The $2,000 Bottle of Milk – Greg Nathan’s 2-Minute Tips
In today’s 2-Minute Tip, Greg talks about helping franchisees ‘Master What Matters’ – a struggle for most small business owners. Great Tip, Greg!
The $2,000 Bottle of Milk
It was 12.30 A.M. and my wife and I were dead tired, having just arrived home after a 20 hour flight from Europe. We both felt like a cup of tea but there was no milk in the house. The good news was the 7-Eleven down the road would be open. I always make a point of shopping there, even though I have to walk a bit further, because I like to support the local franchisee. So off I headed into the dark to visit the store. With a large carton of milk in hand I pulled out my wallet to pay. Because the guy behind the counter looked as though he’d also been flying for 20 hours, I thought I’d make the transaction more interesting.
“Do you know how much I pay you for my milk?” I asked.
“Yes that will be $5.25” he responded politely.
“Actually I come here on average three times a week to buy milk, so how much is that?”
“Well I guess that would be $15.75”
“And I reckon I’m here 48 weeks of the year, so how much is that?”
Now we were into calculator territory. He pushed some buttons and looked up with a smile. “That would be $756.”
“I’ve been shopping with you since we came to live in this area three years ago. So how much have I spent with you on milk?”
Tap tap tap on the calculator.
He was now grinning. “That would be $2,268. You are a very good customer!”
We both laughed. He got the point. When it comes to valuing customers, it pays to think long term rather than it being just one transaction.
At FRI, we call this longer term thinking “Mastering What Matters”. If you’ve recently hired us to deliver a conference presentation, you’ll know this is one of five pieces in our Franchisee Wheel of Excellence. Mastering What Matters means thinking about the bigger picture and working on tasks that contribute to longer term business profitability. This is usually related to improving knowledge and systems, analysing indicators of performance, or setting and monitoring goals. Here’s an example.
When I or one of my team present at a conference, we are doing important work IN our business. But when we research new concepts to include in future presentations, analyse the costs associated with preparation and travel time when delivering presentations, or set targets for how many presentations we would like to do over the next 12 months, we are working more ON the business — Mastering What Matters.
Any task that creates a systemic improvement to productivity, gives us a clearer understanding of our profitability, or focuses our mind on the future sustainability of the business could be classed as Mastering What Matters. When we analyse customer satisfaction or think about customers in terms of their long term value to our business we are also Mastering What Matters.
The pay off
Of course we all need to attend to the tasks that keep our businesses running day to day. But all tasks are not equal in their impact on long term success. In our franchisee performance research we’ve found franchisees that spend most of their time Mastering What Matters achieve significantly better financial results. They also have a better life as they are able to spend worry free time away from the business knowing there are systems in place to ensure the important things are taken care of.
Mastering What Matters is a mindset where we think about tasks in terms of their impact in the long run. This requires thinking and planning time, which is not as easy as doing routine work. But the pay-off is huge. Are you focusing enough on helping your franchisees to Master What Matters?
As a small business owner myself, I really appreciate this reminder to balance both our short term passion for serving our customers fully and taking time daily to focus on ‘What Matters’. Thanks Greg!