Lights On! The Hidden Cost of Missed Opportunities

Season 2 Episode 6 Opportunity Cost
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Cristina: [00:00:00] Welcome to Morning Coffee and Mimosas. I'm Christina. 

Joe: And I'm Joe. 

Cristina: We are a father-daughter duo. We come here Sunday mornings, but you can come here anytime you please. We banter about life, about business, and we do it over coffee and mimosas.

Joe: Good morning. 

Cristina: Good morning, FAJ. 

Joe: Another beautiful Sunday morning together. Love it. 

Cristina: This is another beautiful Sunday morning. Yes, 

Joe: yes. This is fun. 

Cristina: It is. I know. Good morning, listeners. Yes. And listeners, thanks for being here. We've missed you all. I know. Have you missed us? 

Joe: Yes.

Cristina: Oh, this monthly cadence is kind of nice sometimes, like, uh, you know, that we're on now. Mm-hmm. No pressure. You know, we get, we do this and Brad has plenty of time to make us sound [00:01:00] better and edit us. That's 

Joe: right. Put the right words in when we mess up. 

Cristina: That hasn't happened yet. I know. We just mess up and go with it.

You know, something kind of funny recently, listeners happened when we were, we were together, had at a family barbecue that my, uh, uncle and uh, and aunt hosted and it was very nice back with all of our cousins on my dad's side of the family and, my cousin's new baby. So all of us together. It made me think because sometimes there's things that happen, just in the course of life that then makes me think, wow.

I've probably said that multiple times on the podcast and how many people are like, oh, that was weird. So I don't know. You remember after we were all hanging out around the fire pit and I, I was talking to mom and I was like, mommy, would you. And my cousin Isabel was like, you call her [00:02:00] mommy. And then, and I was like, you know, sometimes, and like sometimes I'm like, daddy gra.

And Brad was like, yeah, you do sometimes call them mommy and daddy and. I always find it weird too. 

Joe: I like it though. I'm happy you're called Again, I, 

Cristina: I never really feel, I mean, I call you guys all kinds of things, you know, sometimes you're faj, sometimes, sometimes it's just, you know, mommy or daddy and I guess I don't, you know, so listeners, uh.

Is that really weird? It probably is really weird for an almost 40-year-old woman to call their parents mommy and daddy. But 

Joe: I love it because the way I look at it, I don't care if I'm a thousand years old, you better call me daddy. 

Cristina: I mean, you're, you're always gonna be my dad. Right? That's right. Always gonna be my daddy.

That's right. And my mommy. So, listeners, I'm like really weird apparently, because no, it's not like, not all the time, but I guess maybe like when I, I am really happy with you guys. I speak to you that way, 

Joe: Oh, [00:03:00] okay. What do you say when you're not happy, 

Cristina: bro? Yeah, no, I don't know. But anyway, that was just, uh, like an aha moment because you know, you don't.

Here are the things that you say and the words that you use. And all of a sudden, like everybody around me was like, yeah, that's really weird. I was like, it's 

Joe: not weird. I think it's great. I'm 

Cristina: like, okay. Well that's good 'cause we're on a podcast that tons of people listen to when I probably have used it.

I love 

Joe: it because I think we have a very special relationship, our family, and we're very blessed with that. 

Cristina: We do. Yes we do. But if any of you have, cringed when I've said that. I apologize, but I kind of don't because it'll happen again. So That's right. I just now am more objectively aware of, how odd that might be, and I'm okay with it.

Cool. So 

Joe: good. So what are we talking about today? 

Cristina: I don't know. I just took us off on a wild goose chase, but actually today we, we do have an interesting, an interesting topic. So, there is so much. Good content out on YouTube, [00:04:00] TikTok, you know, all over the place. And recently, um, my dad sent me a, clip by Rory Sutherland, who's a great marketing mind, also has a lovely British accent that makes everything he says just sound.

Even more eloquent and brilliant. but for those of you that don't know him, he kind of looks at quirky and, and explores like non-rational ways that people think and make decisions. And, uh, that has proven to, deliver some really good marketing, thought leadership mm-hmm. In areas. Mm-hmm.

