I like pizza. I think I’m among a majority of people who do. And, pizza I would say is as much a commodity as coffee—although people certainly have their preferences and favorites for sure. While I’m not here to debate the nutritional merits of pizza, I will admit that I have this craving I must satisfy every couple of weeks. Therefore, pizza has been a regular element of my diet. I don’t share this very readily or very often with my nutritionist. I figure as long as I also consume my requisite daily intake of fruits, vegetables, and whole grains, I’m in good accord. Besides, pizza crust could be whole-grain, tomato is a fruit, and I’ll often have a veggie pizza. So, in essence, pizza may be my best nutritional choice, every day…!! But, I digress.
I’ll use my love of pizza to make a point about quality, consistency and the customer experience and tie that experience directly into business outcomes. I live in the Boston area where, in the southeastern part of the state at least, “bar pizza” seems to have been born many years ago and still thrives. Some call it Greek style pizza but it’s those small round ten-inch thin crust versions where there is no discernible crust roll around the perimeter. Most of the time, these are only available at local taverns or, as they call them here in the Boston area, “baahs.”
The closest “baah” pizza to me is located in Quincy, MA where I live and is about 10 minutes from my home. Let’s call this Pizza Bar A. I was fairly attached to Pizza Bar A for about seven years straight—typically getting my pizza a couple of times a month as take-out, since it was so close to home. Then I began to experience differences (and a degradation) in quality that depended perhaps on who was cooking that night, how busy they were, and what ingredients they were using, etc. You really have to work hard to make pizza not enjoyable, but somehow they were mastering the art. Once it got to the point where pizza from Pizza Bar A was only enjoyable half of the time, my wife and I decided to look around.
Our alternative source was found in a town about 45 minutes from my home. Let’s call this one Pizza Bar B. So, rather than going there for take-out and arriving home with a cold pizza needing to be reheated, we decided we would just eat-in. Naturally, eating-in leads to ordering appetizers, drinks, and dessert. Think up-sell. Over time, for about a year now, we are finding that Pizza Bar B offers quality pizza that matches Pizza Bar A at its very best and, but more importantly, a consistent product that is unmatched, even though it cost a lot more. Plus, the service is fast, efficient and just as consistent as the product. They earn a 10 on the 0 through 10 rating scale from both of us for both quality and consistent products and quality and consistent services.
Now, let’s analyze the simple economics of this situation to see who wins in the long run. The cost of a pizza at Pizza Bar A is $8 per unit while cost of pizza at Pizza Bar B for the same kind of pizza with the same toppings is $12 per unit, regardless as to whether this is take-out or eat-in. Because we are eating in at Pizza Bar B, we are also spending a lot more because we are also purchasing beverages and appetizers.
Visits / Year
Spend / Visit
Pizza Bar A
Pizza Bar B
Let’s also add the travel and time component to this analysis as well. Pizza Bar B is 24 miles away whereas Pizza Bar A is only 6 miles away. That difference of 18 miles is costing me an extra two gallons of fuel [at $3.50/ gallon] which is adding another $168 to my annual spend just getting there and home. I’ll not include the cost of my personal time other than to mention that this would be a factor when you extrapolate this to any normal business situation.
So there you have it. The bottom line is this. I will pay over 2.5 times more each year for a quality and consistent pizza experience—satisfying my desire for good pizza—value is king. And I’m just one customer. Pizza Bar B has a fairly large capacity and has been in business since 1955. I’m now a promoter of Pizza Bar B and I highly recommend them to all of my friends and colleagues—even the ones that, like me, that were dedicated to Pizza Bar A. So, imagine that some of them, let’s say a dozen of them, defect and start going to Pizza Bar B. That means that Pizza Bar A could be losing somewhere in the vicinity of $15,000 in annual revenues just based on my experience and defection plus that of a dozen friends of mine to which I have spread the word.
Consider the very business you are in—whether B2B orB2C. How consistent is your product, your delivery, your service and support, your service recovery, and your overall customer experience? Are you even measuring those touch-points on a regular and consistent basis? Is quality and consistency part of your organization’s experience design thinking? How committed is your organization to quality and consistency at every customer interaction? These are questions worth considering for any business and from a systems perspective, especially as they relate to organizational profitability, business continuity and sustainment, and future growth.