Tuesday, April 21, 2009

Welcome to America - Free Fries with Every Sandwich!

An old boss of mine once asked me " Mike, what’s the most powerful word in the English language? " I thought it was an odd question to be asking a new salesperson so I wasn't sure how to reply. After thinking about it for a moment I decided to be straight with him and said " I don’t know " His response? "Free"
At the time, I dismissed it as the thoughts of a jaded businessman, but now I see the beauty of his logic. Because we are going through some very tough times right now and everybody is looking for ways to get the biggest bang for their buck, companies are constantly using words like "free" and "unlimited" in their advertising pitches. Whether it’s trips to the salad bar or cell phone minutes, they are trying to suck people in and make them think they are really getting something valuable, when in truth, they are giving away only the things that cost them little or nothing. And nothing illustrates this better than the idea of "Free Fries with Every Sandwich", hence the title of this post. For those of you who have been around the block a few times, you probably know where I’m going with this. For the rest of you, bear with me and I’ll explain. You see, as Americans, we have grown accustomed to getting something "thrown in" to close the sale or make a deal. Whether we want it or even need it is secondary at this point, in fact, we feel ripped off if we don’t get to take a doggie bag home from the restaurant. But back to the fries. When you take a moment to do the math, you’ll see what I’m talking about. OK, here we go. Let’s say you go to a fast food joint for lunch and want a burger. You’re really not that hungry and you could do just fine with only the burger and maybe a drink, but when you approach the counter or pull up to the drive thru, they pitch you the "value meal". Because it includes fries and a drink and has the word "value" attached to it, it seems like a good deal. A quick calculation of the meal if purchased a la Carte confirms your smart shopper instincts, so you go ahead and order the number four combo. Congratulations! You’ve just been had. In sales speak it’s called up selling. Here’s how it works: The burger costs them maybe a buck and a half to make. If they sell it to you for two bucks, they make only fifty cents profit, less operating expenses, wages, insurance and blah, blah, blah. Now their margin is down to maybe a quarter. Not acceptable. So they price the items in a way that makes ordering the drink separately cost you almost as much as the burger itself, same thing with the fries. They know that you will need something to wash down all that salty food with and that you probably don’t have the time or inclination to go elsewhere. The combo meal costs you four bucks, but the fries and drink only cost them maybe another fifty cents to deliver. They’ve just increased their profit margin by a whopping 700% and you just got fatter and poorer. Nice work if you can get it. The cable TV companies and cellular providers do the exact same thing and call it a "bundle". Five hundred channels of crap when all you really want is one or two good ones. Unlimited texting? What the hell do I need that for? All I want to do is make a call when I need help or tell my wife that I already picked up the milk. No can do my friend. The "basic" package is priced just like the drink at the fast food place. So, if you buy it ala Carte, you might as well get the "bundle" whether you need eight thousand minutes a month or not. And so it goes, so it goes, and so it goes, and so it goes, and where it’s going nobody knows. Hey, aren’t those the lyrics to a song? But I digress. Well, I hope you’ve enjoyed my little rant today and hope you will log on for the next one. Until then, skip the fries and turn your cell phone off. Try talking with an old friend face to face if that’s still possible, and maybe, just maybe, we’ll all be a little happier, healthier, and have a little more coin left in our pockets.