Problem Statement: Lucky Pup is a local store that provides bathing facilities for dogs. Currently, the owner of Lucky Pup estimates that more than 50% of her customer traffic occurs on Saturdays between 11 & 3. She would like to develop a process that encourages her customers to come during the week so the wait on Saturdays is not so long. Currently, all Saturday baths are self-serve, while baths during the week can be arranged by appointment and a staff member can bathe the dog (at a higher cost).
Solution 1:
Online Appointments on Saturday: Customers will need to book appointments on Saturday. Appointments will be for 15-minute time slots with the staff closely monitoring the process. An additional 5 minutes will be given for drying the dogs in the designated drying area. The concept would control the Saturday traffic. With limited appointments those customers not able to book for Saturday may come on a different day. The strict scheduling also allows for customers to more definitively plan their days, since there won't be unexpected waits when they come to the store. However, this would be a drastic change from the current process in which no appointments are allowed, everything is strictly "first come, first serve." There is also the possibility of customers abusing the system and attempting to lock in bath appointments for months at a time. This would also require strict time limit enforcement by the staff.
Solution 2: Raise prices on Saturday: On Saturday, raising the price from $10, $12, and $15 to $15, $17, and $20 would release some traffic on Saturday.
Favorable feature: Encourage people to visit the store during week days.
Likely Constraints: may lose many customers or push loyal customers to visit other stores with cheaper prices.
Soultion 3: Charity: Hold charity nights during the week in which premium service is offered for $20 (usually $15). Of the $20, $10 will go towards a specific charity. This concept could strengthen the store image in the pet-owning community as well as attract new customers and current weekend customers. Likely constraints are that it is a temporary solution and the higher price may be too much to overcome.
Neat project. Where is Lucky Pup located? Are there restaurants it might coordinate with to promote dropping the dog off for a bath during the week and picking up dinner while the owner waits? Or shops nearby that could coordinate sidewalk sales? The manipulation of pricing would likely change things, but it would be unfortunate to lose repeat canine clients, whose owners tend toward loyalty and might be turned off due to price change. Losing a dog owner oftentimes represents a larger loss for the business than losing a customer in other sectors...
ReplyDelete1) For a lot of people, Saturday is the day on which they run errands and catch up - so they may not know in advance what time they want to bring their dog in for a bath. Also, for working individuals, Saturday may be the only option. So, if this location is not available on a given Saturday, they may simply go to another company. This also seems somewhat difficult and expensive to enforce.
ReplyDelete2) What do competitors charge on Saturdays? Have you benchmarked how competitors are handling Saturday demand? I am concerned about raising prices.
I think that you may want to consider offering customers coupons that are only valid on weekdays or having special weekday evening hours that are accessible for working dog owners.
Interesting client and issue -
ReplyDelete1. This seems like it might put off a lot of loyal customers. Perhaps make a few booths available by reservation only, but keep an open policy on others. It will increase the wait for those that don't reserve and after one trip they may decide that reservations are the way to go. As people learn, the ratio can be increased but always keep a couple slots open for people that just show up on a whim.
2. I worry about the mixed message of having people pay more for self serve rather than having someone wash their dog for them. While it makes sense from a pure econ perspective(lowering demand), it could upset future pricing structures that charge a premium for "professional dog washes" and give the impression that they might be careless or less thorough than the owner would be.
3. The charity thing could work, but only if it was done with specific causes that have their own audience (like a church) that could rally their members to go get their dog washed. That would drive new customers to try the service and perhaps get them to come back if they liked it.
While this is a good marketing idea, i don't know that it would really address the original problem you are trying to solve
Feedback:
ReplyDeleteSolution #2: What if instead of increasing prices on Saturday you decrease prices on weekdays and advertise the decrease in one or more weekday washes. This is a more customer friendly way to manipulate supply/demand of business human capital and other resources.
Solution #1: This might make the business more efficient and really get doggie washing and waxing down to a science. Before implementing it might be interesting to conduct some tests or survey customers to get their reaction to this idea.
-Kira B. Bielfield
#1: Could be negative as an average person would not make an appointment to shower his dog.
ReplyDelete#2: Good solution
#3: This would not motivate people to bring their dogs on the weekdays. You may also want to consider pick-up service on the weekdays for a little extra cost.
I dont like idea #2 because changing the price points may eliminate potential business. I do think idea #3 is a good idea. Adding promotions during the week may encourage people to change there dog bathing habits or may bring new people to the store.
ReplyDeleteIdea #1 would involve changing how the customers are using the company, so I think it would be difficult to change. This seems like a convenience service, since you could just wash the dog at home, so I don't think decreaseing the convenience would be a good idea.
