LIVING IN FEAR OF COMPETITION

By Deborah Rechnitz CMA CMC

We are always worried about the new competitor or the potential of a new competitor, and for good reason. Even the best of operators experience a 20% loss in business when a competitor opens up next door. It would be nice if there was something one could do to avoid this drop in revenue.

There is rarely anything one can do about the immediate drop in revenue. That is the bad news, but there is some good news. You can minimize the drop of revenue. You can also see a return to your historical sales levels or to even higher sales levels by taking some proper actions. Read on.

The new guy. What does the new guy have that the existing operation lacks? Generally the newest operator moves into the newest strip center, shopping center or mall. A new location also requires a new sign. The call office is new, clean and neat and reflects the latest designs and colors. All of these visual inputs attract a customer.

There are motivators that draw a customer to TRY the newest competitor. The new location may have become more convenient, particularly when the location is tied to a brand new grocery store which has attracted a lot of new business of its own. Steep discounts are mailed to the homes. Large banners are displayed across the store frontage. Finally, negative experiences at the existing drycleaner, no matter how small, may influence a trial of the new guy in town.

Living in fear. Some of the best operators in the country live in constant fear of a potential competitor. It is not than anyone is expected to come into his or her territory in the near or long term future. It is not that they have heard any uncomfortable rumors from their suppliers. It is just that they live on the edge of fear that constantly drives them to improve their operation to avoid the REAL threat of a competitor moving in. When the fear does turn to reality, they are as prepared as they can be.

A successful existing operator can and frequently does compete against himself. You must. You can move into the newest strip center, shopping center or mall. As demographics change and populations shift, an existing operator must move with the times. This strategy is frequently avoided because of the fear of cannibalizing your existing store sales. It is true. You might. Usually, however, the two locations both grow and the net result is greater profitability and protection of your market.

Staying at an existing location and not moving to secondary strip centers is also an alternative, but changes are required to remain competitive. A new location requires a new sign. If an existing location is still very strong, it also deserves a new sign before it has become yellowed from the sun. A new call office is clean and neat and reflects the latest designs and colors. Existing stores, to protect themselves, must also reflect a new image to attract these same customers. All of these visual inputs continue to hold customers and attract new ones.

No matter what preventative actions you take to maintain the convenience and visual attraction of your site, it is not enough. The final motivation of a customer to switch has to do with historical dissatisfaction of the existing experience. Dissatisfaction does not always mean filing a claim with the cleaner. It can mean that your hours are not as convenient as the competition’s. It can mean that the customer service representative is not very pleasant. It can mean, more seriously, that the clothes are not ready on time. It can mean many different things to different people. Mostly it means that the customers will not communicate this dissatisfaction to you, but they will just quietly try something else and you may never know it.

Living in fear means that you are constantly trying to judge the satisfaction level of those quiet customers. A variety of means are required. You use your point of sale computer system to survey customers who have stopped doing business with you. You upgrade your CSR levels as best you can and constantly work on it. You put systems in place to guarantee that work is back on time and customers are compensated when it is not. All of these details are directed towards building a customer’s positive experience.

Doing everything right still does not eliminate customers from trying the new guy in town. After all, it may be more convenient for some individuals. We know that we can’t make all the people happy all the time, no matter how hard we try. We also know, however, that if we have done the best we can, frequently these customers will try the other guy and they will return. Trying isn’t such a bad thing. Customers actually realize how good they have it when they try someone else. Under these circumstances they return and they bring some new friends because they have shared their experiences.

Discussions about upgrading your image, internally and externally, are not just for the sake of upgrading the image. Training issues, expanding store hours, implementing point of sale and production systems are not discussed for the sake of saying something. Constantly searching for new sites is not just for the sake of growth when you might not be interested in growth. These strategies are also necessary for you to hold on to what you already have. It is okay to live in fear, just a little.

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