And recently my dad shared this, clip where he was digging into a restaurant that. He drove by and the lights were off and they almost didn't go to the restaurant, but he knew, oh no, this is a restaurant that like, they don't close, they're always open, so let's just pull in. And it, it happened that the restaurant was open, but an employee had just forgotten to turn the lights [00:05:00] on.

And the same employee did not turn the lights on when they realized that like whoever it was from the last shift didn't turn the lights on. And that just continued. So the concept that he was talking about was kind of like the opportunity cost that exists when a mistake is made, right? or in this case, he was talking about.

How that employee, that same employee, if the owner had been there, would've been fired for stealing if he had finished a shift and taken a hundred dollars out of the register. But the employee that left the lights off from his shift. Will not really get penalized, maybe would get asked, you know, to remember to put the light on when that mistake in marketing and brand and exposure probably costs that business a thousand plus [00:06:00] dollars because of the time that.

The, the amount of people that decided to pass them by rather than come in and, order a meal. So that concept we started talking about and we're like, that is so powerful in business because human nature is, I am going to avoid risk at all costs. Right. That's just the general human nature is, is better to avoid the risk or, you know, But in doing so, 

Joe: well go ahead, daddy. Well, uh, and I, oh shit. What I just 

Cristina: said, daddy. 

Joe: No, you can't say Daddy. Keep saying Daddy. Go ahead. Pash the, uh, excuse me for my voice. The, um, uh, the point here was that, you get in trouble for. A cost, but don't get in trouble for forgetting, uh, an opportunity or, or, or causing a missed opportunity.

Right. And the interesting thing here is, is that it's, it's easier and you know, me being an accountant [00:07:00] or formally, you know, was an accountant, you're still 

Cristina: doing accounting work. Well, I do. So you are still an accountant, 

Joe: right. And so. You know, uh, and I know that, I used to get, you know, we used to get criticized at the profession as, you know, we are, we are the past, you know, we, you'll look back in the past, which is, you know, obviously you have to do that in order to file your taxes and stuff like that.

But, on one step, if you, you try to avoid. Unnecessary cost and people are looking at cost, and so obviously if an employee stole from you, they get fired and all that, but here, this employee, because he didn't put the lights on and then cars drove past and went to another restaurant because they thought it was closed, may have cost, as you said, 10 times the amount of cost, but it would be revenue that was lost.

And very often we don't look, people don't look at the revenue opportunity cost, you know, that happens [00:08:00] from things like that. And what we were, uh, Christina and I were talking about was, it doesn't have to be even a mistake by an employee that causes that, but what other opportunity costs are businesses, not taking.

Yeah, because you maybe think of the cost of that opportunity without looking at the potential revenue that could come from it, or something like, so obviously putting the lights on has a cost, right? You're gonna pay for your electricity, but, and that employee didn't do it, just not because it was trying to save money, he forgot, you know what I mean?

But, 

Cristina: but when, let's look at that in your business. But he was, but when it was brought up, it was also not, and there was no urgency around. Changing that, right? Correct. That's what, and turning the light on. Correct. 

Joe: That's what Rory Sutherland said. He would've expected that when he told the person do it, it would've been the guy would like, oh my God, the lights off to the thing and run around and put all the lights on so that they don't lose any more business.

Cristina: But digging into [00:09:00] this further, so there's this, this kind of like core idea, right? That businesses disproportionately fear being seen to have wasted money. Mm-hmm. Over failing to take opportunities. That can yield a whole lot more. Right? So if we are thinking about that, right, and, and looking at that in terms of everybody's business, and that can be, where you sit in an organization, big picture, the things that you're able to impact every day, maybe the things that you, decisions that you see made.

Um. At all different levels. It can be in your personal life, right? When we've talked about things like, you know, where you cut corners to try and save a little bit money, but maybe there's. An opportunity to invest in a way that, you know, your money can really grow right into a skill, into different things that can yield so much more.

