Are We Forgetting Why EFTPOS Was Invented?

By Sarah Ripley, Wizard of Ads Partner

I am not a cash carrier.

I am gen Y, and we are notoriously NOT cash carriers. Why?

For me personally, I feel I learnt the habit from my father who never did himself, (probably because Mum always did), but outside the habits of the Ripley family, gen y-ers don’t carry cash because we have grown up in a society where almost every retail or service industry offers EFTPOS as a means of payment. Any business that doesn’t is seen to be either behind the times or doing the dodgy with the tax department…

The revolution of other means of payment burst onto the scene in the early 90’s, with the introduction of ATM’s, and EFTPOS machines, (which stands for Electronic Funds Transfer and Point Of Sale by the way). It was technology’s answer to making paying for something quicker and easier. Cheque books were thrown out the window, with some people still keeping them for the odd tradie. Enter the 00’s and we started EFT-ing our funds to even tradies – wow things had moved along!

A few years ago, banks decided to capitalise on the convenience a customer gets when he/she pays with EFTPOS, (and the popularity!) Thus they started charging vendors who provided these services a fee. What flowed on from there was vendors either passing this charge onto customers, OR charging a minimum fee to use EFTPOS.

I remember the first time I was told there was a minimum $20 EFTPOS transaction at a dingy trinket store. At first I didn’t understand, then once I realised I didn’t have $20 in my bank account, I made up a silly excuse of not needing anything anymore and quickly left. I have always remembered the experience.

Funnily enough, this passing of a minimum transaction has become extremely popular – with very few business (besides McDonald’s and your large chain supermarket) not adopting this ludicrous norm. And what’s more, it is becoming even more popular as businesses are seeing this as an opportunity to up-sell… Hmm…

What is being forgotten in all this greed is, you guessed it, the customer.

Remember that you installed EFTPOS as a means of payment why? BECAUSE IT’S FREAKIN’ MORE CONVENIENT FOR YOUR CUSTOMER BECAUSE YOU WANT HER BUSINESS! Offering it, and then charging for it, well that is just plain greedy. Yes you may get an initial “up-sell” to the poor person who has forgotten to get cash out before entering your shop, but I can guarantee that she left your premises feeling cheated.

Then there’s the alternative of actually now being given the option of paying $0.50 to use EFTPOS. Oh gee thanks – that’s a great option, either pay extra than my money-carrying counterpart, or buy a stick of gum I didn’t want…

Yes I hear all those business owners saying, “But I get charged a fee for each transaction, anything under $20 isn’t worth it!” But isn’t it? How many would you really get in a day that wouldn’t meet this? If it really is that detrimental and eating into your profits that much – add the extra $0.50 to your product/service – the customer will never know!

“But I don’t enforce it rigidly”, well what’s the point of having it written in bold writing on the machine? If I see it, and it doesn’t get enforced, I’m going to think I have gotten away with it and “WOO HOO!” off I trot. Next time I come in, one of your staff may not be as generous… I get pissed off with the inconsistency, and will probably vow to not come back unless I have cash in my wallet, (which I will never!)

Moral of the story – remove the “Minimum EFTPOS $X” from your machine. You will be the minority and have a happy customer that leaves with a good lasting impression.

Making Business Decisions

Are you leading the horse… or is the horse leading you?

By Sarah Ripley, Wizard of Ads Partner

My working life is almost a decade old – quite primitive in terms of the 50 year average work life span. In that short amount of time, I have been numerously exposed to the underlying politics that exist in many workplaces, and particularly the influence certain employee personalities have on decision-making.

As a child, you are moulded to expect that people who “out-rank” you, such as your parents, teachers, family friends and even older siblings, will always have the final say. They are the boss. What they so, goes. You follow what they say. They are older, and wiser, they make the decisions.

This same attitude should in theory automatically transition to the workplace – the boss makes the decision, the employee follows. However, it seems with the introduction and encouragement of “employee empowerment” in the 1980s, the lines were blurred between empowering employees and allowing overpowering of decisions.

To define: “Employee empowerment means you give your employees the authority to do their jobs; management by consensus means you give your employees the authority to do your job.” – Roy H. Williams, The Wizard of Ads.

The role in which your employee plays with you and your business is based mainly upon the relationship you have fostered with him/her. It seem the closer the relationship, the more likely your decision-making will be influenced, (much like how you will ask your best friend for advice before you would ask a stranger).

Don’t make your employees your friends.

When you allow your business relationship to turn into a friendship relationship, it compromises your ability to make decisions in the best interest of the business. Your focus shifts to your friendship and keeping that healthy instead. This will seriously inhibit your success.

Remember that you are the decision-maker, and your role is exactly that – TO MAKE DECISIONS. It is great and often very beneficial to get the input of your employees. However, ensure their input doesn’t turn into your output.

