Give and Take Ratios
G&T Ratios

There are at least two types of G&T Ratios

1. The ratio between cost, and value received. Thus, a ratio might be 100/25/70. Average labor cost plus a 25% mark-up on parts and the customer receives average service scored at 70. A corporate, or radically optimized business, might show much higher ratios. These companies typically pay large sums of money for advertising as opposed to word of mouth advertising an average business might produce. For example, there is an emergency call to a plumber. The plumbing company is highly professional and it employs top notch tradesmen. Here the journeymen have an average experience in the trade of seven years of residential service. They are prompt, courteous, competent but expensive. The ration might even go as high as 300/100/80. The 80 represents a theoretical limit of value. If the average cost of a plumber is $100 an hour with a 25% mark-up on parts and the company charges $300 and a 150% mark-up on the wholesale cost of parts it difficult to say there could be a 100% value to the average person. To some homeowners in need any ratio works as long as the plumbing gets fixed. Here 100% is possible. But this is about the average homeowner. If a faucet costs $40 wholesale and the plumber charges $100 retail, plus an hour and one-half for labor, or $450 then it difficult to see a high valuation inherent in the business transaction costing $550 to change a simple faucet. The average cost of the service would be $175 if the owner had shopped around. When the ratios get to high the situation becomes one of gouging the customer.

The above example showed a 300/150/80 ratio and the service was excellent. But, for the ethically minded a 300/150/20 ration give cause for some concern. These types of ratios may indicate fraud and or incompetence at work. The 20 given value is derived from the fact the faucet got fixed but the tradesmen were late, messy, unreliable and a hassle to deal with at every turn.

2. G&T: The ratio between giving consideration and receiving consideration. When customers deals with local business, even chain drug stores, there is give and take when they have a complaint. This goes beyond an established return policy that most business have. It means the degree with which a business will sincerely work with a customer to iron out problems, and give in if they have to; even if the business loses a little money. It means the business listens to its customers. In other words, is the business extending goodwill? A large corporation or radically optimized business is too stingy to extend goodwill; every cent counts to the company's management. Businesses that have a low G&T ratio are difficult to work with and can leave the customer emotionally drained dealing with them.

• Radical Optimization
• Gouging
• Insincere Dealing