Do You Know How Many Customers You’re Throwing Away?

People waiting in an airportI was recently travelling home after a business trip and I checked in to a very small regional airport.  It was around 6:30 p.m. and I had over an hour to kill so I visited the airport’s only café to buy some food.  The café appeared to be part of a regional mid-sized chain, and they had a standard range of food, so I knew exactly what I could expect.  I looked through the menu, made my choice, and went to the counter to order.

 

I gave my order to the cashier who looked a little embarrassed and immediately apologised:

 

 “I’m really sorry but the kitchen closes at 6 p.m., so we’re no longer able to serve food.  We do still have cakes and snacks available…”

 

Unusually for me, I really wasn’t in the mood for cake, so I walked away from the café and sat in departures. I subsequently walked onto the plane hungrier than I would have liked.

 

As those of you that read my blog regularly know, I have a tendency to ‘overthink’ things sometimes – and this example has been spinning around in my mind for days now.  I just couldn’t understand why the managers of the café would make a business decision to stop serving food at 6 p.m.  Particularly since:

 

  • The last flight leaves the airport at 8:10 p.m.
  • It’s not uncommon for flights to be delayed (in fact, mine was delayed by 35 minutes)
  • People in the UK generally tend to eat their evening meal after 6 p.m.
  • Travellers often check in an hour or more before departure
  • The airport is tiny (one café, one duty free shop, one newspaper store) so there’s little else to do

 

Surely, this creates a two hour window – between 6 – 8 p.m. which is prime for serving food?  Particularly when flights start to get delayed, and people start looking for things to do.

 

Then it struck me:  The decision to stop serving food at 6 p.m. may well have been accidental or arbitrary.  If we were to ask the café managers why the decision had been made it’s quite likely that it would have been driven by a general gut feel, or perhaps historical and outdated information.   Perhaps the last flight used to leave at 6:15 p.m. – and when this changed they couldn’t bring themselves to extend the hours of the kitchen staff and the counter staff.  If we asked what data drove this decision, the answer might be “none at all…”

 

I also wonder whether the café managers have any idea how much potential business they are throwing away.  I suspect there is no feedback loop whereby data – formal or informal – is collected to indicate the number of customers that pass through the airport and those that walk away without buying.

 

So why would a business ignore a potential opportunity like this?  Or at the very least, why wouldn’t they consider it?  Complacency is a trap that can affect organisations – whether a mid-sized café or a huge multinational.  If the organisation is making “enough profit” then there’s no need to look for opportunities.  So the opportunity to open the kitchen a little longer is ignored for years – and as a result passengers start bringing in their own food – and stop using the café entirely.  Then there’s a crisis, but it’s much more problematic as consumer habits have changed!

 

As business analysts, one of our many mantras is “study demand” – if we understand the customer’s needs and requirements and the demand patterns that they place on our organisations, we can ensure our companies provide outstanding service whilst also driving profit.  This starts by understanding the business situation, the data and the many unstructured elements within the wider business environment.  It involves assimilating the data, utilising the right type of analysis and analytic capabilities as well as assessing the business situation holistically.

 

In summary: Better analytics and analysis help drive better insight. Better insight drives better decisions.  Better decisions create a better business. Knowing the customer is crucial!

 

What are your thoughts on analysing demand? Or do you have a related story or comment? I’d love to hear from you.  Please feel free to add a comment below.

 

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This post was brought to you by IBM for Midsize Business and opinions are my own. To read more on this topic, visit IBM’s Midsize Insider. Dedicated to providing businesses with expertise, solutions and tools that are specific to small and midsized companies, the Midsize Business program provides businesses with the materials and knowledge they need to become engines of a smarter planet.

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