Wales

Lessons from BBC TV’s “The Apprentice” – Series 16. 6. Wales

Or, more particularly, perhaps ‘Tour’ would be a better title for Series 16, Episode 6 in BBC TV’s “The Apprentice”. But Wales it is, and with that a dark cloud seems to loom large over the proceedings from the start.

It’s another of the familiar tasks in The Apprentice’s familiar canon: organise a day trip for paying guests: The team with the biggest profits wins.

The contestants seem well aware of the Scylla and Charybdis between which they must navigate: Spending too much eats into profits. Spending too little disappoints guests who can ask for refunds (which risks profits). Charging too much squeezes takings, charging too little squeezes profits.

The art is to come up with something with relatively higher appeal than cost. That way you can price to sell and still retain earnings. That idea of “relatively higher appeal than cost” is exactly what customer value is about – what is it that adds value for the customer, yet costs you little to provide? The more that you can do yourself avoids expenditure, but the more you subcontract to professional providers likely enhances quality. Hmm. Blindfolding and tying yourself to a mast wont do – you have to make choices.

One team chooses a train tour and whisky tasting, another get a zipwire and mine trip plus cheese tasting. But both teams fail to manage cost by failing to negotiate the best cost price from the operators of the train and mine tours. Both place the pricing in the hands of the provider allowing them to anchor at a high price from which you can then only negotiate downwards a shade. You feel happy for eroding their price a bit, or for talking up their offer of a 1% ‘commission’ to 7%, but in all cases the providers are chuckling – they were prepared to go much lower. As we often see, maybe the people who should be winning are the sellers, not the contestants.

Maybe an alternative would be to start from the price to sell. The price to sell is the maximum you can get for the required number of participants. For a day trip the teams estimate this around £60-£80 and it looked like they had around 16 guests. So you know your budget, if you’ve got these figures right, and the maximum you can possibly spend is that budget minus your target profit. Say that’s a £1200 budget and you target 50% gross profit. That means you can’t spend more than £600, and you have to negotiate some good deals with your providers based on reduced group rates, say, £500 for the main event and so on. But of course we didn’t see any cost visibility in the teams’ planning and instead it’s all about ‘try your best’ at every point.

Each team treated us to a cringing pratfall in attempting to ‘do it themselves’. One with a dismal narration of the train tour, the other with a… well, a dismal narration of the mine tour. But one team had the zipwire – even though they failed, curiously, to really sell hard on the basis of this key feature of their offer – and an energetic leader too, keeping spirits up, and they looked like the sure winner. Uh-oh, the other team had whisky and all you had was cheese. They had the ace. Game over.

There were other sideshows along the way such as not understanding that a ‘negotiated’ commission on product sales simply couldn’t mathematically be attained, yet the true story here was all about visibility of costs, price to sell, negotiation, sales and execution. And common sense – whisky trumps cheese, silly.