By Don Desrosiers, Tailwind Systems
Maybe you haven’t realized this yet, but business has an evil, cruel underbelly. The secret to success in business is to provide quality and service at a palatable price. This is true regardless of your product. Customers want you to do it right, do it fast, and do it cheap. Maybe that’s too crude for some, so I led with: they want good quality, good service at a price that they think is affordable. You can pick any two, and it won’t be so difficult. Doing three is the challenge.
For most school systems, 65% constitutes a passing grade, just barely. If doing two out of three is your choice, you pass but just barely with a 66% grade. As Meatloaf said, “Two outta three ain’t bad.” But it isn’t great, either. However, three out of three is a Herculean task, let me tell ya!
Top Quality & Top Service
Imagine you decide to deliver a quality product with the best service. Good choice. However, this will cost you money. One way or another, your cost will go up. As a direct result, you will not be a mass-market drycleaner. This is not a bad thing, but you will need to be in a market with enough of those types of customers to support your business. A town of 100,000 people may only have 50 such people. Large metropolitan cities with millions of people may be capable of supporting such a drycleaner provided potential customers are aware of your business and need the service.
Top Quality at Low Price
Let’s say you decide to offer quality cleaning at a low price, but you cannot do same-day service or even next day service. Three or four-day service is the norm. This happens because you decide against making investments in your business that allow you to handle the relatively large influx of pieces at the beginning of the week. You are open 6 days per week and your plant can only handle one sixth of your volume per day. This means that you lose customers that need expedited service to your competitors. You should never give your customers a reason to try out your competitors! This option gives them a very good reason.
Low Quality at Low Price
Or, you could go an entirely different route and keep the price low, bang out the pieces with little attention to quality, just get the work out. This is often referred to as “bang and hang.” You will get customers. Two types. Ladies clothes that have no stains, just perfume odors. Drycleaning will remove those aromas and the steam tunnel will do just fine on the silk blouse. The non-drycleaning customer with a funeral suit will come to you and won’t be able to tell whether you did a go job or not. You can also lose money by the dump truck full.
In each of these cases, you can break the mold and provide all three; good service, good quality, and at a good price. But be aware of how sensitive it is. If you are succeeding at two out of three, remember: you are attaining a passing grade of merely 66%. A minor slip plunges you into the ugly world of a failing grade and losing customers.
Let’s suppose you, somehow, provide all three: top service and top quality at a great price.
To make things more complicated the equation can change in any business. If you supply products and somehow tapped the perfect combination of quality, service, and price (a.k.a. “the holy grail”), someone new can enter the market with a new way to sell the same thing. Perhaps they will offer nationwide mail order at an even lower price. You thought your price was low, but low compared to what? Your equation becomes irrelevant. All bets are off.
Next Level Example: Amazon Deflects Competition
You must always be ready to re-invent yourself. As smaller players in the world of business, it is wise for us to look at the major players with pockets deep enough to conduct market research and see what they learn. Many times what they look at and what they learn are not relevant to us but sometimes they drop priceless gold nuggets.
Look at Amazon. Free two-day shipping. Cool. Someone could have come in and beat them – at least on some level – Richard Branson comes to mind – and thought “How can I beat Amazon? How about free one-day shipping, even on Sunday?” Amazon re-invented themselves by offering fast shipping before someone could beat them to it. That is the definition of brilliant.
In business, you must be wary of depending too heavily on one specific supplier or subordinate. In either case, the supplier or subordinate has you in their clutches. This is not a sound tactical situation. Again, Amazon offers a lesson. None of us are in the same league as Jeff Bezos but the lessons apply if we scale them down. Amazon, fearing being placed in a precarious position by its dependence on UPS, started its own delivery network. In doing so, Amazon changed the equation. Even though most customers thought Amazon provided quality products at low prices, speedily, Amazon decided its service wasn’t fast enough! In Amazon’s world, it used to take up to 30 days to receive a product through mail order. That was the deal when I was a kid. If you’re under 50, you may suspect an editing error creeped into that sentence, but it’s true. Years ago, if you bought something through the mail, (often low-quality products from remote regions of the globe), it took weeks to get. But it was cheap. (And good luck trying to get a refund!)
My, has that equation changed! On every level, Amazon has changed that business equation for the better. The quality is as good as you want it to be, if you aren’t happy, you get a refund as soon as you ask for it (not when they get the merchandise back), you will have what you want tomorrow and since there are dozens of merchants competing nationwide for your dollar, you will buy what you want for the lowest price you can find.
You need to be ready to re-invent yourself no matter how happy you are with what you are doing and how you are doing it. Someone else may be analyzing what you’re doing, constantly probing for a better, cheaper way to do it. Beat them to it!
Don Desrosiers has been in the drycleaning and shirt laundering business since 1978. He is a workflow engineer and a management consultant who provides serves to shirt launderers and drycleaners in the United States, Mexico, and western Europe through Tailwind Systems. He is a member of the Society of Professional Consultants and the 2001 recipient of DLI’s Commitment to Professionalism Award. He can be reached at 186 Narrow Avenue, Westport, MA 02790 or at his office by fax (508) 636-8839; by cell (508) 965-3163; or e-mail at firstname.lastname@example.org. He has a website at www.tailwindsystems.com. The author’s views are his own and do not represent official Drycleaning & Laundry Institute positions.