Scrooge McKiwi

Why is it so many celebrities claim they were ugly teenagers? For some of us, those ugly teen years are as good as it gets and it’s the same for many kiwi businesses. It’s rough seeing them stuck in the ugly duckling stage despite huge innovation and working excruciatingly hard.

What holds them back from becoming business superstars? We think it’s got a lot to do with Scrooge-McKiwi-syndrome. Scrooge-McKiwi is our pet name for those time stealing customers who’re so intently focused on saving every little cent they fail to see the real cost of cost cutting:

• Cutting costs isn’t a competitive advantage – anyone can do it.  And if everyone does it, It’s simply a race to the bottom.  Who wants to scratch around with the turkeys when they can soar with the eagles?

• Cost cutting doesn’t grow businesses. At most it’ll gain some efficiencies but only until there’s nothing left to cut. Homeless people are cost cutting masters.

• Relationships grow businesses. Cost cutting damages relationships. Do you go the extra mile for a customer throttling you on price?

• The cheapest are rarely the best and often cost more. Just look at all those cheap leaky homes being rebuilt or the tax savings we find when when clients come to us after breaking up with their cheap accountants.

• Being cheap usually increases risk. The best staff are expensive because they generally make less mistakes, are faster, keep customers happy and need less training.

• Cheap prices attract problematic clients which destroys productivity and profit.  Losers bring winners down.

• Time spent cost cutting is expensive. Isn’t it more productive to focus on growing revenue?

• New Zealand doesn’t have the volumes to compete on price alone.

• Cost cutting drives everyone’s wages down. Cost cutters say they do it because they’re not paid enough but it’s cost cutting bringing pays down.

And remember this article is aimed at those crazed out-of-control cost cutters. Regularly fine-tuning your expenditure budgets is “O for awesome”.

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