8. Nine Strategies for
Business Success
• Adaptability • Loyalty
• Collaboration • Niche Marketing
• Customer Service • Perseverance
• Diversification • Planning
• Growth
9. Marty Beattie
Don Gallegos Steve Swasey Marty’s First Stop
King Soopers Netflix
Supermarkets
Jack Cummings and Allyson Myers Stew Leonard, Jr.
Bernier Mayo Lake Champlain Stew Leonard’s
Chocolates
St. Johnsbury Academy Supermarkets
10.
11. Bernier
Mayo
Headmaster Emeritus
St. Johnsbury Academy
13. “The board had already closed
the girls’ half of our boarding
department. We had boys
remaining in one dorm. The
question was when I came in
1981: Should we close the
boarding school?”
14. “The board had already closed
the girls’ half of our boarding
department. We had boys
remaining in one dorm. The
question was when I came in
1981: Should we close the
boarding school?”
16. “We decided we would do what only one other
school at the time was doing, Cushing Academy,
and that was recruiting overseas, especially Asia.
We decided to do that and the board bought it.
The board has always been enormously
supportive. And they bought our proposal that we
try to crack the international market and frankly
our private school colleagues all over northern
New England looked down their noses at us
because nobody wanted to do that.”
17. “We decided we would do what only one other
school at the time was doing, Cushing Academy,
and that was recruiting overseas, especially Asia.
We decided to do that and the board bought it.
The board has always been enormously
supportive. And they bought our proposal that we
try to crack the international market and frankly
our private school colleagues all over northern
New England looked down their noses at us
because nobody wanted to do that.”
18. Jack Cummings
Special Assistant to
the Headmaster,
St. Johnsbury Academy
19. “The growth in the 80s was
actually very quick. We went
from about 30 students to 125
students in about five years.”
20. “The growth in the 80s was
actually very quick. We went
from about 30 students to 125
students in about five years.”
22. Troy Kingsbury decided
to start a deer weigh-in
to provide a reason for
people to come after
foliage season.
23. “We take a digital picture of every deer and we
post it on our computer and put in on a slide
show. I wouldn’t post it online because then the
hunters could be at home and they could look at
it. We only have it on our computer and the
hunters say, ‘Did you see that buck that Jim got?’
They come in here and you have it going on a five
or ten second delay and that keeps them in the
deli where the food’s cooking and usually they
buy a beer or a breakfast sandwich.”
24. “We take a digital picture of every deer and we
post it on our computer and put in on a slide
show. I wouldn’t post it online because then the
hunters could be at home and they could look at
it. We only have it on our computer and the
hunters say, ‘Did you see that buck that Jim got?’
They come in here and you have it going on a five
or ten second delay and that keeps them in the
deli where the food’s cooking and usually they
buy a beer or a breakfast sandwich.”
25. Troy also helped the
town start a program
to have free bicycle
transportation in town.
26. “By next year our goal is to have
25 bikes with bike racks
throughout the surrounding
village here where we provide
free bikes for people to use to
get around town.”
32. “The stock market and bond markets are offering us a
tremendous opportunity right now. It’s not a reason to
panic or to be overly concerned. The activities of the
market over the last six months or so you could call it
a 20 percent off sale. Good heavens to Betsy. Quality
investments are available for a discount price and for
people who can be encouraged to think with their
heads instead of their hearts, they’re going to be able
to take advantage of this. And that’s what we try to do.
That’s what we always try to do. You are going to have
these opportunities from time to time.You are just
going to have to be ready to take advantage of them.”
33. “The stock market and bond markets are offering us a
tremendous opportunity right now. It’s not a reason to
panic or to be overly concerned. The activities of the
market over the last six months or so you could call it
a 20 percent off sale. Good heavens to Betsy. Quality
investments are available for a discount price and for
people who can be encouraged to think with their
heads instead of their hearts, they’re going to be able
to take advantage of this. And that’s what we try to do.
