In 1930 Albert Einstein discovered the world’s most well-known equation: E= MC2, a fundamental relationship between mass and energy that is constant throughout the universe. Here’s another universal equation that we use each day:
This is the Value Equation, and it states simply that VALUE is equal to QUALITY divided by PRICE. The higher the quality, the greater the value. The higher the price, the lower the value.
Think about it. You can get a $4 cup of coffee at Starbucks, or a $2 cup at McDonalds. You enjoy a $200 dinner at Ruth Chris, or a $20 Blue Plate Special at Denny’s. You can pay $350 a night to stay at the Ritz Carlton, or $65 at the Motel 6.
If the most important factor was always Quality, we’d all be drinking Starbucks, eating at Ruth Chris, and lodging the Ritz. If the only consideration was Price, there’s be a line at McDonald’s (okay, there already is), you’d need a reservation at Denny’s, and every city would be dotted with Motel 6’s (again).
The point is this: it’s not what you get, it’s not what you pay. It is all about what you GET for what you PAY – that’s the Value Equation. Certainly, Quality is more difficult to quantify than Price, yet the advent of review sites like Yelp and TripAdvisor, who use 5-star rating systems, make it much easier for your customers to do the Value Equation math. I’ve actually taken this theory to a calculus level with complex formulas that I won’t present in this blog (you’re welcome), but I want to make a very important point that involves training.
As a business owner and manager, you have very little control over Price. Often the Price for your product or service is set my competitive market forces or the corporate office in Orlando. The one factor you do have complete control over is Quality. And, as we’ve established, the greater the Quality of your product or service, the greater the Value.
Even if you’re a very small business, improving Quality means getting your entire staff to understand and embrace concepts like standards, consistency, productivity, presentation, and customer service. How do you do this? Training is the only way. That’s why Sunrise Basic Training offers dozens of targeted e-learning courses for hotels, restaurants, and food service operations that can quickly and cost-effectively bring all your staff up to the level of quality service that exceed your customer’s expectations.
So, hey, Einstein, it’s not rocket science: training improves Quality, which improves Value, which brings customers in your door and then brings them back.