ReplyDeleteIdea #2 sounds reasonable and customers could simply adjust their schedules if they were price sensitive.
Way to Froeb this :) I think it's very smart that you're looking at price sensitivity and incentives for your goal visit times to influence customer behavior. My only worry is that you don't want to tick off the the loyal customers by raising prices or cramping their style.
ReplyDelete#3 could be a great jumping-off point for getting customers to come on weeknights. Do most of their customers know that they're open on weeknights? I usually go places on Saturday because I don't have time on weekdays and just assume that stores aren't open at night. Maybe just getting that word out would help spread the demand out. Going along with your charity night idea, Lucky Pup could set up other social events on weeknights to get dog owners together. Those folks love to talk about their dogs...
May be a good idea to talk to some customers about why they don't come on weekdays (work? no other customers there?) and attack it from that angle.
Solution #2 could be dangerous for reasons that you already mentioned. I would stay way from this option if possible.
ReplyDeleteI like solution #1 with small variations. The web-based system might be difficult to implement immediately. It might be worth using the good old fashion call for an appt. system. You might look at having some self wash booths that are not appt. based and the rest of availabilty strictly appt based. This might provide for the best of both worlds.
Option 2 is a great idea because it is simple supply and demand. If they are worried about loosing loyal customers or upsetting people you may want to consider lowering the price during non busy times to encourage people to visit at other times. Rather than punishing them from visiting on a busy day you reward them for visiting on a less busy day.
ReplyDeleteI'd love to know why people come during that particular times. Is it that they don't think of it during the week? Is it that that's the only time that they have time? Is it that that's the only time when they can get their kids involved in their pet's care? Is it that they know that's when it is cheapest? Depending on the answer, you may be insights on a different approach. If the issue is cost - #2 (raising the prices at peak times) may only get you fewer customers and not more distributed customers. If the issue is forgetting - maybe a loyalty program where you email people appointment slots during the week will help spread the usage. #1 would only make sense if dog-bathers used a "scheduling logic" when thinking about dog care. It is likely, though, that people just remember to do it (and only have time to do it) on Saturdays and having to look up the website and then schedule it may erect insurmountable barriers for people.
ReplyDeleteI was wondering if people like to go on Saturday when its crowded as it was a kind of social event!? (I hate going to restaurants where there are no customers!) Maybe people like to go when its crowded to make an un-fun task actually tolerable. If so, you could use your #3, but don't worry about doing a social cause - just serve do something to make it fun! Like maybe serve wine - - that seems to work at the manicure/pedicure place on Hillsboro Road! Make it a "self-serve" special event that's fun for the pet-owners.
I think Justin had an interesting suggestion about solution 1 - rather than change the entire system to an appointment based system, reserve some booths for appointments and others for walk-ins. Some people truly may not mind waiting around for an open bath and others may be encouraged to make appointments once they see how much faster dog owners who made appointments are able to get in and get out of the shop. I would also encourage you to spend some time on a Saturday talking to the owner's customers (with the owner's permission, of course). The personality types of these individuals as well their reasons for only coming to the shop on Saturdays seem likely to impact the effectiveness of any of your ideas.
ReplyDeleteWith solution #1, I think you run the risk of customers not coming at all. This involves consumers changing their behavior and will likely cause a great deal of confustion (at least intially).
ReplyDeleteI think solution #2 is the strongest. If consumers recognize a finacial benefit of coming during the week, they are more likely to do so.
If the company has the capacity to initiate online appointments, I think this is the best option! It is convenient for both the customer and the company. It also prevents them from having to raise prices. Though that option also works, it may deter people from ever coming to the company!
ReplyDelete1) What if you made your whole Saturday payment system similar to that of a pay-as-you-go car wash. The patron could come in, drop quarters in the slot for water and soap, and then proceed to wash their dog. This would limit the time the customer could spend washing their dog, and well as cause them to hurry through the process.
ReplyDelete2) Also, on the weekends, the store could create mobile washing stations that could be set up outdoors. Therefore, if the weather was good, customers could enjoy good weather while washing their dogs outside.
The store could offer discounts for online reservation (like airlines do) and charge slightly more for walk in customers. The store should promote this option to encourage people to sign up online. Also, specials could be offered during certain times of the day...kind of like happy hours or early bird specials.
ReplyDeleteSolution number two may present a problem in the sense that a price raise could turn people off to the business in general. Many people probably come on Saturday because they do not have to work and that is the only time that they could do it.
ReplyDelete