That’s what we always try to do. You are going to have
these opportunities from time to time.You are just
going to have to be ready to take advantage of them.”
34. Edward Jones’
Advantages
• Only one broker per office
• Don’t encourage customers to take on
risky investments such as options or
derivatives
• Existing brokers train new brokers
35. Marty Beattie
Owner
Marty’s First Stop
Danville, Vermont
36. Marty’s response to tough
times has been to adjust his
buying to respond to
customer demand.
37. “During the winter we try to run a lot of
in-store specials with different grocery
items. It depends on your wholesale
supplier that you buy from what they offer
to you. They’re all running quite a few
deals right now. They’re in the same boat.
They want to sell a lot of product also.”
38. “During the winter we try to run a lot of
in-store specials with different grocery
items. It depends on your wholesale
supplier that you buy from what they offer
to you. They’re all running quite a few
deals right now. They’re in the same boat.
They want to sell a lot of product also.”
39. Marty also tries to use
all his stores’ products
in a creative fashion.
40. “I grew up on a farm with a large family
and we were taught how to cook and how
to take advantage of a lot of things. I’ve
been very fortunate that way and know
how to make a lot of soups and lunch
specials. So, the consumer that comes in to
buy the tomato is getting the nice looking
tomato and the green peppers are in your
chili. If a steak has been around for a day it
looks great in beef stew.”
41. “I grew up on a farm with a large family
and we were taught how to cook and how
to take advantage of a lot of things. I’ve
been very fortunate that way and know
how to make a lot of soups and lunch
specials. So, the consumer that comes in to
buy the tomato is getting the nice looking
tomato and the green peppers are in your
chili. If a steak has been around for a day it
looks great in beef stew.”
44. Jay Parkinson doesn’t
accept insurance. He
sees people in their
home for the first
visit and then
communicates
through video visits
and email.
45. “I started my practice with
less than $1,500. I didn’t
have to be a slave to
anyone. I get to visit people
in their home. I get to have a
really good vibe. I have no
overhead, hardly
whatsoever. I charge $150
bucks and $140 of that is in
my pocket.”
46. “I started my practice with
less than $1,500. I didn’t
have to be a slave to
anyone. I get to visit people
in their home. I get to have a
really good vibe. I have no
overhead, hardly
whatsoever. I charge $150
bucks and $140 of that is in
my pocket.”
48. “It’s just natural for my
generation and younger to
communicate via text or
video online. That’s
hopefully going to be the
wave of the future. ”
49. “It’s just natural for my
generation and younger to
communicate via text or
video online. That’s
hopefully going to be the
wave of the future. ”
50.
51. Adam Burke
Senior Vice President
Customer Loyalty
Hilton Hotels Corporation
52. With 8 million active
customers, Hilton
HHonors program is
one of the most
successful loyalty
programs in the U.S.
53. “We’re the only ones that allow you to earn both
points and miles for the same stay among the major
programs. So you don’t have to trade off between one
currency or the other. And every time we research it
we find far and away that is the most compelling
earnings proposition you can give someone.”
54. “We’re the only ones that allow you to earn both
points and miles for the same stay among the major
programs. So you don’t have to trade off between one
currency or the other. And every time we research it
we find far and away that is the most compelling
earnings proposition you can give someone.”
55. “We may decide in a down market as we have in the
past to be more generous about how we retain
people in the VIP tiers because we recognize that they
may not be staying as frequently and if we apply the
same criteria we may lose some of that loyalty.”
56. “We may decide in a down market as we have in the
past to be more generous about how we retain
people in the VIP tiers because we recognize that they
may not be staying as frequently and if we apply the
same criteria we may lose some of that loyalty.”
60. After the Internet
bubble burst,
Keynote had two
choices: grow or go
out of business.
61. The company had a great
sales force and $40 million
in cash, but was losing
$20 million a year.
62. Gupta decided other Internet
companies in Keynote’s field
were cheap and decided to
grow by acquisition.
63. “Many of these younger dot-coms that were
funded well were now left to twist in the wind.
