Entrepreneur Life Lessons: Never Cheat Your Customers -- Ever

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Recently, the girlfriend and I went to a local cafe to grab a light snack before lunch. It was a sunny Saturday in Toronto, Canada, and we were enjoying some together time on the weekend.

We saw a quaint looking coffee shop -- The Grind Cafe -- in the underground at Toronto’s busiest intersection – Yonge and Bloor streets.

The gourmet tea selection won us over, and we each picked one to try, along with a puff pastry filled with cheese and other yummy stuff.

The cost for our light snack came to $11.42.

The barista behind the counter asked for $11.45.

With the elimination of one-cent from Canadian currency, the federal government has implemented guidelines for business owners in rounding to the next whole cent.

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According to their guidelines, $11.42 should be rounded down to $11.40 – NOT up to $11.45. Actually, it’s also basic elementary school math – round up for numbers ending in five or higher, and down for everything else.

“It’s only three cents,” protested the man behind the counter when we politely reminded him of his error.

Yes, it is only three lonely cents, however that’s not the point. You don’t reject your customer’s objection, you should politely answer it – even if you’re wrong – because picking a fight with a customer just isn’t good business.

We paid the extra three cents, though as we sat in the lovely cafe, sipping on our teas, the experience just wasn’t as cozy as we had hoped.

Great customer service makes people swoon, and want more – horrible customer service makes you want to head for the exit and never look back.

As we exited the cafe, we strolled past a Shopper’s Drug Mart – one of the largest chain of pharmacies in Canada, owned by the Weston Family (they own Loblaws grocery stores and the President’s Choice, and No Name labels of products).

We needed a few items we know we’d find there, so we went in.

“Do you need a bag for that?” the person behind the counter asked, as we were at the check out.

We did, which she proceeded to charge us five cents for.

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In 2009, the City of Toronto implemented a poorly executed by-law, requiring retailers to charge five cents for every plastic bag given to a customer. It was poorly implemented, because it wasn’t enforced, nor was it ever really clear where that nickel per bag was going.

The city claims it was being put into an environmental fund, to promote environmental practices and keep the city clean. However, as it was up to each retailer to manage the collection and distribution of the funds, most of those fees just went back into the pockets of greedy retailers looking to make a buck.

The original intent of the five cent fee was to reduce plastic bag use, in favor of reusable cloth bags.

In 2013, under Toronto Mayor Rob Ford, he killed the five cent per plastic fee, however, because it never was managed well, the city didn’t end the program well either, leaving it in the hands of greedy retailers.

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If the city really wanted to reduce or eliminate plastic bags from the city’s landfill, they should have banned them outright – which they eventually did – however the plastics industry sued and the city quietly cancelled their ban in 2013.

So, now wherever you go in Toronto – and even in the areas surrounding it – you never know if you the customer will get dinged an extra five cents for giving someone your business.

“Where does the five cents go?” I ask the kid behind the counter at the Shoppers Drug Mart.

“I dunno, probably somewhere good,” she says.

Yes, it probably lines the pockets of the executives running Canada’s largest pharmacy-retail chain.

Although charging for plastic bags does reduce their use – a City of Toronto report claims a 53 percent drop in 2012 over the three years since the five-cent fee was initiated – that’s a drop of 215 million plastic bags – the money collected for an environmental initiative shouldn’t be used as a revenue stream off the backs of customers.

Never lie to a customer, because if and when you get caught, you’ll never see that customer again. And worse, using a social cause (such as environmentalism) as a way to make money is the ultimate way to cheat your customer.

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This got us thinking about our earlier experience with the Grind Cafe. We figured, if that store wrongly rounds up it’s prices for everyone, then that three-cents quickly adds up, giving them an additional revenue stream. For every 20 customers wrongly rounded up, that’s about a dollar in profits. That adds up day-in, day-out.

However, again, you never want to cheat your customers, because that’s not a great way to keep them coming back.

Numerous studies prove it’s a lot easier to please and retain customers, than to pay for marketing and advertising to acquire new ones, some going so far to say it costs between four to ten percent more to acquire new costumers.

So you never want to do anything – anything – which could cost you a customer, especially cheat them out of their hard earned money, such as the examples used above.

There are great retailers that don’t round up – when they should round down – and that don’t nickel and dime their customers over a plastic bag. Or those that do charge for plastic bags honestly, inform and educate their staff as to where those funds are actually going, rather than “somewhere good,” which in business, just doesn’t cut it.

