It never ceases to amaze me how often I can find modern marketing and business lessons in work that has been around for a long time. The Goose That Laid the Golden Eggs is one of many fables attributed to Aesop, and one that can be found in many compilations of his works. It is a great example to many of us who are thinking about the Product and Price part of our marketing mix. When times are tough, people are often tempted to make changes to their business that go on to have unintended consequences – some of which affect their customers – and go on to damage their business. Then the spiral starts. Cut costs. Lose more customers as the cost savings damage customer service. Cut costs again. Lose even more customers. Call in the receiver…

The Fable – The Goose That Laid The Golden Eggs

A man and his wife had the good fortune to own a goose which laid a golden egg every day. Lucky though they were, they soon began to think they were not getting rich fast enough, and, imagining the bird must be made of gold inside, they decided to kill it in order to secure the whole store of precious metal at once. But when they cut it open they found it was just like any other goose. Thus, they neither got rich all at once, as they had hoped, nor enjoyed any longer the daily addition to their wealth.

Business Example – #1

A company with a large field based service and commissioning staff merged with another similar company. In harmonising their benefits and policies, it was noticed that one of the companies was in the habit of allowing almost any field based person to claim up to £5 against receipts for breakfast when they left home early in the morning. In the other company, this practice did not exist. The harmonised terms stated that unless somebody was on the road before 06:00am, then they should not claim for breakfast. The unintended consequence was that almost the entire staff began leaving for site at around 07:30 and arrived whenever traffic permitted. The company saved a lot of £5 breakfasts but lost many thousands of pounds worth of site time and pre-working-day customer meetings. Those little meetings. The meetings that are often the source of the additional orders. The additional orders that make a real difference to the profitability of a longer term project.

Business Example – #2

A small gardening and fencing business does the first job for a new customer. A price is agreed and a date set for the work. At the end of the day, all the waste is piled in a corner. When asked about removing the waste, the business owner stated “Oh, we do not take away the waste unless you pay extra, that’s your problem now”. The result – what might have led to a series of lucrative work-packages and potentially even a retainer based service becomes yet another “once only” customer (who goes on to spread the word).

Morals

• Those who always demand more are in danger of losing everything.

• Greed destroys the source of good.

• Think before you act.

  • Ask yourself about the consequences of any cost saving actions:

    • To staff;

    • To customers.

  • Especially any that may be unintentional.

• Remember –people you employ are one of your main communications channels to your customers.

This was a guest post by Paul Fileman of SPS who are a national team of proven senior management professionals, passionate about working to help businesses achieve their next level of development and performance. Whether they are facing market changes, financial problems, people/skills issues, or are preparing a major project, they offer dedicated support from a multi-disciplined team of experts.

Free updates:
If you enjoyed this post and would like to be kept updated on future posts, then please click here to get updates by Email. Alternately you can follow the updates the Business Opportunities And Ideas Facebook page or follow me on Twitter.