Their revenues were going down
and their prices were going down.
We ended up essentially buying about 15
companies over the last seven years and of
those 15 companies, 10 of those we bought
during the depths of the tech depression.”
64. “Many of these younger dot-coms that were
funded well were now left to twist in the wind.
Their revenues were going down
and their prices were going down.
We ended up essentially buying about 15
companies over the last seven years and of
those 15 companies, 10 of those we bought
during the depths of the tech depression.”
67. Mark Desrochers Matthew Burak
Which it sells
through a catalog
and on the Internet:
68.
69. Allyson Myers
Director of Sales and
Marketing
Lake Champlain Chocolates
70. “Generally, we’ve found chocolate to be
fairly recession-proof because it makes
people feel better, makes them happy.
There’s even some scientific studies that
have show the health benefits of
chocolate which has been great in the last
couple of years. People feel good and feel
chocolate is a good part of their diet.”
71. “Generally, we’ve found chocolate to be
fairly recession-proof because it makes
people feel better, makes them happy.
There’s even some scientific studies that
have show the health benefits of
chocolate which has been great in the last
couple of years. People feel good and feel
chocolate is a good part of their diet.”
72. “They make cut back in other areas but
they will probably still make room for an
inexpensive piece of chocolate. We have
seen a shift away from people buying
bigger gift boxes of chocolates to smaller
package sizes. They are changing their
buying behavior but they still are buying.”
73. “They make cut back in other areas but
they will probably still make room for an
inexpensive piece of chocolate. We have
seen a shift away from people buying
bigger gift boxes of chocolates to smaller
package sizes. They are changing their
buying behavior but they still are buying.”
77. “Wal-Mart is a great sell-
through company but they’re
not a great rental company, so
they never put all the wind
behind their arrow and that was
our extraordinary good luck.”
78. “Wal-Mart is a great sell-
through company but they’re
not a great rental company, so
they never put all the wind
behind their arrow and that was
our extraordinary good luck.”
80. “We do one thing extraordinarily well and
that’s all we focus on. Netflix changed the
way Americans rent movies. Before Netflix
you had to go to a video store to rent the
movies, you had to pay late fees, which were
punitive, and you had pretty crummy service.”
81. “We do one thing extraordinarily well and
that’s all we focus on. Netflix changed the
way Americans rent movies. Before Netflix
you had to go to a video store to rent the
movies, you had to pay late fees, which were
punitive, and you had pretty crummy service.”
82. Reasons for Netflix
Success
• Netflix offers 90,000 titles online. A typical
video store has 3,000 titles
• Fast turnaround - return movies today,
receive new ones in two days. Or order
movies through your computer and view
them immediately on your television or
computer
• No late fees
• Netflix will recommend movies for you
85. How do you compete
against a discounter like
Wal-Mart?
86. “Wal-Mart gets high marks for service. Quite frankly, I
don’t think it’s that good. Now, I’m probably jealous,
because they do a ton of business. But I got a store that I
live near, when Wal-Mart came in about a half-mile away,
our store was doing about $900,000 a week. We’re doing
$800,000 now, so we lost $100,000. But we’re still doing
$800,000. Don’t you think there’s a reason we’re still
doing $800,000? It isn’t price. But we do special orders,
we don’t ask questions on refunds, you don’t have to
show your receipt. Wal-Mart, try to take something back.
You got to show a picture of your first born, for god’s
sake. And people do it!”
87. “Wal-Mart gets high marks for service. Quite frankly, I
don’t think it’s that good. Now, I’m probably jealous,
because they do a ton of business. But I got a store that I
live near, when Wal-Mart came in about a half-mile away,
our store was doing about $900,000 a week. We’re doing
$800,000 now, so we lost $100,000. But we’re still doing
$800,000. Don’t you think there’s a reason we’re still
doing $800,000? It isn’t price. But we do special orders,
we don’t ask questions on refunds, you don’t have to
show your receipt. Wal-Mart, try to take something back.
