Rooms and Runs - Alignment 3.0

Rooms and Runs – Alignment 3.0

By John Kennedy

As we continue the theme of Alignment in 2021, here are a few more thoughts I would like to add to the discussion in the month of May.

Let’s consider the big three pillars of any retail shop—average transaction, number of transactions, and customer experience rating. Studies show that there is a direct correlation (read alignment) from the customer satisfaction metrics and the average transaction metrics.

“Companies with a customer experience mindset drive revenue 4-8% higher than the rest of their industries:” Quote from: "50 Stats That Prove The Value Of Customer Experience”. by Blake Morgan: Forbes Magazine

As a former hotel executive, we referred to this as "yield management.”

If I have 100 hotel rooms at my property and price to sell out (100% occupancy) I can drive "number of transactions" by offering a $79/night stay.

Outcome: 100% occupancy = $7900 in revenue. Not a bad day in the marketplace!

So, if we discount our products to drive transactions, I may see my sales jump, but I can bet the average transaction and customer experience will drop as a result. Too many people at one time buying a lot of discounted stuff…Squeeze one and the other two are affected.  

Also, I now have 100 rooms to clean and an elevated sales/labor ratio. Meh!

So, let's go for an $89/night price point.  I now drop to 95% occupancy with a revenue outcome of $8455. Less rooms to clean, better revenue, improved guest experience and lower labor/sales ratio. Not a bad outcome.

Hmmmmm...let's try one more time and see how we fare.

Let’s shoot for a $99/night rate. Occupancy now drops to 90% with an outcome of revenue at $8910. The sweet spot!

Higher transaction, higher sales with less people which allows a better customer experience and lower labor/sales ratio.

Now maybe I get greedy and push it.

$109/night room rate which now impacts my occupancy (transactions) because my value proposition is not aligned to my pricing.


I drop to a 75% occupancy, reviews that state I'm over-priced, reputation damage that may take a while to recover, and revenue that is now at $8175. Should have offered breakfast and a wine & cheese reception on check in!

Higher average transaction, with less people and less revenue with a poor customer satisfaction rating.

One thing that Covid taught us (among many) is that when we were forced to focus on the number of customers allowed in your garden center, it uncovered some flaws in your business model while at the very same time highlighted some opportunities to align your value proposition, drive customer experience, increase your average transaction, and accelerate your revenue.  

Finding your sweet spot is a constantly moving target…and being nimble and quick enough to adapt in real time (or as close as you can to real time) is the key to maximizing the extremely precious and limited commodity of the number of days in the year.

Miss a few here and there over the course of the year, and that adds up to a lot of missed opportunity (read revenue).

As I watch baseball again this year (I love the game!!) and hope to get out to Orioles Stadium soon, the one thing I am always surprised about is how teams of both divisions play better the closer they get to the pennant race. Early games in April and May are one of 162, so if you lose one or two, no big deal.

As you pass the All-Star break and the boys of summer begin to hope for cooler weather play, every pitch, every “LOB,” every hit counts like there is no tomorrow. Nothing more exciting than the ALDS!!

We can learn a lot from baseball, and we can certainly “change up” and align the big three batters in each inning of the game—average transaction, number of transactions, and driving an exceptional customer experience!  

Find your sweet spot…and swing for the fence in May and beyond!


Want to discuss a Team-Building opportunity with John Kennedy? Call or email him!

John Kennedy
[email protected]
Cell: ‭443-605-7095

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John Kennedy is a speaker, author and strategist and resides in Northern Virginia with his wife Souny.  John is a Service Provider to The Garden Center Group focusing on strategic planning, accelerating sales teams, and creating a customer service culture.

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