What’s the entrepreneurial lesson here?

Simple.

Be honest with your customers unless you want them to feel cheated, lied too, and that something just isn’t right.

Because once your customer feels that something just isn’t right, they stop being your customer. And you never want anyone once willing to pay for whatever you sell, to stop paying for what you sell – ever.

Having Trouble Keeping Customers? Maybe You’re Not Giving Them What You’re Selling Them

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Computer programmers know all too well what “vapourware” is.

Vapourware, is when the sales guys get so caught up in the sale, they tell a potential customer that your software product does “X” – when in fact, it doesn’t.

“X” is something that particular customer has always wanted done.

So, naturally, they buy.

Next day, the head programmer is freaking out, because he’s been told to make the software product do “X” within an unreasonably short amount of time.

Because software development usually takes more time than less, the sales guys keep stalling the new customer, to buy time for the developers to create the feature which never existed in the first place.

Hence the term, “vapourware” because the software to do “X” never existed before – but was sold as if it was.

Vapourware occurs in all industries and sectors, not just ones based on software.

Anytime a company makes a claim about their products or services which is NOT true – that’s a form of vapourware.

For the company, it’s a seemingly great way to steal customers from the competition.

Internet Service Providers are a great example of this – each one promises faster, more reliable service than their competition.

The second they have a disruption in their service, which causes a massive slowdown or shutdown, all those customers that were falsely promised faster, more reliable service, call to complain.

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It’s why so many of us have jumped back and forth from one Internet Service Provider to another, and even back again.

Why?

There is a misconception in business, that constantly bringing in new customers sustains a business. This misconception starts at the top, and flows down throughout all levels of a business.

When this misconception reaches the marketing and sales teams, they figure they can say or do anything to convince a potential customer to become a new customer, because it's the new customers which sustain the business.

Why is that a misconception?

Here are the latest stats from some of the business world’s best sources:

1.     A customer is four times more likely to defect to a competitor if the problem is service-related than price- or product-related – Bain & Company.

2.     The probability of selling to an existing customer is 60% to 70%. The probability of selling to a new prospect is 5% to 20% -- Marketing Metrics.

3.     For every customer complaint there are 26 other unhappy customers who have remained silent – Lee Resource.

4.     96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1Financial Training services.

5.     A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. – White House Office of Consumer Affairs.

6.     70% of buying experiences are based on how the customer feels they are being treated – McKinsey.

7.     55% of customers would pay extra to guarantee a better service – Defaqto research.

8.     It takes 12 positive experiences to make up for one unresolved negative experience –“Understanding Customers” by Ruby Newell-Legner.

9.     A 5% reduction in the customer defection rate can increase profits by 5% to 95% – Bain & Company.

10.  It costs 6 to 7 times more to acquire a new customer than to retain an existing one – Bain & Company.

So what can we learn from this?

Constantly bringing in new customers is important to any business, however, it is far more important to take care of your current customers, because keeping them happy is what drives your business.

What’s all this have to do with “vapourware” and selling products and services that don’t exist?

It’s the broken promises we make to our customers which cause the biggest headaches, and lead to the highest customer turn-over.

Sell your customers on the Sun, the Moon and everything in between, but if you can’t deliver that, then when they find out – and they always find out – that customer will drop you like a hot potato.

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Leaving you with one less customer – or a hundred, or a thousand, or even a million fewer customers – because the more you promise but don’t deliver, the quicker your customers will come and go.

Like a revolving door of customers.

Consider this, there is a high end coffee shop in one of the poorest parts of Toronto. They sell exceptional coffees, lattes, teas, fancy drinks and gourmet baked goods, at high-end prices. They provide up-scale service too – if you get anything from them that’s not just right, they’ll immediately take it back and replace it free, without any questions. Your satisfaction is their top priority.

Yet, this high end coffee shop, is in one of the poorest areas Toronto.

How do they stay in business?

The people in the area can’t afford a $5 cup of coffee every day.

The answer – they have regular, repeat customers. The coffee shop has been in business over twenty years, and over that time, has built a large following of people that will come from all over the city, to munch on a $4 cookie, while sipping a $5 hot caffeinated beverage.

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Years ago, the area was more prosperous, and those living there were well to do. As the neighborhood changed, the wealthy customers left the neighborhood.