You got to show a picture of your first born, for god’s
sake. And people do it!”
88.
89. Paula Crowley Lou Sachs
CEO President
Anchor Health Properties
90. They persevered
through two years
when they took no
salary, trying to find
new opportunities.
91. “Their predominate clients were health
care, mostly hospitals, and almost by
osmosis, by being there and hanging out
with them we became introduced to the
hospital business. I can remember one day
just thinking that there is so little interesting
work being done in health care what if we
took what we had been doing for all of our
development years in retail and think about
how we might apply it to health care.”
92. “Their predominate clients were health
care, mostly hospitals, and almost by
osmosis, by being there and hanging out
with them we became introduced to the
hospital business. I can remember one day
just thinking that there is so little interesting
work being done in health care what if we
took what we had been doing for all of our
development years in retail and think about
how we might apply it to health care.”
93. Today, Anchor Health
Properties runs some of the
most progressive Wellness
Centers in the country
Pavilion at
Doylestown
Hospital
95. “In 1989 my son drowned in a pool
accident. He was two years old. And that
was a devastating thing for my wife and I
and our whole family. And we had to
work through that tough time. And then
in 1993 my father went away to prison
for tax evasion and it really rattled the
whole business. It was a terrible blow.
Not only a blow to our business but a
blow to our image and everything.”
96. “In 1989 my son drowned in a pool
accident. He was two years old. And that
was a devastating thing for my wife and I
and our whole family. And we had to
work through that tough time. And then
in 1993 my father went away to prison
for tax evasion and it really rattled the
whole business. It was a terrible blow.
Not only a blow to our business but a
blow to our image and everything.”
97. “I don’t think I could have gotten
through that if I hadn’t been
through the tragedy before that of
losing my son. Having a tough
situation in a business, there are
worse things. And I’ve experienced
those worse things.”
98. “I don’t think I could have gotten
through that if I hadn’t been
through the tragedy before that of
losing my son. Having a tough
situation in a business, there are
worse things. And I’ve experienced
those worse things.”
99. “I was able to keep my attitude up
and my energy up. I said, ‘We can get
through this thing. We can overcome
this thing.’ We are now number 26
in the Fortune Best 100 Companies
to Work For. I look back on those
days and say, ‘Boy, am I glad I didn’t
throw in the towel or quit or buckle
under that pressure.’”
100. “I was able to keep my attitude up
and my energy up. I said, ‘We can get
through this thing. We can overcome
this thing.’ We are now number 26
in the Fortune Best 100 Companies
to Work For. I look back on those
days and say, ‘Boy, am I glad I didn’t
throw in the towel or quit or buckle
under that pressure.’”
103. North Adams,
Massachusetts was a
former mill town that had
fallen onto hard times by
the 1970s.
104. The town had several
hundred thousand square
feet of industrial space
with no tenants.
105. “It was not as if everybody were jumping
for joy at the idea of having
contemporary art in a proud, former mill
town. If you would have asked anybody
on the street what they wanted to
happen, they would have said ‘Give me a
paper clip manufacturing company.’ There
was a 150-year tradition of North Adams
as a single company mill town.”
106. “It was not as if everybody were jumping
for joy at the idea of having
contemporary art in a proud, former mill
town. If you would have asked anybody
on the street what they wanted to
happen, they would have said ‘Give me a
paper clip manufacturing company.’ There
was a 150-year tradition of North Adams
as a single company mill town.”
107. MASS MoCA received a pledge
of $35 million from
Massachusetts Governor
Michael Dukakis...
108. But the new Governor William
Weld rescinded the promise.
109. “When Weld took office his
quote to Time Magazine was
‘over his dead body’ would the
state of Massachusetts release
$35 million to the Museum of
Contemporary Art at a time of
economic challenge.”
110. “When Weld took office his
quote to Time Magazine was
‘over his dead body’ would the
state of Massachusetts release
$35 million to the Museum of
Contemporary Art at a time of
economic challenge.”
