Shrinking Pie or Growing Pie?

I got the inspiration for this post from a small restaurant I visit from time to time. The owner is an older Thai man who makes sure his food tastes great. Since I’m a fan of Thai food I come to the restaurant every few weeks and although I’m a regular customer who has referred 10 people to the restaurant the owner still always charges me extra for something. The extra charges are not very much, but just enough to make you regret visiting the place.

So I began thinking why does he insists on upsetting his customers? I believe that the answer lies in the shrinking pie syndrome. What I mean is he thinks that there will only be so many customers and so much revenues coming to his business. So he has to make sure he gets enough to pay the rent. So if he gives a customer an extra plastic cup or another bowl of rice he has to charge for it or there will not be enough to pay the rent.

On the other hand, a business person can look at the situation and consider will this customer come more often if we treat him as a welcome guest? Would this customer bring more people? Is there anything to be gained by making this customer feel special?

Most people reading this by now think the answer is obvious, however, many of us get stuck in the shrinking pie syndrome. The reason for this is that the growing pie requires faith. The growing pie requires us to put forth a plan and execute it. If you pay an employee a greater amount would he produce more? If you spend additional time with a customer will he buy more? If you investment in website improvements will close ratio improve? If you invest additional funds in any area of your business would sales increase or would profit grow?

The answers are not always obvious. In many times the decisions are hard. However, the growing pie is always better then the shrinking pie since it provides you with an opportunity to grow.

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