One resolute bird.
Earlier this week, the Atlanta Falcons made a curious and rare decision to listen and respond to its fan-base (press release). Upon the opening of its new stadium, the NFL franchise will charge far more fair and reasonable prices for its concessions.
Long irksome for sports fans, the cost of concessions has reached a point wherein it can cost more for a beer than a seat on a given night. Increasingly, only those named Walton, Hearst, and DuPont are able to enjoy a family outing to the ballpark complete with sustenance through the often four-hour events. To be fair, concessions are luxuries—not truly necessary to the enjoyment of the game—but they are, and should be, part of the experience (and can be the key to maintaining a positive experience/sanity for those with children). But, at what point is it reasonable for a team or venue to dictate the terms of bankruptcy for a family to enjoy the ostentatious luxury of some dogs and sodas?
Atlanta Falcons CEO, Rich McKay, no longer believes those terms are reasonable at all. Why? Because research consistently showed that concession prices, quality, and wait times ranked as the worst of all fan experiences. This is across all leagues, teams, and venues. The Falcons, who just completed a new stadium, had the opportunity to right that wrong and lead the charge on new paradigm.
What does any of this have to do with the wine/beer/spirits industry? Well…in short, everything. Recognizing and reacting to broken practices is key to any business’s health, particularly when relating directly to customers. The lessons from the Falcon’s decision are powerful. What McKay and his team realized is that doing things the old way just because that is “how it has always been done” is not a sufficient excuse for poor customer relations. Sure, there’s lots of money to be made on jacked-up soft pretzel prices, but is it worth the cost of a positive overall fan experience?
Alcohol beverage retailer—are you buying a 10-case QD deal on National Brand × Red Blend and still selling it at full markup? That’s fine, but you must give your customers enough credit that they likely know what the competitive price should be. Trust me, your customers may be loyal as a matter of convenience but they shop around.
The Falcons identified this need to treat their customers as knowledgeable consumers and not simply as cash machines. They realized that there was a long-term cost associated with overcharging their customers in the concession lines and that is that they would likely eat and drink at tailgates before the game and hold off on the second beer or soft pretzel inside the stadium opting instead to save the money and get a proper meal after the game. In the short-term, under the old model, they may make better margin but they will have significantly lower volume.
The difference for you is that you do not have the captive audience that a sports franchise has. If a ticket-holder wants a drink or food during the game, they have to pay the whatever the concessionaire charges. If a customer walks into your store and doesn’t like the prices they see on the products they like to buy, they can walk out and go somewhere else. The Falcons still made the decision to cut their concession prices even though they have a captive audience because the trade-off of lower volume over time coupled with constantly disgruntled fans was not worth the extra margin on the short-term. You need to think the same way.
Respect your customers. Listen to them. Find ways to appease them—be willing to cut prices on what should be high-turn products, trial run customer requests at less than standard mark-up to be competitive with the market at-large, etc., and be fair and reasonable in finding alternatives to your customers when it simply doesn’t make good business sense to do exactly what they want. You are in this business for the long-haul anyway—the short-term margin losses will be made up over time with greater volume and happy customers.
Remember: there are always ways to make up the difference in margin. You can never make up the difference in lost customers.