111. By recruiting almost 700 local
businesses to contribute to the
museum, MASS MoCA
eventually convinced Governor
Weld to release $18 million.
114. Building an agricultural-
based economy
• Pete Johnson, Pete’s Greens
• Tom Stearns, High Mowing Seeds
• Mateo and Andy Kehler, Jasper Hill Farm
• Kristina Michelsen, Claire’s Restaurant
• Andrew Meyer,Vermont Soy
116. “In the last ten years there’s been a big
wave, and especially the last three
years, a major increase in the number of
value-added agricultural processors and
farm-based operations. To the point
where there’s been about 100 new jobs
added in the last three years.”
117. “In the last ten years there’s been a big
wave, and especially the last three
years, a major increase in the number of
value-added agricultural processors and
farm-based operations. To the point
where there’s been about 100 new jobs
added in the last three years.”
118. “Don’t underestimate the power of
working together in whatever level of
formality, but working together with your
peers. It has been literally transformative
for what we are doing up here.”
119. “Don’t underestimate the power of
working together in whatever level of
formality, but working together with your
peers. It has been literally transformative
for what we are doing up here.”
120. “All of us have realized that by
working together we will be
more successful as businesses.”
121. Nine Strategies of
Business Success
• Adaptability • Loyalty
• Collaboration • Niche Marketing
• Customer Service • Perseverance
• Diversification • Planning
• Growth
JANIS: Good morning. Today we’re going to talk about our new book, BUSINESS SUCCESS IN TOUGH TIMES. We learned about business that achieved success despite coming up against tough times. The tough times that these businesses faced were sometimes about the economy, but other times were specific to the industry or the particular business, and sometimes were even tough times of a more personal nature.
NEIL We started to work on our book about a year ago. We knew the economy was weakened, but we had little idea of how the real estate market would effect the stock market and the whole economy.
NEIL Some publications are presenting images of the Great Depression to show how much trouble the U.S. economy is now in.
NEIL Here’s a picture from the Great Depression of the 1930s. Proud people wanted jobs that weren’t out there.
NEIL Today people want work, too -- we’re in economic hard times again, but maybe the jobs have changed a bit. (read slide)
NEIL Some of the most visible and well-respected companies in America have been hit by tough times. Some have gone bankrupt, some have been acquired by other companies. Some are begging for a government bailout.
JANIS But even in these tough times, there are companies that are doing well.Today, we profile some business leaders who have run successful companies despite coming up against tough times.
JANIS As we interviewed top business people from around the country and researched how some businesses were able to succeed in really tough conditions, we identified nine strategies for business success that were common to many of the situations. We think these strategies are useful for most businesses to help them when times get tough.The nine strategies are: (ALTERNATE READING AND EXPLAINING)
NEIL Today, we will tell you some of the stories of businesses that succeeded in tough times and how they did it. Some of the companies are large, others are small. Some are from far away and others are right here in Vermont.
NEIL The first strategy we want to talk about is diversification. You can diversify your products -- carry a wide range of items. Or you can diversify geographically, by being available in a number of locations. Diversification can also mean having a diversified customer base, so the loss of one or two customers won’t destroy your business.
NEIL We’ll start with a local story about St. Johnsbury Academy in our hometown of St. Johnsbury, Vermont. We interviewed Bernier Mayo and Jack Cummings about their strategy to diversify their customer base of boarding students back in the early 1980s.
NEIL St. Johnsbury Academy faced a crisis point in its boarding program in the early 1980s. The supply of boarding students at the school had essentially dried up when Bernier was hired as headmaster. Here’s what Bernier Mayo was up against.
NEIL : (before audio) Let’s hear it in Bernier’s own words:
NEIL Under Mayo’s leadership, the Academy took the major step of going to Asia to recruit boarding students.
NEIL
NEIL Jack Cummings is now special assistant to the headmaster but was in Admissions in the 1980s. He talks about how their diversification strategy worked for the Academy.
