That's a rip-off

You may have seen a fairly recent exchange in the press about a customer who complained about being charged £2 for a cup of hot water and a thin slice of lemon in a cafe/bistro. Her point was that all that was provided was the cost of heating the water and one slice from a fruit that cost about 30p.  Maybe at first glance you might be inclined to agree with her!

However, the complaint was made on TripAdvisor and the cafe/bistro manager replied in some detail – although for reasons that have not been established the items have now apparently been taken down from the site. His response shed an interesting light on the economics of running an eating establishment. For example – the customer came into what was presumably a warm, clean and inviting place, was shown to a seat at a prepared table and given a menu. The waiter took the order, entered into the till and then someone collected a cup and saucer, got a lemon from the fridge, selected a knife to cut off a slice and put the lemon back. The hot water was drawn off (from a ready supply) and the drink was delivered to the table where I expect the customer enjoyed the facilities for a further quarter of an hour. The then bill was printed off, delivered to the table and payment processed. After the customer left, the waiter cleared the table and someone had to see that the utensils were washed and put away, and then of course the table had to be prepared for the next customer.

We’ve all been in eateries where not all these services were provided – but the point is that the customer wasn’t complaining about any of this!  Her complaint was the price (and also that her comments at the time were met with a very rude response – which, in the light of the manager’s comments, might be understandable, although regrettable).

The above list of what had to be done to service a simple order for a low cost item sounds a bit OTT, doesn’t it? But surely – all those steps had to be taken if the customer was to get what she ordered?  Not only that, but the manager then went on to list the overheads of the business, such as salaries, NI, insurance, staff training, business rates, light and heat, equipment etc. And that doesn’t even take account of the ‘non-balance sheet’ items, such as the owner’s and manager’s business experience, vision and plan, in order for the cafe/bistro to exist in the first place.  Looked at it that way, maybe a cup of hot water and a slice of lemon was something of a loss-leader!

As the owner of a business which essentially provides a service, I have enormous sympathy with the manager (and indeed the owner). On many occasions in the past it’s been suggested to me that the fees charged are disproportionate to the ‘end product’ that the customer sees – whether it’s a set of accounts, a business plan or simply some advice. What makes people think that I’m sitting here in my modern office, with my lights and heating on, my business rates and insurance paid, my staff ready, my indemnity cover in place, my computer systems up to date, my professional development (and that of my team) maintained – to say nothing of  all  the years’ training and experience it took to get me to the stage I’m at today – simply so that these people can, if they choose, walk in off the street and get an appointment to access all of my expertise and professionalism, without paying a proper price for the service? The answer is of course that they don’t think. They make the same mistake that the cafe customer did of judging solely by what they see as the direct cost of the product they have in their hand, without thinking about the cost of the infrastructure that lies beneath to enable that product to be provided.

So next time you feel you’re being overcharged in a restaurant, or by an accountant or any other professional office, just think first about what it actually costs the provider to offer you that service in the first place! And don’t allow some of your customers to think the same of your product or service. I’m sure you provide a fair value exchange!

That said, I can’t close without just pointing out that, these days, I have many clients who do appreciate the value of the service I’m providing – and, if you’re one of them, thank you for your understanding and your custom!