The Second Rule Revisited

Regular readers of this blog will recall that last year I mentioned the Second Rule of Business: "Do Not Annoy The Customer." In a later post, I also mentioned the example of a restaurant that is not open when you want to eat there, which is actually violating the First Rule (“When someone comes to you and says ‘Hello, I would like to give you a lot of money now,’ you say, YES!”) as well. I was not, at that time, referring to the strange case of Jerry’s Famous Deli in Westwood Village, since the Jerry's episode had not happened yet. But now it has, and it mirrors the points I was making in those earlier posts to an almost eerie degree...

Jerry's is a chain of well-known, if not exactly "Famous" deli-style restaurants, one of which is located in Westwood Village not far from my office. It's too pricey for an every-day breakfast place (and the service is a little too slow), but we would sometimes go there when we wanted a big breakfast (on a day when lunch is going to be problematic, for example). It's also an excellent venue for breakfast meetings, and a lot of people use it for that purpose. Or did, anyway...

One morning we were going to meet someone for breakfast before work, and showed up at the Jerry's, only to discover that they were not open. A sign in the window announced that their new hours included an opening time an hour later. We were rather annoyed, but we managed to call the person we were meeting with by cell phone and divert the meeting around the corner to the cafe which has become our regular breakfast place (the one mentioned earlier this week, with the unlimited coffee refills). For the next few weeks we were amused to note groups of people standing around the entrance to Jerry's, some of them obviously quite irate, waiting for it to open or calling other people to move/reschedule breakfast meetings...

Yesterday we happened to go to Jerry's for lunch, and we ended up chatting with the woman who had been our regular waitress when we were having breakfast there. She confirmed that the shortened hours were a cost-cutting measure (because that hour of breakfast shift wasn't bringing in enough money), and that the company has also reduced the number of wait staff who are on duty during the remaining breakfast shift, to the point where she's sometimes the only person on the floor and her customers are having to wait for her to deliver food and drink orders for as many as 12 tables at a time...

The upshot is that in addition to losing all of their 7:00 am to 8:00 am business (because they're not open anymore), Jerry's has lost most of its 8:00 am to 10:00 am business because people are either annoyed by the shortened hours or by the lack of customer service during the hours they are open. At this rate it's only a matter of time before they lose their breakfast shift altogether and have to start opening at 11:00 am or 11:30 for the lunch shift...

Now, I'm not going to tell them this is a financial mistake until I see the books for this location; if they really were losing money from 7:00 am until lunchtime, these moves may make sense from that standpoint. I will only note that losing your entire breakfast shift in order to save money on one hour is stupid -- and annoying all of your breakfast customers is likely to have negative consequences for the rest of your day, as well...