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How to survive a new competitor
A couple of months ago I took a phone call from a cleaner who was nearly in a frenzy. The reason for his concern? You guessed it. Someone’s opening a cleaners across the street from his plant.
It’s to be a large 4,000-square-foot state-of-the-art free-standing building with every bell and whistle you can imagine and, to make matters even worse, the guy’s a discounter… a deep discounter.
“What can I do?” the caller pleaded. “He’s gonna kill me!”
At that moment, my thoughts drifted back to a story I heard while attending a supermarket conference in Baltimore. It’s an interesting story and I’ll give you the short version as it clearly illustrates the point I’d like to make.
Some years ago, a large food store chain saw an opportunity to expand their business into upstate New York. It was a nice little town with good demographics and only one grocery store. We’ll call it Dominick’s. It was a small store… nothing fancy, but it had been there forever and the big chain decided it was time to go in and take the market.
They built a beautiful food store. It was huge, fully automated, and stocked with everything you could ever dream of filling your basket with… and then some. The grand opening was exactly that — grand, complete with fanfare, incentives and give-a-ways, but the turnout was lukewarm. And the results the second week were no better. In fact, they were worse. Obviously, there was a problem, but what was it?
The manager decided to find out. He conducted a phone survey of people who had visited during the grand opening but had not come back. One by one the people opened up:
“Dominick sent my mother flowers when she was in the hospital. It meant the world to us. He’s like part of our family now… I’ll never stop doing business with him.”
“When my father died, Dominick sent me a very nice food tray for the wake. I can’t leave him and come to your store. It just wouldn’t seem right.”
“On my daughter’s birthday, Dominick sent a birthday cake with all the trimmings — FREE. It was the best time she ever had. We love the man.”
One after another, the customers heaped praise on Dominick. They also said that they had enjoyed their visit to the big supermarket but that in the future, they would continue to do their shopping at Dominick’s.
In time, the giant food chain admitted defeat, packed their bags and abandoned the beautiful facility. In fact, they turned it over to Dominick.
So how did Dominick survive such tough competition? What did he have that the big guys didn’t? The answer is simple…
Dominick had credibility.
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Not only is credibility a key factor in holding on to the business you already have, but it can also be leveraged to bring you more business. Lots more. Here’s why.
People are creatures of habit. And that includes your own customers. Once they discover a drycleaner who meets their needs and gives them the kind of service they are looking for, they begin to get comfortable.
Sometimes it’s very difficult to move them out of their comfort zone. And that’s what happened in the case of the big grocery chain.
The people in town were very comfortable doing business with Dominick. Of course, Dominick did everything he could think of to earn their business, and in so doing, he strengthened his credibility with them.
Not only are customers comfortable doing business with someone they know but they are also skeptical of someone new coming into the market. A new company that is unknown and has no credibility with the prospects can literally go broke trying to educate, persuade and advertise for the business.
A new cleaner that opens across the street from one that’s been in business for years will almost always be able to pull in traffic at grand opening time. But will the new guy be able to hold these visitors and turn them into repeat customers? Sometimes yes. In other cases, however, it’s almost impossible because of the established cleaner’s credibility.
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As a cleaner, you should be doing everything possible to build the credibility of your business. Why not do some of the things that Dominick did to tie his customers to his business? Little things like getting to know your customers by name goes a long way to establishing your credibility. You could send out birthday cards and even surprise some customers with a display of flowers on special occasions. Get creative and do it on a regular basis. But the time to establish credibility is not when a competitor is about to move into your market. By that time, it’s too late. You have to start the day you open your doors for business.
Years ago, while doing business with a guy named Bill Myers, I learned an interesting concept called the Out of Box Experience or OBE for short. Bill feels his customers should always get more than they bargained for, and for this reason he always packs something extra into every box he sends out… something that will make his customers say, “Wow!”
I remember opening a box and seeing a nice calculator right on top of the order. I hadn’t ordered the calculator, but attached to it was a note from Bill saying… “Here’s something to help you calculate the extra profit you’ll realize by using this new product. There’s no charge… it’s my gift to you.”
There’s a Biblical principle that says, “Give and it will be given unto you for with the measure you use it will be measured to you.”
The principle is that when in life you give more than is required, you will get more than is expected. On the other hand, if your goal in business is just to get by, that’s precisely what you’ll do.
Like it or not, when you entered the cleaning business you freely chose the path of servanthood. Your job now is to give service… the best service you possibly can. And true servanthood asks the question “How can I astound the people I am serving?”
Well, you have many opportunities every day to answer that question. Why not strive to go beyond what is required to that which will delight. Always give what is reasonably expected… and then some!



Bill Bishop has been a consultant with the Golomb Group for the past 12 years, designing marketing and promotional programs for drycleaners. He can be reached at the Golomb Group at (800) 679-5856 or by e-mail at billbishop@golombgroup.com.
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Bill Bishop
OnMarketing
Bill Bishop