Sunday, July 12, 2009

Profit is NOT your #1 priority

Why are some business decision makers so oblivious to some things that are so obvious to the customer? My wife and I Went out to see a movie the other night. At Galaxy (Cineplex / Canada) theaters, and probably like any theatre, the signing above the concession stand shows various "combos" (i.e.: lg popcorn & sm drink, 2 lg popcorn & 1 lg drink, etc). However, something was different. The signing did not show any of the usual abhorrently high prices, but only listed what I could save on the combo, save $1, $1.50 etc. Save $1… off … what, how much is it? I couldn't find the price on any combo – only how much I would save (and that's funny – save money on the purchase of popcorn at a movie theatre – that is oxymoronic). I ask people around me in the line – they don't know either.

They [business decision makers @ Galaxy] have removed the total combo price from the sign – most likely because customers have complained about the horrifically high prices. Now the customer does not find out how much they are going to pay until they have stood in line for 10 minutes and they likely won't leave without spending. In order to figure out how much you have to pay, you will have to add up the price of each individual item in the combo – which are listed somewhere else in near bottom-line-eye-chart-font. The prices are not nice round even numbers and I didn't bring a calculator. Yeah, I could have added them in my head, but I didn't come to the movies to think – I came to relax. Please keep that previous admission in mind as I explain the next point. It was during this mental exercise in theatre combo decoding that I realized: You don't have to buy a combo! You can actually just buy what you want. The combo signs had me convinced, for years, that there were only four choices and I had to pick one of them. I never wanted the candy item that typically comes with a combo, but my thinking (or lack of) was; it must be cheaper overall if I get the combo. It's not. It never occurred to me that I could just get a bag of popcorn, or a drink – separately. I ended up only getting what I wanted (not the extra bag on candy for $3.50 that I don't want) and spent less at the concession stand than I ever had.

I expect that this organization had received some heat from customers on their inflated and infinitely increasing prices. In response, they decide to try to deceive people with some ambiguous signing and trick them into continuing to pay those high prices. If this organization's focus was on providing customers with a premium movie going experience as their corporate strategy suggests, they may have made different choices.

Instead of driving the public to "wait until it comes out on DVD" with increasing prices, they could try a different strategy. Lower the prices as an understanding to the recessionary realization. Reduce the average time per sale at the concession by a minimum of 50% (really, how many buttons on that cash register have to be pushed to sell some popcorn – they are not launching the space shuttle, and couldn't there be one runner in the background fetching the popcorn). Finally, as a side note, why am I paying all that money to watch 20 minutes of advertising? Once the movie finally started, my wife whispers in jest, "I can't even remember what movie we came to see."

This is a typical case of a company forgetting their purpose; the reason that they exist. Hint for [business decision makers @ Galaxy]: It is not just to make money – read your website – the answer is there. If profit supersedes everything else in a business – it is the beginning of the end.

With DVD, high definition TVs and surround sound systems, the experience of watching a movie at home is very comparable to the theatre. Making going to the movies more affordable, reducing the time consumption and simplifying the experience would leave only one hurdle for theatres to overcome. How do you compete with the ability to pause the movie to go to the washroom?

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