NEIL (after playing audio):Today, almost one-quarter of Academy students are boarding students. The boarding students are profitable for the Academy and bring a great diversity to the student body.
By diversifying their customer base -- the boarding students -- the Academy succeeding in not only saving the boarding program, but also building the school and really bringing it to a new level.
NEIL In Waitsfield, at his Village Grocery and Deli, Troy Kingsbury told us about how he has used diversification to broaden his customer base.
NEIL: Troy added a deer weigh-in station during hunting season, and took pictures of every deer brought in.
NEIL
NEIL: Troy had another idea to bring in new customers and benefit his community, too. Donated bicycles are housed at his store and lent to people to encourage bike usage around Waitsfield.
NEIL
JANIS The next business strategy we’re going to talk about is Planning. For a business to be successful in tough times, you have to plan for how your business will thrive when times are good or bad.
JANIS:Edward Jones is a great example of a large company that understands the power of planning for good times and bad. Despite the failure of many large firms on Wall Street, Edward Jones is one financial brokerage firm that is doing well.
We interviewed Jim Weddle, CEO of Edward Jones, who shared the reasons why Edward Jones has succeeded in both strong and weak economic periods.
JANIS They have an interesting and unusual structure that most other brokerage firms don’t have. They have many offices, but only one broker per office.
JANIS They continue to open new offices despite the poor economy.
JANIS Let’s hear from Jim.
JANIS
JANIS Edward Jones’ philosophy for success is to plan for the good and the bad times. They won’t take all the risk in good times, so their upside may be slightly less, but in poor times, they also will have strong value because they don’t go as low.
JANIS Marty Beattie owns Marty’s First Stop in Danville, Vermont. He talked to us about how he plans differently for his store in economically tough times.
JANIS: Marty was awarded Business Person of the Year by the Northeast Kingdom Chamber of Commerce in 2008. He keeps his business thriving by adjusting to the current conditions. Here’s how Marty describes what he’s doing: (go to next slide)
JANIS: He uses everything in the store with a typical Vermonter’s attitude of letting nothing go to waste. He describes it: (go to next slide)
JANIS (after hearing Marty): As I’m sure many of you have been doing, Marty has made adjustments based on what his customers ask for and to find ways to economize during tough economic times. His planning helps him make the best use of product and adds to his bottom line.
NEIL Adaptability is the next strategy we want to talk about today. Being able to change your business can be a great way to deal with tough times. In our book, we use the product Silly Putty as an example of how being adaptable can create a whole business. Silly Putty was invented as a substitute for rubber during World War II, but it didn’t really work. After the war, an enterprising toy seller realized the potential in the product as a child’s toy, and the rest is history.
NEIL We interviewed a doctor who has adapted the way he practices medicine to make use of the Internet and other means of communication. Jay Parkinson has a medical practice in Brooklyn, New York, and has found a way to cut the cost of medicine and at the same time, provide a better quality of service.
NEIL: (read slide)
NEIL: (play audio first) Parkinson believes that people need catastrophic health care insurance for the big things, but that patients shouldn’t have to wade through the confusion of insurance red tape for routine visits to the doctor.
NEIL: Parkinson has found a way to deliver quality health care affordably by changing the way a doctor’s practice is usually organized. Requiring fewer face-to-face visits with the doctor reduces costs for everyone.
NEIL: It’s interesting to see a doctor who is thinking like a business person. We think he may have found one way to make medical care simpler and more affordable.
JANIS: Encouraging customer loyalty is one of the best strategies to retain customers when times get tough. It’s much easier and less expensive to build business through established customers than to go out and find new ones.
JANIS: Adam Burke is in charge of Hilton Hotels’ HHonors loyalty program. He told us that the program is critical for Hilton’s success in tough times.
JANIS: The HHonors program has grown to be one of the best in the country and has helped Hilton retain customers even as fewer people travel in poor economic times.
JANIS: (before playing audio) Hilton’s loyalty program has more flexibility in its rewards system than most others. Burke says that is the key to its success.
