How to trim your margins (without sacrificing your brand’s mojo)

But we’ve got to be smart about it.

All too often, businesses lose sight of the full picture and push their brand into the background the second they need to save costs and improve revenue. They jump on the easy fixes, like raising prices or cutting headcount. These changes are almost immediate, and they look great at the bottom of a finance sheet. But they can impact the brand enormously, not to mention the customer experience.

They might not see it straight away, but slowly (and surely) these brands erode, resulting in a loss of customer loyalty, trust, and the very revenue they aimed to increase.

So how can you trim your margins without sacrificing your brand’s mojo?

Make or break your brand promise

Your brand is the promise you make to your customers. What quality can they expect? What service can they expect? Your brand flows through every part of the customer experience. That’s why it’s impossible to separate a strong brand from strong performance. Yes, it’s a promise of value. But, more importantly, it’s also a promise of consistency. People come back to the brands they trust the most. But they aren’t afraid to abandon them when that trust is broken.

Just look at the high street. Take Liverpool One, a state-of-the-art shopping area, opened in May of 2008, with two major physical bookends: the then-giants of department stores: John Lewis and Debenhams. Cut to 2021 and Debenhams closed its doors, leaving M&S to fill the space left behind (and John Lewis facing its own troubles in the years since).

How could a retail superhero collapse so quickly? Well, asset stripping led to heavy debts and little or no cash to invest in customer experience, either in-store or online. As that customer experience collapsed, the Debenhams brand diluted until its offering became totally stale – stale enough to wipe it off the high street.

This story isn’t limited to retail. P&O Cruises partnered with a load of different airlines so their customers could reach their dream destinations as quickly as possible. What a great idea! But who were they flying with? Virgin? BA? Tui? When it was time to choose an airline, they skipped the tried-and-tested partners and went for the little-known Maleth Aero. Unlike the others, Maleth Aero didn’t have premium seating or in-flight entertainment.

Just like that, the promise of the luxury experience was broken, and the trust customers had in P&O was obliterated. They canceled in droves. In other words, when the brand suffered, so did the bookings.

Striking the balance

I spent over 20 years working in the manufacturing sector, from the mid-90s to early 2015. We wanted what every successful business wants: to keep the promise we made to our customers. For my company, that meant making the highest quality product we could, as cheaply as possible. Maybe that sounds impossible – how can you produce a high-quality product (or deliver a high-quality service) while keeping a tight grip on costs?

Well, it is possible.

There are a ton of organizations that have successfully struck this balance. It just means spending as much time understanding the people behind the processes, as hovering over spreadsheets with a red pen.

Getting streamlined

How can you do this? It’s time to streamline your operations.

Start with merging operational insights and customer and colleague chatter to pinpoint problem areas. Pulling everything together will help you map out your process and customer journey, so you can understand how things should work, versus the reality.

It’s important to deliver the right help where it’s needed the most. Identifying pain points is great, but now you need a solution for the root cause to stop the same problem happening again.

Take Revolución de Cuba. The restaurant chain’s staggeringly popular Bottomless Brunch was eating into prep time for dinner service, leaving teams overstretched. The easy fix would have been to cut back on brunch options, but that would turn off their customers. Instead, the brand mapped out which processes worked and which didn’t. The result was a ‘definitive brunch guide’ that got things running smoothly without having to take away a single option.

So: find that balance. Discover the sweet spot where you can deliver on your promises without breaking the bank. It's not about cutting corners or taking shortcuts. It's about streamlining operations, understanding the people behind those processes, and getting to know your customers. By aligning your operations with their desires, you can create a winning formula that keeps your margins in check without compromising your brand's strength.

Don't settle for short-term gains that will haunt you in the long run. Invest in your brand, deliver on your promises, and watch the rewards roll in.