Today’s guest post is written by Lisa Gerber.
I had an interesting conversation at a holiday cocktail party with the COO of a ski resort. He was sharing with me a complaint he had received about the quality of grooming on the cross-country trails. It was bothering him and he was trying to decide how to respond.
The problem, he explained, is people have high expectations for the cross-country trails but the profit margin is so small it’s not a priority for them. When the weather is challenging (that’s ski resort speak for “when it rains”) grooming requires more resources so everything is shifted to get the alpine trails groomed, and cross country trails suffer from it.
So what do you do? Offer him a refund? Apologize and explain about the weather challenges? Tell him he isn’t an important customer and the focus on grooming last night was on the more profitable alpine skier?
That last comment wasn’t really part of our discussion, but it crossed my mind later as I thought about it more.
My advice? Get out of the business if you can’t service it well and provide an exceptional experience. If you aren’t able to support each segment in your company with the resources required, then you shouldn’t be in the business.
Let someone else operate it or eliminate it from your product offering.
In the age of the long tail, we talk a lot about focus. We fire clients who aren’t profitable, and are a drag on our time and resources. We narrow our target markets so we can be experts in one thing. The same should go for product lines. Spin off products and services in which you are not passionate, don’t have the expertise, or aren’t as profitable.
You can’t exactly eliminate cross-country ski trails at a ski resort, so why not lease it out to someone with lower overhead, someone with the expertise and passion for the business?
Let’s stick with the ski industry theme here: Why do you think the food is usually so lame in ski lodges? Because it’s not their core business. It’s a needed service, but not a focus. So visitors suffer hockey puck-like cheeseburgers and cold fries for lunch, or they brown bag it (zero revenue for the ski resort now). Customers cope with it because the skiing sure is awesome, isn’t it?
The husband is a chef, and the wife is the happiest woman alive, and it shows because she’s working the room of happy skiers, on top of a ski mountain with views in every direction. She has ownership in the restaurant, the food cost isn’t the end all, be all, and it means everything to her that you have a memorable time.
I was there a few years ago and it increased my customer experience tenfold. You know why? Because the skiing sucked that day. But I remember it as a great one because I had fun with my friends eating fondue and drinking German beer at the summit. That’s a win for Panorama.
Where is the drag on your profits, time, and effort? What is the cross-country ski segment of your business model?