10 years on and a little older and a little wiser… 

EXTRA EXTRA! Get something extra! (But you will have to pay for it... )

By Sarah Ripley

Here’s the scenario…

I have been a loyal, passionate and forever grateful customer of a sushi cafe since its opening a few years ago. Add this to the undying feeling that I, personally, contributed greatly to its quick expansion from a small, dingy cafe to a sparkly three-shop business enterprise in only a few years through consistent patronage and being an inside champion - converting sushi lovers and even mere likers to this particular sushi shop’s greatness.

Alas… this relationship is no longer existing... as my latest experience will no doubt be my last. Due to a common mistake many businesses make when they forget about the customer and view them with dollar signs above their heads.

Here’s the problem…

As I have come to expect is the uuuuus, (Aussie slang meaning ‘usual’), when one orders sushi, you receive COMPLIMENTARY soy sauce, ginger and (for those exotic types), wasabi paste to enjoy your sushi in the more “traditional” way, (it also tastes AMAZING!) Over the years, I have tried to go with tradition and slowly began to love my tasty morsels with all three amazingly flavour-adding condiments, and more so, expect their presence next to my rolls each and every visit. Key word here – EXPECT.

Here’s the clincher…

On my latest venture to my Japanese sanctuary, I was briskly told that no longer could I relish in the ginger, soy and wasabi dream team – I had to choose only one, and pay 20c each for any extra or addition of the other two. WHAT! That’s like making me choose between my three children…

Here are two reasons why this experience is not only bad sense, but is also bad for business.

1. Building and fostering an expectation, only to then backtrack. Loyal customers don’t generally like change that negatively impacts them. If the extra pay for condiment rule had been the norm from the start I don’t think I would have an issue, however the sushi cafe had ALWAYS offered all three, so to turn around and change this made the experience… well… shimata, (Japanese for… you can probably guess).

2. The word “extra” when used in conjunction with money never sits well, regardless of the amount. Being asked to pay extra for condiments I used to always just generally pisses me off.

It begs the question “where does it stop?” Will restaurants start charging patrons for using cutlery? To use the bathroom? To sit at a table?!

Here’s the lesson…

Businesses (and not just hospitality-specific), need to place more emphasis on the EXPERIENCE of the customer, and less on making the extra buck here and there.

The condiments are there to make my meal more enjoyable… and a cafe or restaurant I would think should do all that it can to make my meal and overall experience as enjoyable as possible, else what are they doing there?

It comes back to the business forgetting to view the customer as real, with real expectations, needs and wants. You start viewing your customers with dollar signs above their heads, with your business decisions beginning to revolve around money alone… (insert warning bells).

Unfortunately, I no longer feel any need to frequent the sushi cafe anymore…

That 40c suddenly has a much greater cost… the cost of a loyal customer GONE. 

Revise Your Need to Incentivise

By Sarah Ripley, Wizard of Ads Partner

It’s the oldest trick in the book… which many businesses have used in an attempt to attract new customers into the market, or poach existing from competitors. Incentive schemes.

It also seems to be the ‘go-to’ marketing option when money is tight and things are getting a little desperate so you want some kind of insurance of an activity that will work. It’s like asking the plain Jane girl at school to the dance as a back-up, just in case the hot popular girl turns you down…

Only pay another $1 to upgrade to a larger size, 10% off your first ten visits when you join today, free night’s stay with every booking, 0.9% interest on balances you transfer from other credit cards….

We are exposed to hundreds of incentive-type schemes every day from businesses trying to vie for our attention through numerous offers that are seemingly ludicrous for us as consumers to pass up. But what kind of customers are these incentives attracting and will these customers be fruitful long-term for the business?

There are two general types of customers – transactional and relational.

“Transactional shoppers are focused only on today’s transaction and give little thought to the possibility of future transactions. Their only fear is paying more than they had to pay. Transactional shoppers are looking for price and value”. (Page 10, Making Ads Work).

In contrast, “Relational shoppers consider today’s transaction to be one in a long series of many future transactions”. (Page 10, Making Ads Work).

When a business employs an incentive scheme (which is usually price/value driven in some way) – they are attracting a transactional customer.

A Harvard University Study of “Switchable for Reasons of Price Alone” customers (i.e. transactional customers) strongly discourages businesses from going after these kinds of customers. “If you appeal to these customers, you will enjoy initial success, but your position will never be a strong one, as these customers will switch from you just as quickly as they switched to you for precisely the same reason”. (Page 17, Making Ads Work).

Furthermore, when you incentivise something, you are indirectly cheapening the value of the product/service and therefore casting doubt on quality and the integrity of your business.

Take the case study of Townsville-based internet provider Rawnet, which executed an incentive scheme to James Cook University students (that myself and fellow students were invited to take part in), which eventually aided in Rawnet’s “execution”.

