A little lesson about a bag… ( or how to create sustainable and scalable profit)

…Sometimes I just sit; sometimes I just sit and watch. A few days back I was able to observe a small moment in someone’s life. They were holding a bag of shopping, not a “bag-for-life” but the flimsiest of plastic carrier bags.

It was bulging with probably too many things and sure enough the bag split and the contents were strewn across the pavement. 

The hapless bag carrier looked forlornly at the hole in her now useless bag and set about picking up the packets of food, bottles of water, magazines etc. She soon realised however that she could not pick up everything and still hold it all in her hands …and you could see the sense of resignation and despair in her face.

People passed her on the pavement; some offered a sympathetic word, one or two picked things up for her, but this was not going to help her much; unless she had another means to carry her shopping home – she was more than a bit stuck.

I then noticed this old chap come up to her with a couple of new empty bags. He had evidently seen her predicament, popped into the shop she had been in and came out with two new bags.

I liked this a lot…I liked the “don’t wait to be asked” attitude, I liked the practicality and the simplicity of the help and I liked the lack of drama about it all.

At this point, you may be relieved to know, I am not going to do some cheesy segue into client care and relationship management. I reckon you were there before me and all set to huff out loud at another sugared cliché.

No, this is not a metaphor for client service, but something deeper.

In a real client situation the ultimate goal is obviously to send the client an invoice and get paid. In effect, by analogy, my old chap having rescued the shopping situation would now ask the shopper for some money and she thrilled by his help would then willingly pay.

And here you can see how the analogy breaks down; if the old chap had asked for money it would feel really shabby and it would also undo all the goodwill immediately.

The story therefore is not about how client service wins the day; client service builds goodwill, but may not have immediate financial returns.

This analysis however is a bit dull, because clearly businesses have to make money. Can we therefore make money from this situation? The answer is “not very easily”, but stay with me as I extend the analogy further and suggest four different strategies…

Option one: We could set up a pavement stall outside the shop selling robust shopping bags. We might get a reasonable passing trade and if we could offer cashiers an “inducement” to overfill their flimsy bags this might pay dividends too!

The essence of this option however is a short term gain with an uncertain business plan and low growth potential. To really make money we need to go to the shop-owners with a solution and in this way we might be able to achieve an income that is more sustainable and scalable.

Option two: We go to the shop-owners with a training proposition to train the cashiers not to overfill their flimsy bags. This however only gives us a one-off fee and clearly no profit for the shop-owners.

Option three: We go to the shop-owners with a “bag for life solution”. Here there is an opportunity to profit share with them and make an easy early profit; but once everyone has their bag, sales will predictably fall.

Option four: What if we could create not just a bag for life, but something extra as well? Then we might create sustainable and scalable profit. For example, what if the bag had a seasonal motif (spring, summer, etc) or different designs of another sort and shoppers could trade in their old bag for a new one for a fraction of the cost of a new bag. In effect we have developed a market for selling bags and also a market for exchanging bags. If we then sell the second-hand bags to local market stalls we have a derivative market to profit from as well.

So what are the lessons for lawyers?

1.    Looking after the shopper, like my old chap did at the start, is important to demonstrate what you stand for, in effect your brand values. It shows the type of people you are and how credible you will be in other situations; but it won’t of itself make you money.

2.    To create a sustainable business with a plan for growth you have to go back to proactively solving the problem, not reactively managing the symptoms. A problem for which you have the solution is potentially income for the longer term; managing symptoms is short term and unpredictable

3.    To be truly successful for the long term however you must not just solve a problem, but add real value beyond the issue itself. You will need to be genuinely innovative, use your resources really well and segment your markets to leverage the maximum value you can from your expertise.

I wonder what you will see the next time you get a chance to just sit and watch.

Paul Gilbert is chiefeExecutive of LBC Wise Counse,l the UK based specialist management and skills training consultancy for lawyers. www.lbcwisecounsel.com