I got a leaflet the other day from a famous bank where the Executive Director (sic) is dispensing his advice. He suggested that “businesses of all sizes can benefit from using technology as a way of making customers feel valued, such as using new media as a way of responding promptly….”. I wonder if this senior executive has heard about the story of Rachel Brown. Mrs Brown is running a small business making cupcakes. She got suckered in to doing a voucher scheme with one of the new media companies. The idea was to discount her normal price and sell via the voucher scheme. The problem was that the scheme was successful and about 100,000 cupcake orders came in. In order to fulfil the orders Mrs Brown had to employ more staff. The problem then was that the price of the voucher scheme for a dozen cupcakes was agreed at £6.50 with £4.00 going to the voucher/online company for their marketing efforts. The result was obvious; the margin was too thin to cover the additional expense. Our enterprising business woman lost an awful lot of money. I wonder whether her bank manager considered all the implications before dispensing marketing advice?
Did you receive any business advice from a bank manager which turned out to be a little absurd? Please let me know.