Last week I visited a local 7-11 to purchase a refill card for my cell phone (I use a pay-as-you-go plan). In order to get the best deal, I always buy the $100 denomination cards. I had only a credit card with me, and no cash.
With credit card in hand, I took the refill card to the counter, where the store’s proprietor was at the cash register.
Tersely he said, “Cash?”
“I’m sorry, I don’t have any cash with me. Do you not take credit card?” I could see the little electronic credit card terminal right in front of me.
Me: “Uh, sorry, I only have a credit card.”
“Fine, slide your card…”
Now, I understand why he balked at the credit card. Credit cards impose a percentage fee, probable around 2% (worth $2.00 in this case) for him. Debit cards have a fee which is less expensive. And of course cash is best.
So by my using credit card, he would earn $2.00 less profit on this transaction.
Previously I’ve used a credit card to buy phone refills at places like Target without so much as a bat of an eyelash.
That was my first visit to his 7-11, and it will be my last. Why? His reaction left me feeling hesitant to go through that experience again, when a much easier and friendly experience is available elsewhere.
He gained nothing. In the end, I still paid with credit card, and he missed out on $2. Worse still, he lost a potential repeat customer (the 7-11 is conveniently located along my daily route). On subsequent trips, maybe I’d have cash. Or maybe I’d also buy other items in the store (with higher profit margins) while there to get a phone card.
In this light, it was very shortsighted to be so concerned about a single transaction — especially since this was my “first impression” with his business. Conventional wisdom says that existing customers are 7-10 TIMES more valuable than new customers because someone who’s bought from you before is far more likely to buy from you (again).
It’s all about your customer’s experience.
If your customers have a good experience with you, they’ll happily come back for more.
If your customers have a GREAT experience with you, that they can’t get anywhere else, they’ll become raving fans and tell all their friends.
Think about your business from your customer’s perspective. What can you do to give them a great experience? What can you offer your customers that’s uniquely you?
P.S. Bonus points if you can figure out how I knew the man at the register was the proprietor.