5 days ago
Thursday, February 14, 2013
WE ALL PAY FOR FREE
This week there was one about long term customers versus new customers. I occasionally wonder if I am the only consumer who is offended by the deals "new customers" can get that are so much better than what I can get as a long term customer, so this article caught my eye.
What if loyal, long-term customers requested their bills to be reduced by the amount being charged to offset the “free” offers made to new customers? How quickly things might change.
Free offers frequently start small. But innocent, complimentary offers often accelerate into awarding outrageous commissions, “finder’s fees,” travel junkets, fishing trips or outright kick-backs to people who refer work to us.
Okay - not exactly where I was expecting this discussion to go - what happened to the customer? Why are we back to talking about the woes of the business owner? It goes on:
A freebie mentality doesn’t involve only introductory offers to potential customers. It involves the people who work for our company, too. Are “free” health benefits and other “perks” really free? What about the automatic pay increases expected year after year. Who pays for that?
Business owners aren’t exempt from this freebie mentality, either. How often is the company check book used as a piggy bank for the owner’s personal purchases (some of which can be pretty grand) that bring no value to either the company or its customers?
Too often, these “perks” are viewed as entitlements of business ownership, rationalized by all the hard work and financial risk the owner takes in building his business. Somehow the concept of “someone always pays” gets overlooked.
I’m always intrigued when someone comments about a business owner’s ability to “write off” legitimate business trips, charitable donations or other business purchases. The underlying message is that these things are free.
Okay - so the customer has sort of been left out of this conversation in a direct way, but I understand that the writer is speaking to the "big picture."
As an employee of 3 different small companies in the past 10 years, I can testify that there is not simply one mindset driving the way business is conducted. With regard to employees and expenses, this is my experience.
I worked for a billionaire who didn't pay employees much above minimum wage, who didn't give annual raises (employees went for 4-5 years with no raise when I was there), who only paid the minimum 25% of the employee's health care premium and who gave a $50.00 Target gift card at Christmas. They offered 3 paid sick days, we could earn paid time off and there was a bump if you worked a holiday. He did not mingle his personal expenses with the business. However, he gave comps to friends and family, and used the services at no expense to himself for very long periods of time, making those services unavailable for paying customers.
I worked for a woman who was the sole support of her family (her husband was the "stay at home"). I got raises at least once a year, she paid the entire employee premium, we had paid holidays and vacation plus she paid for the week we were closed at the end of the year. She also gave year end bonuses which were tied to the profit of the company - very generous. I wasn't privy to all the bookkeeping but it did not appear that she ran any of her personal expenses through the company.
Now I am working for an owner who likes to think of himself as generous. He pays slightly above average and I did get a promised raise during my first year. We get no paid time off - no sick days, no paid holidays, no holiday pay, no paid vacation. He does pay 75% of the employee health premium. Every so often he will hand out a $100.00 bill.
He likes to complain about how he can't afford to do this and that but as time has gone on I see and hear a lot which says otherwise. He runs most of his personal expenses through the business. He writes off his personal travel, for example, trips to Hawaii, Mexico and Las Vegas by "visiting a local businessman while he is there". He writes off his clothes as "uniforms." All his and his wife's car expenses, entertainment, even their home utilities are paid by the business.
Does that make it "free" to him? No. It is his business and what remains as profit at the end of the year before or after expenses is his. However, if covering personal expenses makes it impossible to cover the needs of the business or offering a few days of sick pay, then it goes beyond being all about his paycheck.
We all pay for the business decisions being made. As President Obama said in his State of the Union Address - if we raise the minimum wage then those workers will have more money to spend on goods and services. Bringing manufacturing back from overseas may cost a company more, but it will, in turn, benefit the whole of the economy. Each decision has ripples - for good or for bad.
Employees who work without the basics of compensation and care become resentful employees; probably not as effective and loyal as those who feel valued by their employer. Customers who feel second best to the "potential" customer are likely to take their business elsewhere or just stop using that kind of service.
As a customer and an employee - I feel the pinch on both sides. I know that nothing is free. My employer has the right to decide what is important to him when offering employee compensation. I have to decide if my loyalty is being rewarded by the businesses I patronize and by my employer's business I put so much time and energy into.