One of our busy local restaurants has been implementing a number of cost saving measures in order to eliminate what they perceive as dispensable expenses. Their latest idea has seen all EFTPOS and credit card facilities removed, requiring customers to pay cash only, thus saving them fees on the EFTPOS terminal and their credit card merchant facilities. If you don’t have enough spare cash on hand to pay your food bill, they have a non-bank ATM outside their door which you can use for a $2 fee.
In the grand scheme of things, a busy restaurant like this is not going to save a huge amount of money with this cost cutting idea, especially when you compare the savings to their good income levels. However, this scheme may in fact cost them business in the long run.
What is starting to happen is that people are thinking twice about eating there, particularly if they don’t carry enough cash on them or they are paying for a family or group. Not only are they then inconvenienced with using the ATM outside the door to get money to pay their bill, but they are being slugged $2 to do so.
The actions of this restaurant might save a small amount of money in the short term, but it is unlikely to off-set the business they lose by imposing such a restrictive scheme that is guaranteed to alienate some of their customers.
The are many examples of other businesses adopting harsh cost-cutting schemes. You only need to look at some budget airlines that charge you fees well in excess of their actual expenses if you pay your fare by credit card. Then there are those airlines that make you pay a hefty surcharge to select your seat at booking time rather than when checking in at the airport, which surely can’t make any more work for them, but is simply used as a method of raising additional revenue at no cost.
When you look at our website advertising rates, you could well be forgiven for thinking that Travel Victoria is also a low-cost, penny-pinching operation, intent on slashing to the bone any expenses and trying to extract the most money out of our clients. In fact, we are quite the opposite, as we know that the best way to alienate your clients is to hit them with additional fees and charges on top of what they expect to pay.
- We do not charge fees to pay accounts by credit card.
- We do not charge a fee to have renewal invoices printed and posted out rather than emailed.
- We do not charge fees to update any advertisement with us. We make updates for our clients as often as they like, at no cost.
- We use one of Australia’s fastest and most reliable web hosting providers on their highest level of service plan, thus paying a premium cost to ensure any business listed with us has the best web presence possible.
- We do not outsource any work related to running Travel Victoria to people or organisations outside of Australia in order to cut costs. Everything is done locally.
It can be quite easy to identify areas where your business can save money. However, it is very important to keep in mind that the effect of implementing such savings could actually drive customers away, thus costing you significantly more than the actual savings you make in the long run.
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