experiences.

(Have you seen the Toyota commercial where the helpful Toyota dealership employee, Jan, encourages a customer who's spent hours researching cars online to take a test drive?)

It's time for nonprofit leaders to pay attention to and capitalize on this practice. I can think of many experiences with organizations that have been in the underwhelming to not-so-good end of the spectrum. Here are three places to start.

How's the Experience of These 3 Operations in Your Organization?

Material Donations

True confession: I place a little too much sentimental value on certain material goods — favorite clothes, gifts people have given, good books, household objects. Fortunately I live in a loft with a minimalist, so being a hoarder is out of the question. That said, I'm nowhere near being a minimalist.

When I work up the gumption to clear some clutter — a task I loathe! — I pack up my gently used treasures and head over to a charity that accepts such objects and imagine the new life these things will have with someone who really needs them. The problem is the experience of donating material goods is pretty awful, especially for a sentimentalist. 

Your stuff goes in dumpsters or trash bins — or the equivalent. The staff or volunteers pretty much ignore you. And there are so many other boxes, bags, and piles of other people's things that you don't feel like you're doing anything special or useful. To the contrary, you feel like you just drove trash to a location, instead of putting it out on the curb.

We need to work on this. People want to feel that their donations are helping people, are necessary, and that in a small way they've made the world a better place. Not that they have just dropped off garbage.

Financial Contributions

Here's another problem area. There are some organizations that are truly grateful for your financial contribution. I've donated to others where you receive no personal acknowledgement. Instead, you're placed on the email newsletter list, getting news you can't use.

As my grandmother taught me, if you can't take the time to thank someone for a gift, donors soon won't take the time to send you one. 

Volunteerism

The volunteer experience is also one that needs an upgrade. I remember volunteering as a project captain for a disaster of a project. The job was too big and overarching for the time alloted; other volunteers did not show; the facility was ill-prepared; and the coordinating organization for this and other volunteer projects was MIA. 

Frankly both parties could do a better job with this. Sometimes people who volunteer aren't always reliable or as well-intentioned as an organization would prefer. And organizations sometimes put little thought or effort into creating a great experience for volunteers.

Take a look at your operations in these areas. Have someone mystery shop the experience and provide feedback. How does it feel to be a donor or volunteer? Are you engaging individuals? Is your brand coming alive through these experiences? Or are you buliding your brand through your marketing operation and undermining it through these or other operations?

Tips on talking: banishing blah blah blah

Has this ever happened to you at an event? You're having a nice time, networking, connecting to the cause or conference, or having fun at a festival or fair, when suddenly the collective energy spirals to a stop.

Someone is standing on the stage, holding the microphone, and all you hear is "blah blah blah blah blah blah." A montonous stream of words exits the speaker's mouth and tumbles out of the sound system, casting a pall over the audience. 

Public Speaking Tips

Here are 4 tips to help you improve your speakers' or your own presence as a public speaker, even in short roles.

1. Don't read.

I advise a client on an awards event that is part fundraiser and part influence-builder. Through our strategy, we engage civic leaders from disparate arenas in brief but meaningful speaking roles. The speaking effectiveness has been equally diverse.

Here's my petpeeve: reading remarks. If you have a :30 to 1 minute speaking role, jot a few bullet points and talk to us. Do not read to us. It's deadening, and as I learned from a speaking coach I worked with early on, the audience will forgive you of anything except being boring. Worse, you sound disengaged and dispassionate, coming across as if you invested no time or energy in your role. If you can't make that small commitment, decline the speaking engagement.

If your speaking engagement is longer, your notes may need to be in another form, and it's perfectly acceptable to use them — discreetly. You may also benefit from mnemonic devices. Or you may do well with training or personal coaching to build your speaking presence and skills.

2. More is not more.

How many events have you been to where a speaker gets on stage to make "brief" remarks and talks so long you think the person has moved in? Me, too.

People, more is not more. If you haven't noticed, we have become an attention-span deprived culture. Even if we're at a professional development event or class, our key reason for being at an event is probably not to hear speakers pontificating. The pontificator list includes:

• sponsors with unclear messages or blah blah blah about how wonderful their companies are,
• many politicians, especially before an election,
• presenters who are really nervous, and
• people who seem to love to hear themselves talk.

Imagine listening to yourself as an audience member. Are you telling a story? Are you making me laugh? Am I engaged or emotionally moved? Am I gobsmacked by a new discovery or statistic or result? Or am I hearing blah blah blah? What's the experience you want to deliver?

4. It's not about you.

An event is really about a connection between the audience and the subject matter. Even if you're receiving an award, the event is really not about you. It's about engaging and transforming the audience.

Tell us something inspiring. How did you get to this place to win this award? How did you do it? How can I emulate your behavior and improve my life? How can I follow in your footsteps and make the world better?

4. Contain yourself.

It's natural to feel nervous about speaking. You're up there all by yourself with hundreds of faces staring at you, waiting for brilliance, and who knows if the sound system will work or if, unbenownst to you, the static electricity in your pant legs is exposing your socks and bare legs (yes, I saw this once).

As the saying goes: "Keep calm and carry on." The audience reflects your energy right back to you. Breath. Relax. Be in control and contain your emotions.

Once at a major conference for a top national association where I spoke, even they had challenges. The sound from another session was broadcasting into my meeting room, precluding my audience from hearing me. 

I could feel myself getting angry and flummoxed — how could I simultaneously handle the problem and continue speaking? Afterall, the show must go on, right?

I took a deep breath and soon realized the audience was as aggravated if not more so than I. They took care of it. Several people ran out to find a tech guy. People complained to the organizers and in evaluations. I realized this was not my problem but rather my opportunity.

I continued my talk, calmly and with large doses of humor, maintaining continuity in my subject matter, so the audience stayed with me. At the end, the audience applauded — not necessarily because I was so brilliant, but because together we achieved success. I maintained control of the room and session, and they got what they came for.

Practice staying calm and relaxed behind the microphone. Make your presentation about the audience.

Whether you're speaking or your engaging speakers for an event, don't leave their speaking behaviors to chance. Craft strong messages. Prepare your speakers. And consider training if necessary. Just don't blah blah blah us.