Espresso: The Strip Bar and Champagne, How to Understand Customer Value Rory Sutherland

0:01Morning, morning, or welcome. Yes, I have grown a tash, I have got a nose ring and I am covered in tattoos. I am your barista for the day. Welcome to Espresso short, snappy, espresso short podcast episodes. I've literally downloaded all the wisdom from all the founders and all the brands like Gurd, Tills, Coconut Collaborative, Candy Kittens, Little Moons, Planet Organic and I've distilled it into this micro, short, snappy wisdom to give you a mahooosive edge on the day to kickstart your day so look, without further ado, let's get cracking and enjoy this espresso shot so you then get thrust into a big organisation I also, I think is there any other I also think this is something that businesses have lost.

0:44I think there was genuinely a period where businesses, the finance, HR, bureaucratic apparatus was sufficiently deprived of information and powerless so that the way the business worked was that the practitioners worked out how to add value and then the other people worked out how to make money out of it. Okay? In that order. And I think we've created a business environment where the people who count the money okay effectively start determining what value is okay and to them what is value is what makes money and therefore they encourage the business to do more of what makes money okay and less of what doesn't make money but the actual customer value being created isn't necessarily where the money's being made i used to give this sort of slightly politically incorrect analogy which is um you know someone from a consulting firm you know apparently not very far from here i've never been i promise but in soho there are bars where uh you pay 100 pounds for a bottle of champagne which is actually cider masquerading as champagne so sparkling cider and um someone with not many clothes on comes and sits next to you and makes a fuss of you okay well if you're not careful you go into a business like this and go well i don't really understand what's going on here because we have this incredibly profitable bar business but then we have these girls who seem to be a complete overhead okay but no one's paying a hundred dollars for your goddamn cider okay in the absence of the other and i think you know in our agencies you know what makes money we're paid by the hour is time-consuming processes what adds value may in some cases be a 20 second insight flash of insight quick one guys espressos have got a brand new sponsor unleashed unleashes inventory management software that talks directly to your finance and econ software we use unleashed daily islands i bloody love it we've got our admin time in half saving approximately 30k a year why use it save money save headaches save stress get granular clarity on your margins no way your stock is don't miss availability look your favorite brands literally use unleashed as their backbone candy kittens tiny rebel trip always religiously look there's a link in the show notes please feel free to book a call with josh and his wonderful sales team at unleashed they're amazing even nothing comes of it and even better news you'll get your first month free if you reference hungry thank you it's in pulling this through a food and drink lens like for that you see this is why i love the restaurant business but also but also analogy in a way understanding that quick service restaurant business and the restaurant business and they're sort of different but they're connected um is a brilliant brilliant kind of uh comprehensible metaphor but it's but it's also i've got the thing where for food and drink brands going into retail right is you can't want to understand the one of the other whereas people you discover that weird japanese thing which is like peanuts and chili yeah that's that's why that's why i sent you i didn't discover it it's absolutely sensational isn't it luckily harvey nichols sells it yeah yeah i'd be begging you for another they've just got another um what's it called it's called white mouse it that's it yeah so there i mean so so they are uh they're genius because they've has it always existed it's always just they're based in Ireland so he was at this bread and jam last week Lorcan he's a good mate of mine but they've gotten some new flavours like a smoky chilli oil which is just on a Chinese I was like sodomising that last night on Sunday night with some leftover Chinese and duck it was just sensuous.

4:39It improves everything It does everything yeah yeah yeah quite literally everything but sorry my point is when you're the analogy of the let's well we can just call it maybe a gentleman's club where you have you're paying for the booze and that looks like one thing and then you're actually the value is is is the topless lady right with food and drink brands going into retail is you can sometimes think i would say the cogs i.e the cost of producing the product right yeah that is actually a marketing spend not a cost of goods but if you're looking at an excel spreadsheet you think oh these are the cost of of course but actually the product tastes shit then no one's going to come back and buy it again whereas what people do is they separate right we're going to put spend this much on commercials say say it's just 10 grand and that is going to drive that many facebook ads and that many shoppers to store they'll come into the store they'll buy this diet coke if it tastes like shit they ain't coming back whereas they took seven grand out of that and put it into making the product taste better right then they may not get as many people coming back short term but the people will come back in buy it like it and tell their friends about that's one really useful thing by the way about loyalty programmers in supermarkets or indeed if you're a cardo yeah longitudinal customer data which is how many people are buying the damn thing is not very valuable information how many people are repurchasing it is really valuable information so i always make the distinction i always say look if you want to spot a trend spot a thing that a few people are doing repeatedly that has the potential to become air fryers nobody who had an air fryer ever went back right thank you so so much for listening it honestly means the world to me.

6:17I hope you enjoyed your morning coffee and go and have an amazing day. Let's be having ya. If you want the full episode, it will be in the show notes. A link will be in the show notes of the full episode. Thank you so much. Please say friends as well. It means the world to me.