JANIS: (before audio) The program gives the company the flexibility to change its rewards structure to respond to the changing economic times.
(After audio) Finding ways to reward its best customers has worked well for Hilton to stay on top in the hotel industry. We recommend it as a way for your business to keep the customers you already have.
NEIL One strategy that we found some businesses use when times are tough might not be obvious. Some companies choose to grow as a way to deal with tough times.
NEIL: Warren Buffet, chairman of Berkshire Hathaway, is considered one of the smartest investors ever. Today, when other companies are running scared, he is finding bargains in a depressed stock market. He sees the opportunities for growth and is taking advantage of them.
NEIL: We interviewed Umang Gupta, CEO of Keynote, a company that provides testing services for website quality. His company used the strategy of growth to get out of a tough situation about 8 years ago.
NEIL: Keynote found itself in a situation where its business was shrinking because many of its customers were going out of business in the late 1990s.
NEIL: Keynote had a lot of cash from recently going public, but it didn’t have the sales revenue to support its business.
NEIL: Other dot-com companies had expertise but they couldn’t get enough funding to stay afloat. Keynote had money to buy these companies and was able to expand the range of services it could provide in a short time.
NEIL: (After playing audio) Today Keynote provides a wide range of website testing services for some of the largest companies in the world. Keynote made the choice to grow when times were tough and it has paid off for the company.
JANIS: Niche Marketing is another way to achieve business success. Too many businesses want to sell everything to everybody. Sometimes by limiting your product line, you can become a specialist.
JANIS: In the book, we use the example of a local St. Johnsbury company that has relied on niche marketing to grow despite the tough economic conditions here.
JANIS: Classic Designs doesn’t rely on the local market to purchase what they manufacture, because it is too narrow a product line. They make something other people can’t easily make -- table legs. They have developed a strong catalog and Internet sales that makes their niche products of table legs available to people all over the world.
JANIS: Here is the home page for Classic Designs. If you’re looking for table legs on the Internet, the number one spot in the search engines belongs to Classic Designs. Its Internet name is tablelegs.com.
NEIL: Lake Champlain Chocolates is another Vermont-based business that uses niche marketing very effectively. The company has built its brand of high-quality chocolates since its start in 1983. Today’s tough economic times don’t discourage Allyson Myers, the Director of Sales and Marketing.
NEIL:(Before audio) Lake Champlain Chocolates understands the value of a small treat during tough times.
NEIL: They understand that while purchase size may be smaller, people will continue to buy their product that they have very carefully carved out a niche for.
JANIS Here is another example of niche marketing -- this time, a very large firm that does one thing very well.
We interviewed Steve Swasey, head of communications for Netflix, to find out how they have succeeded despite other big companies trying to do what they do.
JANIS Netflix pioneered the online movie rental service, and became known for doing it very well. Then Wal-Mart and Blockbuster decided to invade their territory.
JANIS Steve explained to us how Netflix was able to send Wal-Mart away from the online video rental business.
JANIS
JANIS Then he explained how Netflix was able to beat Blockbuster at its own video rental game.
JANIS
JANIS Steve told us Netflix won’t get into brick-and-mortar stores -- that’s not part of the way they know how to do business. They have succeeded with their niche and they will build the business on that.
NEIL Firms that have a passion for customer service do well in tough times.
NEIL We interviewed Don Gallegos, who was President of King Soopers supermarkets for 15 years. King Soopers dominates the Denver market, with a 55% market share despite challenges from Cub Food and Wal-Mart.
NEIL Don credits the emphasis on superior customer service as King Soopers’ strategy to succeed facing really tough competitors in their market.
NEIL(After audio is over) We think it’s a good general rule of thumb that the company with really superior customer service will do better than a similar business with lesser customer service during tough economic times. Service can be a real point of differentiation for a company -- something that sets one company apart from all its competition.
JANIS When times are tough, one thing you have to do is patiently persevere. You have to keep searching for the best way to use your talents.