Mm-hmm. So it's an interesting topic, I think, to just start thinking in our [00:10:00] lives in terms of how can. We get rid of that disproportionate fear of wasting money, you know, uh, of course. Mm-hmm. There can be wasted money and there's plenty of opportunities to spend less. Mm-hmm. 

Joe: I, 

Cristina: I could take note you don't 

Joe: know anything about that, but, uh, some people do.

I can take 

Cristina: note, and I'm not gonna use this as just an, you know, a reason to throw caution to the wind and keep spending more and more, but the point is. Fear is a real problem. Mm-hmm. And, uh, you know, the, the, that kind of like procurement culture of take cost out, take cost out. What opportunities are we missing 

Joe: Correct.

Cristina: On the path to doing that? 

Joe: Correct. And, and also along with that, what are you doing business wise? in your, what, whatever your business is, whether it's a consulting business or you have a retail operation or multiple shops and so on, what are you doing to make sure [00:11:00] that some of the little things, like do the lights go on at the appropriate time or, if it's a holiday and you're gonna be open, are you.

on your website and on social media, are you letting people know, Hey, I'm open, or we're open for business, or, you know, this and that. What can you, what are you doing there? To not lose revenue from something very easy to do that may not even cost any money. You just pay attention to it, you know?

And, some of that has to also do with, the idea of. Look at some of the minimal aspects of you doing business and what, what might be something happening that is preventing people, I tend to call it friction. What friction are you potentially causing that's, you know, preventing people from maybe taking that extra.

Step to buy something a little extra or something like [00:12:00] that, you know, um, or are they avoiding a part of your bus? For example, let's say you're, you know, you have a, a, a drive through operation and there's some dirt on the ground or there's something in the way, and so people are just skipping it and going to another drive up.

Um, you know, like, let's, you know for like food or something like that? No, that's little's. 

Cristina: Little dirt on the ground's. 

Joe: Little not dirt on the ground that you couldn't drive 

Cristina: over. 

Joe: No, but there's, you know, I, I get what you're saying. I know it happened to me once I was getting, I was gonna get coffee at a, at a Dunking Donuts.

but The, the drive through there was like a branch had fallen, you know, things were, were there and I, I didn't want my car to get, get in. I'm guessing you 

Cristina: had the, your new car at that point in time. My car. Yes. 

Joe: And I said, okay, I'm not coming here. 

Cristina: Yeah. You're like, this is, I 

Joe: went through another one.

Cristina: Because you saw risk. Risk for your car. 

Joe: That's right. That's right. 

Cristina: But you are right though. Uh, and like what are the things that, it could be the cost of, okay. Power washing and [00:13:00] having a service that comes and, you know. Cleans the outside of, of your drive-through 

Joe: Right. 

Cristina: Weekly. 

Joe: Right. And makes sure that its, that's the cost, right.

That it's attractive and that, you know, people want to go, you know, things that, and when they look 

Cristina: at, yeah, when they look at, you know, okay, this is, you know, $500 a month. That's not a small cost, but if, you know, 20 different people decided to not go through mm-hmm. You know, or. A hundred people decided to not go through because it wasn't, you know, appealing 

Joe: Right.

Cristina: Then that's worth it. 

Joe: But, but, but even having just somebody check, you know, just to have one of your employees go out and make sure everything is clean and everything is, you know, looks good. It doesn't even cost anything. You know what I mean? But, but people don't, a lot of people don't think about stuff like that.

Cristina: Yeah. And I mean, I think a lot of it is. What do we measure? So often we measure like what you take away, right? Mm-hmm. Or what's visible. And you [00:14:00] can't necessarily measure the opportunity for what could have been, right? Correct. Or the loss of what could have been for the things that aren't tangible and that you don't see.

So how do we create. An environment where people are almost encouraged to look for the opportunities and look for the what could be. Mm-hmm. Rather than focus on the, what you can measure of, you know, what you could remove or take out. 

Joe: Right. Or visible 

Cristina: loss from something that's just. Clear.

