STRAIGHT TALK
MARK BARNES: Avoiding a death spiral entails changing course of action
First and foremost, you have to face the facts. If demand for your products and services is declining, find out why
I was on kid duty on Monday and had to get different boys to different places within a narrow time frame. We barely had time to grab brunch. WhatsApps and SMSs were buzzing to co-ordinate the eat-and-disperse mission. We had to leave in time to meet the primary objective by 12.15pm latest. First choice was full, plus a 20-minute wait, second choice had a 15-minute queue, but third choice was practically empty, as were most of the other restaurants in the centre, where death spirals had already begun. We ate an entirely tasty, specialist meal. People rushed off to their various destinations as I paid the bill. I did a quick reasonableness test, and a cost per customer assessment (I know, I can’t help it), which showed that we were paying well above the going price for an equivalent quality meal in the centre, yet we were at our third choice, nearly empty restaurant. A classical death spiral. This restaurant, to maintain quality and margins in the face of declining client demand, had ...
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