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  July 6, 2012
Strike Three...You’re Out!

 


Last Saturday afternoon, I received a phone call from my friend Jeff... 

He explained that his company has season tickets to the San Diego Padres and that the customer he was planning to take to the game Sunday had just backed out.

"I have an extra ticket if you want to join me", he offered.

I do like baseball... but the real reason I said yes was because I hadn’t seen Jeff in about six months.  I thought that the opportunity to spend some quality time catching up with a good friend was a fantastic way to spend my Sunday afternoon.

The weather the following day was perfect for an afternoon baseball game.  Not a cloud in the sky and a slight cooling breeze off the ocean.

We agreed to meet at a local pub in downtown San Diego to have some lunch before game time. 

After lunch we walked over to the ballpark and found our seats plenty of time before play began. 

As the San Diego Padres players were announced, I couldn’t help but think to myself that I had no idea who these players were.  I considered myself a fan of the team but many of my favorite players had been traded or released to save money and reduce payroll expenses.  I now only recognized one name as a player who was a regular starter but one year ago. 

Despite a relatively new stadium, perfect weather, a new lucrative TV contract, and playing in the sixth largest populated cities in America, the Padres’ payroll expenses ranked a paltry 30th out of 30 teams.  They were currently in last place in their division with the second worst record in the entire major leagues.

This particular day, the Padres were playing their division rivals, the San Francisco Giants.  In contrast to the Padres team, the Giants hosted a lineup that consisted of seasoned veterans, top prospects and perennial all-stars.  Their payroll ranked in the upper 25% of teams and they were currently in first place in their division.  They are perennial contenders and have a rabid fan base who support their team.

On that day, Giants fans appeared to outnumber Padres fans four to one... this in the San Diego team’s home park!

As the away team, the Giants batted first.  The young Padres pitcher walked the first two batters of the game and gave up a home run to the third and fourth batters.  The home team was down 4-0 while fans were still finding their seats.

The game progressed with the Giants playing good solid defense and providing timely hitting while the Padres committed several errors in the field and left several men in scoring position.

At the end of the game, the score was 8-1 in favor of the visitors.  The Padres had a low-budget team and it showed.

My ultimate reason for being at the game was to enjoy the day with my friend, win or lose, but I couldn’t help but feel embarrassment for the team being fielded by San Diego that day. 

The Padres organization has cheapened their product to a point where very few people are interested in buying it anymore.  Their primary concern is no longer about putting out a quality product but rather keeping their expenses at a minimum.

The organization has revenue sources but they refuse to spend it on bettering their product. Despite the new ball park and great weather, they are quickly losing their fan support.  Their pursuit of short-term profits has driven current and potential customers to seek other homes for their entertainment dollars.

I couldn’t help but think to myself, as I drove home that afternoon, about other companies who have decided to go the cheap route.  Their pursuit of short-term profits have quickly watered down the brand that has taken, in many cases, generations to establish. 

Brand loyalty comes from trust.  Trust that the product and/or service will meet or exceed our expectations in terms of quality, consistency, performance, and service levels.

I happened to be shopping at Costco the other day. 

While on my way back to the food section, I noticed a sign that advertised Calvin Klein polo shirts for $14.98 each.  I thought that this was clearly a misprint so I went over to the display table and picked up a shirt. 

The first thing I noticed was how thin the material was.  I then notice how the stitching was uneven and how loose threads were abundant.  The shirt I was holding should have been priced at $14.98.  It was made cheap and it looked cheap.

Calvin Klein has broken the trust that has taken decades to establish.  It sold its soul for mass-market short-term profits.

There are countless multitudes of other companies who have done exactly the same thing as the San Diego Padres and Calvin Klein. 

They have traded their good brand name in exchange for short-term profits.  Times are indeed tough, but this is no time to start alienating long-time customers by providing cheap products and/or services.
  
Certain companies have resisted the temptation to cheapen their brands... I can’t remember ever seeing a cheap Mercedes or not being able to return an item to Nordstrom’s or having a tough steak at Morton’s.

Now mind you, there is nothing wrong with looking for good value.  There is a world of difference finding a high quality product on sale and buying a cheaply made product at a low price.

There are some companies who have adopted a tiered approach with a different product offering for those customers looking for varying degrees of quality.

Marriott hotels, for example, offer low-cost options (Fairfield Inn / Springfield Suites) for those traveling on a budget, medium-cost options perhaps for business travelers (Courtyard / Renaissance) and high-end options for luxury travelers (Ritz Carlton / JW Marriott).  The service levels and amenities are consummate with the particular value level of each hotel.  At no time however, are certain minimum standards compromised... even at the lowest levels.  This would jeopardize the good name that Marriott has sought to create over the many years.

When it comes to brand loyalty, cheap never wins over value.

This is a principle that more companies and people need to remember in a time where every penny counts and where the barriers of entry for competition are being lowered each and every day.

The season is over for those who choose short-term profits over long-term customer loyalty.

Quality never compromises.

Thank you very much for your support of OptiFuse where we will never compromise in trying to find better ways to service our customers.


Jim Kalb
President
jimk@optifuse.com
www.optifuse.com

www.optifuse.blogspot.com (blog archive)


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