Joe: Right? So part of that in management, like the visible 

Cristina: loss could be, okay, well we had to keep paying for this cleaning and it was $500. You take that as a loss versus looking at, okay, well what could you have made if you know 500 cars came through? 

Joe: Well, very true. And then from a management standpoint, you can look at it as, yes, your people have to do their jobs and you're making sure they're doing their jobs, but what are you doing to encourage.

your staff [00:15:00] to think outside the box a little bit and say, you know what? I think it's a good idea if, every hour and a half or two hours, I just check the drive through, make sure that clean or we clean it. if there's, cleaning, cleaning the place, you know, early, like, or if, if, uh, a whole bunch of people were there and then left and the place kind of looks a little, you know, restaurant looks a little dirty or your place looks a little dirty, you know, just stopping what you're doing and running out and have somebody make sure that the chairs are all pulled back and, put in and, you know, all of this little stuff.

It sounds silly, but you never know. what your opportunity costs of people not coming in is another thing, by the way that I'd like to bring up that's related to this is, um, and I'm gonna use myself going back to high school, I know in the 18, 18 hundreds. But is this still 

Cristina: relevant, you think?

Yeah, 

Joe: it is. To 

Cristina: life today? 

Joe: No, because when I worked at Carve, right, I'm a high school student. We closed at 10 [00:16:00] o'clock at night, right? But guess what? I would start mopping the floors if there weren't people there at nine 30 and I would be, you know, I would empty one of the machines 'cause I wanted to leave as soon as I could.

How much business did that cost the business if people were, let's say, going to come in for ice cream, but the chairs were on the table upside down and seeing me mop the floors 

Cristina: Totally. 

Joe: They're not gonna come in. 

Cristina: You were a problem. 

Joe: I was a problem. You were 

Cristina: a real problem. Yeah. But that's also true because 99% of high school students are just thinking of, get me outta here.

You know? Well, and, and it's, I wanna go enjoy my weekend and Well, 

Joe: or I have school tomorrow and it's 10 o'clock at night. Right. And I want to go home and I really don't want to be bothered with a customer, you know, coming in. Right. But it wasn't my business, you know? So my point is, I, I would get kind of in trouble if I tried to put overtime in for whatever the boss would say, you know, I don't [00:17:00] understand.

Why did you leave at 10 30? Why did you leave at 10? You know, you follow. So part of it was, I. I didn't want to, I knew I wasn't gonna really get the overtime. 

Cristina: But this is also a perfect, perfect example though, that in that business, right? Yeah. You have options as a business owner. them penalizing you for the overtime, which would've cost what you were paid by the hour paid nothing.

The like where you paid $2 an hour, so whatever it was, right? Yeah. Whatever it was, right? They were pen. They wanted to penalize you for overtime for putting in overtime. Which means no, you should be out of here by 10 o'clock. 

Joe: Mm-hmm. 

Cristina: Which means you need to do whatever you need to do to get outta there by 10 o'clock.

Joe: Yeah. I had the floor clean, the counters, I had to clean the ice, ice cream machines, which means I had to empty them. So when people, even if people came in and said, you know, I'd like a vanilla ice cream, whatever. Oh, I, that machine's closed. I only have chocolate. So, you know, think about this. You know, so if you were, 

Cristina: if, if the owner of Carve that you worked for had encouraged you and said, Joe.

when I say we close at 10 [00:18:00] o'clock, I want anyone who wants to get ice cream to be able to come in and enjoy their ice cream until we will serve. The last person is able to walk in the door until 10 o'clock and they should have a good experience that doesn't smell like. Bleach. Yeah, exactly.

And you shouldn't be like, I can only do the hard serve now I can't do soft serve because my machine is no longer working. Correct. So if, they had said to you that is what we're trying to drive, we close the doors at 10 o'clock and whoever is in there until 10 at 10 o'clock is able to get ice cream and encourage you that if you need overtime to be able to make sure that you have hop happy customers that are coming in through there until you close.

