Sixty Four Percent Gross Profit, Not Bad for Crap Service.

Wolfgang is a service company and we work hard to deliver. We make mistakes but for the most part we provide solid service. It takes big time commitment, hard work, patience and a thick skin to consistently please customers. Delivering great customer service is rewarding and tiring at the same time. But, if you don’t enjoy helping your customers, if you don’t want to make a difference with your business, get out of business.

So, when I experience poor customer service from another company, it bugs me.

I had my snow tires installed the other day. I usually go to Kal Tire (great company, amazing service) but this time, unfortunately, I was pressed for time so I ended up at their main competitors.

I walked through the door and I was greeted with a gruff “You need to move your car”. Not, “Hello” or “Welcome” or “How can I help you?” just “You need to move your car”. I moved my car, re-entered the office and said, “Hi, I need my snow tires installed” to which the attendant, who happens to be the owner, stated “Can’t help you until Friday”. OK?

I explained that I was leaving town so I wanted to leave the car to pick up at a later date. The attendant responded, “You need to park the car down the street and bring the keys back to me”. What the hell? “You have five guys in the bays can’t they move the car for me?” I said, “Too busy” was his reply.

I had a plane to catch and didn’t have time to argue, so I moved the car again and brought the keys back.

I was charged $110 for the job. It probably took one hour. Peg labor at forty per hour. With no other variable costs, the shop made seventy dollars gross profit. Sixty four percent gross profit margin, not bad for crap service.

Two weeks later my wife and I travelled to Whistler to celebrate our ten-year anniversary. We stayed at the Four Seasons. The staff was all smiles all the time, our room was cleaned three times a day, they shuttled us back and forth from the village, provided complimentary champagne and chocolates for our anniversary, the staff greeted us by name every time we walked by reception. In short, the service was over the top! What a pleasure.

We paid less than two hundred per night! Do you think the four seasons made a sixty four percent margin? Not a chance. I doubt that they broke-even on the room. Of course, the hotel made money on the dining and additional activities that we took part in. The overall experience was so exceptional that we were happy to pay “rack rate” for the add ons.

So, one company makes a large margin and alienates a potential long term client in the process. The other company uses a loss leader, delivers unbelievable service and works hard to close additional high margin sales.

Guess who wins in the end? Guess who gets a repeat client?