Had this coffee shop relied on attracting new customers to sustain itself, it would have gone out of business a long time ago. However, they've constantly delivered what they promised – exceptional foods, drinks and service.

So their customers keep coming back. Despite no longer living or working in the area.

Do you tell your customers one thing, but deliver another?

Do you have issues retaining customers?

Perhaps you should look at your products and services, to make sure they deliver what you are telling your customers they deliver.

Because it’s easier to keep current customers, rather than replace them with new ones.

Want to Run a Successful Business? Be There for Your Customers

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Just this weekend, the girlfriend and I were discussing where we wanted to go for dinner. We had a pleasant day out and about, and wanted to close it out with a nice big meal.

Problem – it was about 10:30pm.

I figured we could go to a local bar – part of a chain of bars – and grab a nice meal. Bars are open late, especially on a Saturday night. It’s date night – Saturday night.

I called the bar to double check.

“Sorry, the kitchen is already closing, but we’re open for another hour,” said the voice on the phone.

What? Closing before last call? Last call here is not until 1:30am.

We called around to a bunch of places, bars, restaurants – most were already closed, or closing.

Finally, we ended up going to Pizza Hut. Pizza places are always open.

Not the most romantic dinner for two, but still a very enjoyable experience. Good food, prompt service, and they were there when we needed them.

Perhaps it is the never-ending recession we’ve been in, but I remember a time when restaurants and bars were open late on Friday and Saturday nights, because those were the night's people went out.

All the places we called previously lost our business, simply because they weren’t open.

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Want to run a successful business, here’s a tip – be there for your customers.

It’s not rocket science, just be there when your customers are most likely to be looking for you.

This goes for ALL companies, big and small alike. You don’t have to be on call 24-seven, just be there when your customers are most likely to be.

That’s it.

Nothing complex.

No fancy, deep thinking, mind blowing strategy.

Just be open for business when your customers are in need of your services.

You’d think bars, restaurants and clubs would be open until the wee hours of the morning on Friday and Saturday nights.

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When I was a kid in university, Thursday night was bar night – and nothing ever closed until last call.

I'd like to think I'm not THAT old, and times haven't changed that much that people don't go out anymore.

And it's not like we were in a third-world country, or living in the back woods of a small town either.

My girlfriend and I were shocked and bewildered by the lack of places to grab a nice meal and some drinks in one of the largest and most cosmopolitan cities of the world – Toronto.

Toronto, is like New York -- only smaller, cleaner and safer. 

No, it wasn’t busy in the Pizza Hut. But it wasn’t deathly quiet either – there were a couple of young families with their kids, some teenagers, and us.

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When you’re in business, any business is good business.

So it pays to be there for your customers.

Sure, have a skeleton staff, close off a section, or even tell customers that you might take a little longer to get something done, because it’s late.

That’s fine – we’ll understand.

Just don’t leave us stranded with nowhere to go.

That’s far worse customer service than not being there at all.

Because if you want to run a successful business, you have to be there for your customers.

ATTACKED! How a Drunken Stoned Homeless Man and a Job Seeker Made My Week Hell

I’m certainly glad last week is history, because it was a hell of a week – or rather a week of hell.

It started off well, the usual business of running a business. But towards the end of the week, I was lucky to get out with my life.

Thursday evening I was in the poor, rundown, Yonge and College street area of Toronto for the Wildsound Film Festival. It’s a great little unknown gem of a film fest, where five to six independently produced short films from around the world are shown in one night, and everyone attending gets to participate in the discussions about the films.

In keeping with the ambiance of the magic of movie making, the Wildsound Film Festival takes place in one of the oldest movie houses in Toronto – the Carlton Cinemas. It’s a historic building, one of the first movie theatres in the city, and it’s got a lot of amazing character, with much of it’s original architectural wooden rustic design and charm.

There are also historic movie posters, and wonderful works of art by local artists on display, reminding you of what it was like to watch a movie before the megaplexes of today, with their raked cinema seating, and sticky soda-pop-soaked floors.

Although the theatre shines as a beacon from a time long since gone, when going to the movies was an event, not just another night out, the surrounding neighborhood has become an urban slum.

There are always homeless people lying on the sewer grates and pan-handling passersby from just about every corner, as the crumbling infrastructure of low income subsidized apartments crashes into the skyline of the modernized recently built condos, both fighting for their equal space in a city with a hidden reality.