That that's what you do. Well, you may have had a, a very different approach to how you handled things as the employee. Right, 

Joe: exactly. And this is an example of what we're talking about here, 

Cristina: and I think the, the big thing for businesses, right, is recognizing that people have an irrational fear of failure [00:19:00] versus, kind of the, the unknowns.

People only see what's in front of them, right? The things that are, are visible and that they know. So if people have an irrational fear of failure and an irrational fear of the unknown, then as business people, we need to create an environment where people feel safe and empowered and that there's not a risk of the unknown.

People feel safe and there's a kind of like a. A celebration of failure if it's failing forward. Mm-hmm. So people like I, I think like that fear-based culture is one of the worst cultures. In my opinion, to foster an environment where you're driving creativity and finding those new strategic opportunities that are gonna drive the business forward in the long term Right.

And create those opportunities that are, are way more impactful than whatever you save in, you know, [00:20:00] not losing in the short term. 

Joe: Correct? Correct. I, 

Cristina: I had a meeting with a marketing organization, For, for a large, pharmaceutical company. Several years ago, and we were talking about, you know, uh, my company sells all kinds of graphics and marketing services, and we were talking about some of the different things that they do to support their sales field and the way they market themselves.

And you know, what's allowed, obviously within the realm of regulation for a company like theirs. And I. Was so inspired by this marketer because we were talking about things and this gentleman said, well, we have, I'm gonna make up a number, 20% of our budget that is. Meant to take risk and they have allocated that part of their budget for, and, and they encouraged all of the people on their team, like they actually have budget that is there for them to basically squander, right?

Mm-hmm. And I don't mean squander, it's not squander, [00:21:00] but it's basically it was their, for them to take risks, calculated risks. Sure. But it was kind of like this extra like, okay, we're gonna put, you know, 10 to 20%. Of our budget towards taking risks and doing things that you can't prove out. Mm-hmm. And Right.

You know, and there was no harm, no foul. Okay. You wanna try a new marketing tactic and it completely freaking bombs. Fine. It was part of that 20% and, and we've allocated that because they have found that if you put enough of that towards people just doing things that are innovative, different and trying things that are new, they found enough things that really hit that, then they could move into that 80% that's right of their budget.

That's for the things that should be resident and that. Consistently, consistently hit, right? So I, I think those are the kind of things that, as you think about your business, how can you encourage. Y [00:22:00] yourself and the people that are there, uh, working in your business to follow that same mentality and recognize that, yeah, we encourage you to think outside the box, take risk and, and put us in a position that we're gonna find those next, those next strategic advancements.

Joe: Mm-hmm. That's right. And, and of course, and along with that, staying with the first, you know, part of the, you know, the story about the lights is to, is to discipline. That person who forgot to put the lights on, you know, in the same way and not, not in the same way. Like fire them, but not fire 'em. But, but again, you know, say, you know, that was, you cost us money, you know?

Yes. You didn't steal money from us. You're not dishonest. But you can't forget to do things like that and flip it on a positive and say. You should be looking at every opportunity. Everything you do should be looking at how I can enhance the revenue. And you know, yes. Some of you [00:23:00] listeners may be saying, all right, well, all right, you're talking about putting the lights on on a restaurant at night.

Okay, fine. That's an example. That's just an illustration of what else is your business doing that is kind of like the lights at a restaurant at night that are not on. Yeah. What are you doing? Just take that analogy and be creative with it. 

Cristina: Yeah. Like what are, you know, 

Joe: it's the same as, you know, mopping the floors at nine 30.

When you close at 10, what is the message you're sending your customers with? You know, the chairs up on the tables and you know, some high school kid moping the floors. What are you saying to your customers? You're saying don't come in. Mm-hmm. What are the lights out on the thing you're saying? We're closed.

Don't come in. Now take that to your business and think about the little things Yeah. That are telling your customers, I'm not open. 

Cristina: Yeah. And in, and I think as you know, there's, there's budgets, there's, you know, in some [00:24:00] cases you're responsible to shareholders. Really think about, what are the short term activities that you take, like when you decide to cut a marketing budget or to, take sales people out of your organization, when you decide to. Minimize an investment into those areas that are specifically there to drive growth. Like really think about what is the long-term impact Exactly.

