CSPs, Sales and marketing

Starch or No Starch?

It started out as another typical weekend. I was running errands around town before heading off to EMC World 2016 in Las Vegas. Ah, Vegas. My favorite place to visit -- at least once monthly -- for the past 20 years. But first, I had to make sure I was packed appropriately. Again.

So I headed off to our local dry cleaner to pick up my travel wardrobe -- including the one business jacket that I actually own. That's when I ran into Larry Walsh. Yup, Long Island is a very small island. And Larry and I run in similar circles -- constantly seeing each other at super markets, movie theaters, concerts, political rallies... and our mutual dry cleaner.

On this particular Saturday the line at the dry cleaner was really long. So Larry and I made some small talk. I mentioned that I now pay a flat monthly fee -- every month -- to make sure my one business jacket is ready for travel every Monday. I really love the predictable model and the SLA (starch level assurances). If you've seen my business jacket you know how carefully I manage and maintain my attire. The only thing I take more seriously is proper beard grooming (twice daily; I'm Italian). But that's a blog for another time.

You Don't Say...

But that's when Larry weighed in with a slightly different view. He thinks our mutual dry cleaner -- and many like them -- will struggle to maintain profits. After all, he noted, I keep coming back to the dry cleaner with big demands for spot removals, button replacements, and other margin-killer requests.

At first I thought Larry was just trying to stir some controversy. Gradually, he raised his voice. And I raised mine. Heck, maybe I raised my voice first. I don't recall. I just knew this was a really important debate. Perhaps as big as the Pink Floyd vs. Rush debate that Larry and I had back in '88. (Please don't ask us about it; the settlement was confidential.)

But I digress. Back to the current story: The line of people at the dry cleaners started to listen in. Firemen. Police officers. Restaurant and hotel employees. All these folks from different walks of life. They had very little in common. Except for the fact that they all needed their uniforms cleaned and couldn't decide which payment plan to embrace -- one-time cleaning fees or monthly fees for unlimited dry cleaning. And besides, what's a fair price for that monthly dry cleaning service?

I started to get the sense that this debate could last for years. Perhaps from 2008 to present day and beyond. Finally, one person in the line grew tired of our bickering, and asked Larry and me to leave the store. We realized our shouting was rather juvenile. We both apologized to the store owner and the patrons, and we left. (But please don' call it an exit.)

That's when Larry mentioned that we still needed to settle the overall debate. So we grabbed some lunch together at a local cafe. Larry ordered a la carte. I ordered the all-you-can-eat buffet and had about 20 servings... a bit less than my usual consumption at this particular locale.

And then it started again. Larry mentioned there was no freaking way the cafe could survive with customers like me coming in and consuming their inventory of finely prepared imitation crab meat, boneless chicken wings, and soft-serve ice cream.

Really Larry? Must everything be a debate? I dug in and expressed the opposite opinion just because it's my natural response.

I told Larry that the cafe owners had surely examined their costs and developed a profitable pricing model. But Larry wouldn't let the subject die. He called the manager over to our table and started quizzing him about their rent (cost per square foot), labor and other costs. He was treading into dangerous territory. After all, aren't details like that best left unspoken? As the old saying goes: Where there's mystery there's margin.

Secret Cost Formulas... And That Jacket...

Larry poked and prodded and nearly got the manager to share the cafe's current financials and three years of audited annual results. But that's when my phone rang. It was my wife on the line... wondering why it had taken me four hours (so far) to pick up one jacket from the dry cleaners.

That's when I realized: I never did pick up my jacket from the dry cleaners. But at least I knew it was clean and paid for. I apologized to Larry, left lunch and headed back to the dry cleaner to get my jacket. As usual, my threads looked great. And oh how I love their all-you-can-consume cleaning model.

It's been about a week since that lengthy sit-down with Larry. And I gotta admit... I wonder if that dry cleaner is profitable. And I wonder if that cafe is profitable. I think both businesses can be profitable. Still: Larry, as usual, has raised some intriguing points.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.