…Is going to increase its sales by forcing people to drink up and go. Still, it will lose the customer experience and destroy their relationship with some of the long-time customers. Like me!

My local cafe, which just happens to be a Costa Coffee and one of the very few in this area of Beijing, has made a strategic choice. An incorrect strategic choice if you are to ask me.

They have moved out the comfortable seating and the leather sofa, and they have replaced this with hard seats and low slung wobbly coffee tables. It is frustrating to see and more painful to know what may have been the thinking behind this decision. 

Greed?

The decision would have been to improve the turnover by making it so uncomfortable that people don’t sit for a long time. They can leave (because their ass is numb from the hard wooden chairs) and give seats to the next paying customers.

It makes business sense. Right! But does it make customer service sense? 

In some cases, it might. For instance, a crazy busy cafe could use the need to free up seats quicker to provide seats for leg-weary shoppers to get a well-earned short rest.

However, that was not this cafe.

If they looked at who was using the cafe, they would see that during the week, it was predominantly used by people grabbing a coffee while hunched over a laptop to clear some work. 

This was a very comfortable and quiet place, away from the hustle and bustle of Sanlitun, Beijing, and the patrons could get some focused time to do a bit of work. Now, with the changes, that is not so easy. Sure, the place is quiet, and even more so now that they have made it so uncomfortable, it is not the same. A low-level coffee table is not conducive to typing for any length of time, and a hard wooden seat is numbing on the legs and ass and, in turn, distracting.

In this situation, I always find myself asking these types of questions, who makes these choices and why? 

Have they thought it through deep enough to make the decision based on more than just a spreadsheet?

Have they considered a more comprehensive range of features and benefits within their decision-making process?

A case in point:

There was a great restaurant that was very popular in the area where I work. It was called ‘Element Fresh’, and it provided good food at a competitive price. The restaurant shut its doors for a few weeks while it transformed into a new exciting offer. It changed its name to ‘Vintage Element Fresh’ and changed the customer proposition. Now it is not so busy – they screwed up the customer offer. The quality of the service declined, and the food is of inferior quality and value. Now everything reeks of being wrong because the workers see the writing on the wall and have given up. 

It oozes from their body language and their distractions – This place is dying, and no one wants to make the call on the lousy investment in the change in offer. 

Quite often, the decisions made elsewhere make a negative impact. Still, the original decision-maker is committed. They don’t reverse the decision and then look for other scapegoats to blame the performance on.

This is a sunk cost scenario.

‘Sunk cost, in economics and finance, a cost that has already been incurred and that cannot be recovered. In economic decision making, sunk costs are treated as bygone and are not taken into consideration when deciding whether to continue an investment project’

Source: http://www.britannica.com

My take-away from this is that apart from a painful back from leaning into the low table, some decisions need some broader thought before committing any expense. Once engaged, you should observe the return on the decision and be ready to tackle the subject of sunk costs and how to bite that bullet if you must. The brave people do this.

In your personal life, it is always worthwhile giving yourself some education on the benefit of realising and managing sunk costs and then being brave enough to take the step to deal with them.

In short, be prepared to write off some stuff that you have invested money in and then quickly move on and don’t look back.

There is no point in crying over spilt milk or even spilt coffee, for that matter.

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