I once had a supplier who worked really hard and would rock up in an old green Mitsubishi Magna – a tired and tidy vanilla car. Like his car, his price was always competitive, and he provided a high level of reliable service. So much so, that late one Friday evening he had to drop off some parts to keep a project running. He was as caught off guard at having to make the last minute trip himself as I was when he pulled up in a shiny red Ferrari.
“What’s with the car” I asked. “It’s my weekender. If I drove around in this all week, everyone would be thinking I’m ripping them off and ask for a discount”. There is some truth in his reasoning, most people would judge whether they are getting a good deal based on how they perceive the other guy to be going.
I’ve also seen this from the other side of the fence when involved in a hire business. Went out to see a customer in Townsville to check why he wasn’t hiring as much from us when I knew he had work on. Normally hire fulfils temporary needs or frees up cash for other purposes and it is therefore not unusual to see a company increase or decrease their hiring based on the medium to long term work outlook. However, his response also taught me a thing or two: “When I drive past your yard, I don’t see many vehicles in it, so I figured you guys weren’t doing too well”. I pointed out that our business was indeed to hire out vehicles, and the fact that there weren’t many in the yard was in fact the perfect measure of that we were doing very well! Our utilisation was unheard of for the industry at 90-95%. When he reflected on that assets don’t make money in the yard and that we had never let him down, he turned around and started hiring from us again.
There were several lessons in there for me also. Much like the boat and caravan retailers who can’t get stock presently, we made sure every vehicle we did have was parked prominently along the fence line from now on.
Moral of the stories: people make judgement based on perceptions they get from what they see. Do you sit down at the nearly empty glitzy restaurant, or join the crowd at the busy one next door? It is important to send the right message about the appearance of any business.
As always, onwards and upwards!
Fred Carlsson
General Manager
