Misconception Is Not Reality

I recently purchased a new television set, because the one I had owned for seven years stopped working. I hadn't needed a new TV in many years, and since technology has changed so much, I wasn't sure where to begin. I went online to the usual big-box electronics stores to research pricing and the options available -- too many! -- but once armed with that information and knowing what I was willing to pay, I remembered the local home appliance store.

I had purchased a refrigerator there several years ago, and I recalled their wonderful customer service. I was delighted to find that, despite the devastating impact of Hurricane Sandy on Long Island three years ago and the persistent downturn in brick-and-mortar retailing, the store is still open. And I like to support mom and pop shops, since I, too, own a small business.

When I walked in the door, I was surprised that the owner not only remembered me, but remembered my father and Vending Times! I immediately felt comfortable, and the trust we had established was still there. My experience was positive: I got a fair price and I will go back the next time I need a product they can provide.

But not everyone is of this mindset. If you run a business today, it can be challenging to break through the "clutter" to procure new customers, let alone keep the ones you already have. Everyone is undercutting everyone else in a desperate effort to build volume and, sadly, too many consumers fall prey to all sorts of gimmicks. And there are so many choices of where to shop without leaving the comfort of the couch. Not all customers are loyal, even satisfied ones. Not all of them will identify with small-business owners, even if they've had great purchasing experiences.

Small businesses often are overlooked for the wrong reasons. Customers assume that prices will be higher at a small business than at a corporate chain store, just as they ignore the amenities that many small businesses offer such as customer care, inventory variety and community support. Most of these assumptions are wrong, but it is difficult to explain this to people who have been corrupted by "consumerism."

In speaking with OCS operators at the recent NAMA Coffee Tea &Water Show, I was reminded that they also compete with big-box stores such as Best Buy, Staples and Walmart. One of my industry friends told me that one way to compete with the discounters is with excellent customer service, but it's no longer enough; he also must identify a potential problem before it becomes real. He explained that he has installed a system that tracks all his locations' purchases and alerts him to changes in buying patterns. The idea is that, if he can flag changes in purchasing behavior and discover that a client who has been ordering (say) 10 boxes of teabags but now is not ordering any teabags at all, a customer service representative will contact that client to find out why.

If the answer is that the customer got a better price elsewhere, the rep will see whether it's feasible to match that price. Another approach, based on a memorable OCS sales training session conducted by the late Stuart Daw (a NAMA Coffee Legend) might be to explain to the customer that "the [tea bags] are free, and delivered in the context of a reliable, flexible, professional service for which there is a modest, but necessary, charge."

The critical question is: how does an operator explain to the buyer that, even if he can't match the online office supplies dealer's price, he is in fact providing a service, not just shipping product? The sticking-point for the buyer who wants, say, sugar -- not something esoteric, like high-grown coffee beans from the Tarrazú region of Costa Rica -- is that he or she can't see any service involved in the transaction, beyond simply delivering the stuff.

The difficulty with much of today's business modeling is that it gives no weight to consequences, to the long-term downside of a strategy. We have lost sight of the old principle that I should not act in such a way that, if everyone acted in that way, a bad outcome would be inevitable. If I stop buying a commodity from my OCS operator because it costs a nickel less online, eventually I will need to look elsewhere for my estate-grown Costa Rican coffee, and it probably will cost more. And whom do I call if the coffee brewer suddenly stops working or I need a Flojet pump and a bottled water source (that I didn't even know was an option) because our office relocated to the third floor and plumbed-in water is no longer available?

The holiday season that's now upon us is a good time to consider supporting our local businesses. Keeping business local is good for our industry, and for the economy; it is important in keeping our country strong. We shouldn't only shop the mom and pop stores on Small Business Saturday (or the local product distributor only as a last resort for a hard-to-find item), we should show our support all year long. happy holidays, everyone!