The NYTimes recently profiled how a small dry-cleaning business in Kansas City, Mo. survived the arrival of a large corporate competitor in town. Hangers Cleaners started in 2004; in 2008 Proctor & Gamble moved into town with a new Tide dry-cleaning service.
[T]heyre spending tons of money marketing and undercutting price,” owner Joe Runyan said. “How do we overcome the gorilla down the road?”
As the article describes, Runyan initiated a business strategy that focused on customer engagement.
If a garment was damaged, a store representative would call the customer immediately and offer to replace it. He held a St. Patricks Day tailgate party for 60 people in a Hangers parking lot and financed a float in the local parade. “Maybe its goofy and old-fashioned,” he said, “but it seems to be resonating with the folks in K.C. Who would expect people to party with their dry cleaner?
As a result, even with Proctor & Gamble in town, “Mr. Runyan said his revenue grew 2 to 3 percent in 2009 and his profits quadrupled”. Goes to show that in a business world where your competitors may always have the lower price, you can compete through customer engagement.
And: we would party with our dry cleaner.