JANIS Paula Crowley and Lou Sachs were top executives at the Rouse Company, one of the country’s top developers of commercial real estate. They formed their own real estate development team, but ran into tough times during the real estate recession in the early 1990s.
JANIS(Read slide first) Paula explained to us how they finally hit on the idea that would turn their business around and make them very successful during the real estate slump of the 1990s. They were renting one room in the offices pof a graphic arts firm, who had a client that was in health care.
JANIS
JANIS By persevering and working on new ways to use what they were good at, they found a new market for real estate development that has built a whole new business for them. Today, they are one of the leaders in health care real estate development in the country.
NEIL Here’s another story about perseverance, but a completely different one.
Stew Leonard’s four supermarkets are huge, 100,000 square feet stores, with singing milk cartons, a petting zoo, one aisle, and a passion for taking care of customers.The tough times Stew faced were not economic, they were personal. Stew lost a child in a drowning accident. Then several years later, the business was rocked when his father, then the Chairman of the company, was convicted for tax evasion and sent to jail.
NEIL
NEIL
NEIL(After the audio)
Stew Leonard’s is really a story of a company that, in most people’s hands, probably would have failed after 2 personal tragedies. But Stew says he just kept at it, and the work helped him through the tough times.
JANIS The final strategy for business success is Collaboration. We found many businesses that realized the power of working together for a common purpose.
JANIS Joe Thompson is Director of MASS MoCA, the Massachusetts Museum of Contemporary Art in North Adams, Massachusetts. He told us his story of spending 12 years building a coalition of people to get the new museum off the ground.
JANIS North Adams is an old mill town in northwestern Massachusetts. Its heyday was over 100 years ago, and by the 1970s, most of the industry had dried up and left huge industrial buildings empty in the center of town.
JANIS Everyone debated what to do for the town, and the idea of turning the buildings into a museum began to take hold.
JANIS(before playing the audio)
Here are Joe Thompson’s words about how enthusiastic North Adams citizens were about the prospect of a museum.
JANIS(read slide first)
He was able to get state financing for the project... until ---
JANIS The new governor of Massachusetts took it away when the state economy went sour.
JANIS(before playing the audio)
Here’s how Joe tells it:
JANIS Joe knew he had to show the governor that North Adams wanted the museum and that it would make economic sense for the area. So he built a coalition of local businesspeople who pledged $8 million toward the project. Finally Gov. Weld was convinced.
JANIS(read slide, then)
The town of North Adams has had a great economic resurgence since MASS MoCA opened. And the museum still relies on collaboration with other cultural institutions to operate.
NEIL Our final story today is a local one. In the town of Hardwick, Vermont, people there have started building a collaboration around the theme of local food and agriculture.
NEIL These are just some of the businesspeople who have made a commitment to produce and sell food and farm products to benefit the area around Hardwick.
NEIL: Tom Stearns is at the center of a lot of the activity in Hardwick. As head of the Center for Agricultural Economy, he is leading the effort to build the area’s economy with agricultural businesses.
NEIL:(before playing the audio) The number of agricultural businesses around Hardwick has increased dramatically in the past few years. As a new business develops, it becomes part of the network of area food-related businesses.
NEIL: (after playing the audio): Tom is a firm believer in working together to make everyone more successful. He’s seeing it happen in the Hardwick area.
NEIL: They meet every month to help each other and figure out ways that they can improve all their businesses. They have even provided short-term loans to each other when necessary. Claire’s Restaurant was started by 50 people each contributing $1,000 to be repaid in meals over time. In the past 2 years, more than 100 jobs have been added in the Hardwick area and they are getting lots of media attention.
JANIS: We’ve covered all the nine strategies today. There are many more stories and examples in our book, which will be available for sale after the presentation.
NEIL: We’d like to thank the Vermont Grocers’ Association for having us here to speak with your group this morning, and thanks to the Vermont grocers we interviewed who gave us information about what you’re doing in these tough times.
NEIL: Good luck to you all. And now we have some time for your questions.