It’s a sad silent reality sweeping across Canada’s largest city – wealthy building and construction firms buy entire city blocks, while their executives “donate” to politician’s political campaigns, so that their requests to demolish the older, rental units and put up luxurious high-rise condos get passed.

Sure, residents of the rental units get first dibs on the new condos which replace their rental apartments – but think about it – if you could afford to buy a condo – wouldn’t you already be living in a condo? Those who rent can’t afford to buy, and so they end up being tossed out of their homes, so some greedy land developer can make a mint off of their prime real estate.

This problem gets worse, as the numbers of rental units falls, due to the increase in condos built.

As this sad silent reality has been going on for some time, the numbers of people homeless in Toronto has skyrocketed.

And that’s very evident from the horrors which I experienced last Thursday, as we stopped into a local McDonald’s to grab a quick bite before the film festival.

We were standing in line, undecided what to eat. So when our turn came in line, we did a Canadian thing, and politely let the person behind us go ahead, while we continued to ponder over the menu.

The person behind us thanked us, and practically fell over us, barely able to keep steady on his own two feet.

He was a black man, with scruffy dark hair, in jeans and a red jacket, dancing to some unheard beat in his own head. Though he wasn’t wearing earphones, and by his loud and vulgar language when he placed his order, indicated he wasn’t all there.

He acted like someone who feasted upon a recipe of drugs, booze, and who knows what else. And he continued to make a scene as he paid for his burger and fries entirely out of coins, probably from what he managed to cobble together from begging.

With his tray of greasy fast food, he went over to the condiments section, and took massive amounts of napkins, straws, and other things. Mumbling to himself, while dancing to the songs in his drug induced mind.

He freaked out those around him, and was repeatedly told by the staff to take a seat.

Eventually he did, right next to our table.

We quickly got up and moved to another table.

Usually, dinners out, even at a fast food restaurant, are times for enjoyable chit-chat. My poor girlfriend was so scared, she was wolfing down her burger and fries like it was her last meal.

I kept trying to re-assure her everything would be alright.

Then, the homeless druggy came over to our table, put his hand on my back, and thanked me for letting him ahead of us.

My girlfriend bolted to the door, and I tried to escape too – saying it wasn’t a big deal.

He wouldn’t take his arm off my back, despite me trying to get up. He told me he was homeless, and asked me if I had any change.

I told him I didn’t.

He didn’t believe me, said how hard it was to be on the street.

I took out my wallet, and showed him how empty it was – just the usual plastic.

He started pointing to my change compartment of my wallet, saying how that didn’t look empty. And that’s when I just got up, leaving whatever food I hadn’t eaten, and joined my girlfriend who was now almost on the other block outside.

She was shaking like I’ve never seen before. She grabbed hold of me, and pulled me with her, as her flight of fright took her in an almost run anywhere but near that crazy homeless man.

Eventually I managed to calm her down, and we made our way to the theatre and had a great time, sinking into the world of short films, and the engaging discussions.

But I’ll never forget the horrors of the homeless, especially as they scared the hell out of both of us.

And that wasn’t the end of my week of hell.

The next day, I met with a woman, probably in her twenties or early thirties, about a job. She was seeking employment, and we are looking for account managers to handle our advertising sales clients.

Her resume was interesting and read of someone with experience in the marketing world. Her initial attitude and interest caught my eye during our phone interview, and I thought she could apply her background to our advertising sales team.

However, all that changed when I met Seema Doad in person, and she gave me the third degree, challenging my company’s business model.

Hold on a sec . . . Seema, YOU are the one seeking employment from me, and yet YOU are challenging my company’s vision and direction?

Perhaps she was having a bad day and just unleashed her frustrations on the first person in her path?

Being an open, honest, and good-natured person, I attempted to answer her questions, but Seema Doad wouldn’t accept my answers, continuing to argue with me over my corporate vision, our business strategies and although she hadn’t any knowledge of our business plan, she continued to tell me it couldn’t be done.

I don’t want people to kiss my butt – I hate that – but I do expect anyone we hire to believe in our vision, our direction and to especially be respectful of everyone.

Seema, you don't believe in our vision, nor in our direction – and you certainly were not respectful of anyone in our meeting, arguing with the very person who could have offered you a real job.

And that's the kicker, because we always hear how employers force job candidates to do outrageous things to get a job. All I did, as the potential employer, was try to answer your questions, which you tossed back at me, in an angry hostile and very demeaning manner.

