Twenty Nickels
If you save twenty nickels, you’ve made a dollar
by
Raymond Matkowsky
www.datastats.com
email: rdm@datastats.com
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Issue 3-11 March 2011
Are You Really Saving Money?
by
Raymond Matkowsky
With the coming of Spring many of us start thinking about greening up our property. This starts with the fertilization of our lawn. I want to relate a story about my experinces with the lawn care of my property and how it has business implications for you.
My property has roughly between 9,000 and 10,000 square feet of grass. In the past I have purchase the same brand of fertilizer for 33 years without any second thoughts. In the beginning, I normally bought a 40 pound bag that would cover about 15,000 square feet. This would always leave some to be stored. However, I found that once the bag was openned shelf life was not very good and result in a lot of wasted product. So instead I began purchasing two 5,000 square foot bags that would leave only a small amount.
As the summers proceeded, I began to notice that two bags would barely do. As time went by two bags would only cover about 3/4 of my property. The bags still said "5,000 Square Feet", but they didn't cover 5,000 square feet. I would be forced into buying a third bag to finish the job. This left me in the same position I started in: large wastes.
During a visit to a horticultural center, I discovered an old bag mixed in with new bags of fertilizer. Low and behold the weights were different even thought both bags stated a "5,000 square foot" coverage. The old bag weighed a pound and a half more than the newer bags.
The company had been reducing the weight of their product and evidently my experience had suggested this has been going on for a long time.
With this discovery, I started looking at other vendors. I found several that had more weight in a 5,000 square foot bag and cheaper by a few dollars to boot!
I do not buy on price alone. I do not recommend that anyone should buy on price alone. You should buy on value! A side by side test of the products showed no discernable differences. The upshot: A company that had my business for 33 years lost it.
What does this say for your business?
First of all, make sure reducing your product size (or cutting a program or cancelling amenities) will actually save you money in the long run. In my opinion, reducing size is a lose-lose proposition. You can only reduce so much before you must raise your price and at that point the customer will question the value of your product.
If you do reduce size, make sure your packaging reflects all aspects of that change. If there is a valid reason for your claims say so clearly. Otherwise the customer may question your company's integrity.
Finally remember that you will always have competitors that will use any advantage over you that they can find. Don't give them one on a silver platter!
You have to ask yourself "Am I saving money or just helping my competitor gain market share?"
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A Call For Reader Input
We at Data Stats would like to see this newsletter become a reader supported forum for help questions, answers, or general comments on anything appearing in this newsletter or Data Stats’ website. If you have a question, answer, or comment to contribute send them to me at newsletter@datastats.com. I will try to publish it here.
If you have an urgent question to ask, you don't have to wait for our newsletter to come out. We will try to find you a reader or one of our experts that may be able to help you. So, if you have a question, comment, or think that you can be of help, send us an email at once to: newsletter@datastats.com.
Also, in your email, please let us know if we have permission to share your email address with experts that may be able to exchange ideas with you directly.
Raymond D. Matkowsky
Copyright © 2011 Raymond D. Matkowsky
Data Stats
P.O Box 672
Old Bridge, New Jersey 08857-0672
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