Of things like that. 

Joe: Exactly. 

Cristina: It doesn't hurt that I work in sales, so encouraging everyone to, no, but I invest in sales. But having, having the account's experience, 

Joe: it, you know, the, you, you have the people like me, some of the accountants, and again, not me personally, but the accountants or whatever saying.

look at this cost. You know, we're spending too much money on this. It's easy to say, if you don't analyze, what is the cost of not doing that? 

Cristina: Right. Right. 

Joe: And it's just like, you know, I, uh, uh, in the stock market, if you're gonna invest, [00:25:00] well sure, I'm giving, I'm buying stock in a company that's a cost.

Right. And you say, well, it's an investment. Yes. Now some of the investments go down and I may have lost money, but some of them go up much more than they go down. You know? And your point is, if you are intelligent about it, then you're making more money by putting money in, even though you, you don't have a cost.

And that's the idea, is look at what is happening. That is basically. Having your customers, whatever they are. Send their money elsewhere. 

Cristina: Yeah. So, and think about those opportunities. 

Joe: Yeah. 

Cristina: There is a couple, um, when you think about businesses and you think about the longevity and where, where things last, you know, like, that whole old adage of Netflix and Blockbuster, and for good analogy, some people probably don't even know what Blockbuster is anymore.

Right. You know, it's not a, not a household term for people that are probably what, under the age of. [00:26:00] 35. I don't know. Ish. Yeah, I don't know, but Netflix. Didn't kill Blockbuster. Right. Blockbuster failed to innovate and Blockbuster failed to see the opportunity in front of them for digital. Mm-hmm. So in some cases, you need to look, we need to look at our businesses and, and decide like, okay, what are the things that I need to be thinking about right now?

Instead of taking cost out and saying, okay, we're gonna. Stock less videos right now. Uh, if they had said, let's invest in how we digitize and how we make things available, then, you know, blockbuster could have been a brand for the ages. Mm-hmm. But it went the way of a dinosaur because it failed to see the opportunity in front of them.

That's right. And they were too focused on, you know, remaining as they were taking cost out. Being more efficient and didn't see the change that was right in front of them. 

Joe: Right. 

Cristina: So it's little opportunities, it's big [00:27:00] opportunities. But, I think like the whole point of this episode was just a conversation around like, how do we open our eyes and see some of those opportunities that are in front of us when sometimes it's so easy to just count what's super visible and Right.

You know? Very good. Obvious. 

Joe: Excellent. Good job. Yeah. Thank you. 

Cristina: Yeah, it was, uh, a fun one to do together. Yes. Appreciate listeners. Hopefully you enjoyed it as well. I did. Um, I'm thinking about where to invest here. I'm thinking maybe we buy better beans for the coffee. I don't know, dad, 

Joe: or, or your mimosa needs maybe like, instead of my 

Cristina: laca, we'll just start using VU in the mimosas.

Joe: That's up to you. 

Cristina: Invest in higher quality champagne and Prosecco, and then maybe, my ideas will be better as we go through the podcast. 

Joe: Okay, listeners, we could, we could [00:28:00] get your help on that. I think that would be helpful. 

Cristina: This is a ter terrible idea. Maybe we'll edit that out. Maybe not. But anyway, listeners, thanks for being with us.

If you liked what we shared, please follow. Share it with a friend if you think this is something that they could benefit from. Mm-hmm. And, uh, as always, send us ideas. If there's something that you wanna hear about, if you wanna be a guest, let us know. 

Joe: Got it. Wherever you are, whatever your story. Thanks for spending time with us this morning now.

Go and make a difference in your world.

Nice. Nice job. Why do melons have weddings? 

Cristina: I thought you were, I was like, this guy's off his game. Why dad? 

Joe: They can't elope.

Cristina: Oh boy. 

Joe: Sorry.

Cristina: See you all next month. 

Joe: Thank you.