Although Seema, you may be in luck, I did see a “Help Wanted” sign in the window of that McDonald’s where the drunken drugged out homeless dude frequents. Just remember if you go off on one of your rants, to ask: “do you want fries with that?”

On the Entrepreneurial Journey -- Choose Your Advisors Carefully

Billy Mays, one of the most popular
TV Pitchmen ever.

I was at the Business, Franchise and Investment Expo in Toronto this weekend, at the Canadian National Exhibition grounds.

It's a two-day affair, where franchises hunt for franchisees, and business people can network and possibly gain some valuable tips and tricks towards success.

What I was interested in were some of the over 40 workshops on entrepreneurship, running and managing a business, even on investments and investment opportunities.

I wasn't there to become a slave to a franchised company. Not everyone is capable of grabbing the bull by the proverbial horns and being completely 110 percent their own boss, I get that. However, being a franchisee isn't for me.

When we first walked into the expo, a sign right at the entrance boldly warned people that selling anything was prohibited at the show. Violation would get you kicked out.

I didn't think anything of it at the time -- I was there for information, not a sales pitch.

What I got, although inspiring and even entertaining, were pure sales pitches.

The first workshop I sat in on was titled: "Learn What Every Small Business Owner Should Know About Marketing on a Zero Budget."

Marketing on a zero budget? Marketing is one of the key expendables of any business period. If no one knows you exist, you don't. So I was curious and went to the workshop, hosted by one of the keynote speakers of the show, Paul Tobey.

Tobey told a very inspiring story about hitting rock bottom, when he was so broke he couldn't even give a handful of change to a boy scout selling apples.

He then went on to describe how that experience changed his life, and he's since made it his mission to help others achieve the great fiscal success he says he has.

Then he offered to speak with 10 people -- and 10 people only -- for a brief amount of time at the show, for free!

Imagine, being able to talk with someone about their success and how they may be able to help you for free.

Reminds me of when comedian turned actor, Robin Williams was in Toronto a while back, and you could purchase a five minute one-on-one session with him after the stand-up show for $500. That's $100 per minute for you mathematically challenged-types, just to say hello, maybe introduce yourself and hear him do some of his uncanny impersonations, and hilarious jokes.

Although Tobey says he wasn't selling anything, he was the consummate pitchman. Show how green the grass is on the other side, and tell people how it could be theirs -- for a price.

In Tobey's case, he was selling tickets to another event where motivational speakers such as himself, were going to be. Naturally they were offering these "limited quantity" tickets at a special show price -- buy one get one free.

Would you buy a car from this man?

I still don't know how to market my business without any dollars -- that too me just sounds like poor budgeting.

Later, another workshop caught my eye -- "10 Keys to Taking Your Business Over $1 Million," hosted by Doug Vermeeren.

Vermeeren is another amazingly inspirational speaker, talking about his rags to riches story, and he handed out lots of free books and CDs which continued his inspirational message.

But at the end of his talk, he handed out carbon-forms to subscribe to his inspirational service -- but don't worry, your first month was free -- even though you have to give your credit card number on the form to sign-up, and sign a waiver authorising his company to charge your credit card forever thereafter the free month.

I guess that sign prohibiting people from selling anything at the front of the expo was pretty meaningless, because everywhere I went there was pitch after pitch.

One young woman came up to me while I was sitting at  table resting my weary feet after a long day, and tried to convince me that her business of purchasing a condo with the purpose to grow medical Marijuana in was a good idea.

What was she smoking?

Ironically, the best information I took away from this conference was given by yet another one of these supposed self-made millionaires selling advice: "be very careful who you take advice from."

That's actually really good advice -- just because someone appears successful, talks like someone who is successful, even inspires you with their slick spiel -- doesn't mean they know anything about you and your entrepreneurial journey.

Paying someone just because they think they've made it to advise you, is like buying the first car you test drive without looking under the hood. You'll probably end up at the side of the road in a pissing rain storm, waiting for roadside assistance.

Lesson learned, the best advice in the world is usually free, has no strings attached, and comes from people that know you.

Tobey, Vermeeren and the rest were inspiring, energizing and I'm glad I had the opportunity to sit in and hear them.

However, inspiration is only part of the journey towards success. The rest depends largely on acting on that inspiration.

And just as the old song says, the best advice is free.