Profit from Late Fee Frustration
I just recently signed up for Hollywood Video’s MVP program. For a set fee per month, you get to check out 3 movies at one time without paying for them. Only if they’re eligible for the MVP program, of course. Which eliminates many of the latest ones. (Our store is the only store in the nation that gets it cheaper than everyone else because the national headquarters for Hollywood Video is here in Wilsonville, right down the road from where I live. I guess they want to be neighborly. Whatever.)
Anyway, it’s a great deal if you have youngins who like to watch the same thing over and over and over. However, it’s ONLY a good deal if you remember to bring the stinking things back in time. If not, you pay for the rental of the video for the next 5 days, whether you like it or not.
I came across my latest idea because of the HEFTY late fees I incurred recently. I was so pissed about them, I was determined to think my way into a business by solving this consumer problem. Lesson… whenever there is something in life we find unpleasant, there’s ALWAYS a potential business there somewhere.
So I was really motivated to think of a way to make money and at the same time reduce Hollywood Video’s cash cow, called "late fees."
Here’s something. As with all my ideas, I’m sure it will evolve and morph the more I think about it. Provide a service to people in your town for picking up their movies the night they are due and bringing them back to the video store.
Just do a nightly run along a pre-planned route circuit in your town. Sign people up for your service by putting stickys on their car while it’s parked outside the local video stores. (Be careful with this. This is a guerilla tactic as you will be told not to do it after a while.) But you could also go door-to-door in middle class neighborhoods, putting stickys on their doors, as well. Keep your customers geographically grouped so as to be able to do your nightly run quickly.
After someone signs up, all they have to do is put their video(s) out on the doorstep in a mutually agreed upon place on the night their movie is due and you can pick it up and return it for them while on your nightly run. Each time you do this for them, they are charged a flat rate of $3, or something like that. Regardless how many videos they are turning in. Your late fee is typically $3.75 per video. If you have 3 videos, that adds up. Not to mention the convenience of not having to get into your car and drive down to the video store in the middle of the night. Heck, you’d have people using your service not only to save on late fees at the last minute, the night their videos are due, but also people who just want the convenience of not having to worry about returning them physically.
There’s a lot of details and numbers that would have to be crunched on this idea. But that’s what it is at this point, just an idea.
Some thoughts… you could have them keep the light on their porch if they have a video out so you can do a quick drive by without having to get out at every house. That would be crucial from a time standpoint. You’d also want to make sure they put their videos out by a certain time so you can be sure to catch it. There’s even an online service that will allow you to place a text box on your website where people can type a message and send it to your cell phone via SMS messaging. You could save a lot of time by requiring that your customers send you a text message by going to your site (make it REALLY simple for them to accomplish) and typing their address or some other prearranged code so you can know that they are ready for a pickup.
I could go on and on with little improvements on this. But I’m sure my smart audience gets the drift on the idea. Solve people’s problems and you’re in business.
Oh, and if Hollywood or Blockbuster were smart, they’d JOIN you and support your business by advertising your services in their stores. But, of course, that’s not what big businesses do. They are in business to HIDE stuff like that from you, counting on your laziness and ignorance to continue to fill their coffers with sideline profit centers like late fees. It’s just so short-sighted.
But when big businesses are short-sighted, opportunities are waiting to be discovered by those of us that want to solve customers problems and not create them. 🙂
Now go make a net profit. (That’s my new sign off… kinda like Dr. Laura’s, "Now go do the right thing.")