We were approached by Rawnet with the attraction of free alcoholic beverages at the popular “Uni Club” the following Thursday night, (which was THE night to attend). The only condition was – we had to take a Rawnet modem home, and someone would contact us at a later date to see if we were interested in signing up.

Sounds great! Sign me up! We all echoed… however I among others were rather sceptical at this offer which seemed “too good to be true”.

Alas – we arrived the following Thursday night to a bustling crowd of jealous onlookers as we received our arm bands which entitled us to our complimentary beverages. We were asked to provide our details at some point during the night – however after a few sarsaparillas it was difficult to remember one’s name, let along record it. We were given Rawnet modems as we stumbled out, and told we would be contacted in the following few days for sign up.

None of us ever heard from Rawnet, and shortly after it made news around town that the company had gone broke.

So why did this not work? Rawnet handed over the incentive BEFORE a commitment was made, therefore we received free drinks, and they received a bill.

The general idea wasn’t a bad one – as they had easily identified that alcohol would no doubt encourage Uni students to almost anything, however this plan was flawed from the get-go by three main points:

1. Primitive planning process that didn’t ensure details were taken, and then followed up for sign up.
2. Targeting uni students for this kind of business was a risky venture, as most have limited means and therefore funds to keep within an internet contract.
3. The incentive had NOTHING to do with the business itself, so was rather confusing.

Basically – this incentive scheme was a big nail in the coffin of Rawnet.

So what can we learn from this example?

When you incentivise something, you are attracting the customer for the wrong reasons, (and the wrong customer as mentioned above). Attracting customers to do business with you should be through formulation of a strategy and persuasive MESSAGE on how your business can fill a customer’s needs, not because of something gimmicky.

So next time you think of creating an incentive scheme to attract new customers… think of the long-term affect this will have on your business in terms of how current customers will feel, the sustainability of the scheme, what kind of customers it will attract and their future value to a business.

“…there’s nothing in this world that someone can’t make worse or sell a little bit cheaper” - Roy H. Williams

The Editor. Ready to grow your business? Contact Sarah.

Do You Buy Your Advertising... Like You Buy Gum?

By Sarah Ripley, Wizard of Ads Partner

Samantha: It was an impulse purchase!
Carrie: Gum is an impulse purchase… this is more than gum!

- Samantha trying to justify her cosmetic chemical peel decision as an impulse purchase she has on Sex and The City.

Carrie has perfectly expressed the reasonable expectation of an “impulse purchase”. Much the same can be said about impulse purchases with your business’s marketing - they should be strictly reserved for stands in grocery shopping lines.

There are many scams, tricks, sneaky tactics, dodgy offers, (you get it…), out there – victims often being new businesses. “If it sounds too good to be true, it probably is”.

The issue you face when making an impulse purchase is that you aren’t efficiently thinking about the resulting consequences of this decision, resulting in actions that aren’t working towards the needs of your business as well as wasting a huge amount of money… You need to ask yourself every time, “Is this the highest and best use of my money?”

Sales reps use a lot of tactics in order to sell you something. Some of the common ones include:

Offering “free” editorial with your print Ad purchase, therefore making the “package” more appealing. It can be appealing to have the opportunity to write more about your business, but be warned – the publication usually will have no obligation to print your editorial exactly as you have supplied and may change if they wish. You haven’t paid for the editorial space so it leaves the door of your business wide open.

The allure of “distress rates” which are the rates that are discounted at the 11^th hour just before the publication needs to go to print, whereby spaces need to be filled and therefore prices cut. The main issue that stems from this is you will most likely not have sufficient time to produce a well-structured message and attractive Ad, therefore you are really just placing an Ad for the sake of it.

With broadcast media, (i.e. radio and TV), bundling a schedule with a lot of bonuses. Bonus spots are not paid for by you; therefore the station has no obligation to actually run them. They are the push up bras of the broadcasting world – FILLERS that are all for show – used to make things look bigger, better, and more attractive but when it’s time for action, they seem to disappear… Also, bonus spots cannot be scheduled to the time slots/shows as paid spots can – they can play at any time and therefore you aren’t getting the consistency and repetition required for effective advertising.

Advising you “your competitors are doing it”. This is an all time pet hate tactic used by reps which comes back to the old adage your Mum would have said to you, “If little Jimmy was going to jump off a bridge, would you?” Just because your competitors are, doesn’t mean you should or have to. And being in the same places as your competitors can often work AGAINST you.

If you don’t have an effective marketing message and strategy the above sales rep tactics will cause you to make impulse purchases. The result being, more wasted marketing dollars.

So, keep impulse purchases for the grocery store and out of your business – even if it does sound amazing, as chances are, your impulses will stifle your business’s growth.