Journal: When High-Cost is GOOD

Commerce, Commercial Intelligence, Cultural Intelligence

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Cost reduction for high-end markets

If you sell at the top of the market (luxury travel, services to Fortune 500 companies, financial services for the wealthy…) you might be tempted to figure out ways to cut costs and become more efficient.

After all, if you save a dollar, you make a dollar, without even getting a new customer.


The goal shouldn't be to reduce costs. It should be to increase them.

That voice mail service that saves you $30,000 a year in receptionist costs–it also makes you much more similar to a competitor that is more efficiently serving the middle of the market.

Go through all the ways you serve your customers and make them more expensive to execute, not less. Your loyalty and your market share will both grow. People who can afford to pay for service often choose to pay for service.

Phi Beta Iota: What Master Seth is not making explicit is that HUMANS costs more than devices, and the REASON humans cost most is because at the high end, HUMANS offer creative adaptability, instant understanding of nuances, emotional calibration, and a deeply HUMAN connection to the client.  Call centers are the high end of the low end.  Capitalism took a wrong turn in commoditizing humans and treating labor costs as something to be reduced.  It is the human web of knowledge that undergirds the advance of civilization, NOT the “things” that we buy and trash.

See Also:

Review: Philosophy and the Social Problem–The Annotated Edition

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