The entrance of Tide into our market
forced us to consider how we’re different,
what we can do that someone else
won’t be able to replicate.”
Joe Runyan, founder / Hangers Cleaners, Kansas City
What makes loyalty work? First, you have to build something worthy of loyalty – something unique, or at least different enough from standard fare to evoke strong affinity.
When Procter & Gamble opened a Tide-branded dry cleaning franchise in Kansas City, Mo., some independents closed, but Hangers Cleaners managed to increase revenue 10%, without cutting costs.
Hangers Cleaners in Kansas City was a thriving in a niche as an environmentally safe dry cleaner. Then, in 2008, Procter & Gamble opened its first franchised Tide-branded dry-cleaning facility 1.5 miles from the Hangers’ headquarters. Founder Joe Runyan feared Tide would undercut his prices and outspend him on promotional material to gain market share.
Tide indeed drove some smaller competitors out of the local market, according to articles in the New York Times, KC Business Journal and other media – but Runyan says that’s been to his benefit. In fact, he’s “thrilled” by Hangers’ performance this year, with costs stable and revenue expected to climb 10 percent over 2009.
Runyan says he’s both acquired new customers and increased business from existing clientele, with customer-friendly van pickup and delivery. Too, the company’s quirky personality and a strong emphasis on social-media communications help him drive loyalty, even while Tide continues to expand.
“I tell (other dry cleaners) to perform a S.W.O.T. analysis like we did,” Runyan says, referring to the isolation of four key factors: Strengths, Weaknesses, Opportunities and Threats. “Figure out how to accentuate your strengths and shore up your weaknesses.
“We’ve created a unique brand. We’re funny and edgy, and now that’s how our business is known. People like doing business with people they like.
“It’s reinforced by our use of social media. Whether through Facebook or Twitter or our regular e-mails, I’m always getting feedback from customers who say they love hearing from us because our messaging is hilarious.”
Whether or not they use the coupon, customers keep coming back for the laughs like:
- A Mother’s Day promotion featuring a picture from the movie “Mommie Dearest” with Runyan’s face superimposed on Joan Crawford’s daughter’s body. Runyan says the slogan – “Keep Mommie Dearest from ironing your shirts this Mother’s Day …” – still gives him “the creeps.”
- An e-mail with a picture of George Hamilton and the slogan: “After another year of braving the elements, is your favorite leather coat beginning to look like this?”
- Presidential T-shirts – one with a picture of Bill Clinton said, “I wish Monica and I knew about Hangers.” Another has George W. Bush’s photo with a caption: “After going to Hangers, spots are harder to find than weapons of mass destruction.”
Kam Saifi, owner of Next Cleaners, an environmentally friendly dry cleaner in Greater New York City advises expansion in Runyan’s situation:
“If you do it strategically, the (additional) stores can really be billboards for your business and can help build the brand as well as generate revenues. That, Saifi added, coupled with bolstering the management team and an infusion of investment capital can help create “critical mass.”
Still, the basics of a liquid CO2 process is a linchpin in Hangers’ success (no harsh chemicals, no funky smell): “Being ecofriendly is great, but if we don’t get your clothes clean, don’t press them right and don’t have prices that are fair, why in the world would you continue to use us?” Runyan asks.
What universal lessons apply? Two are obvious, but a third requires insight and guts to implement in real-world situations:
- First, don’t let big-money powerhouses bowl you over. Customers like to root for the little guy.
- Two: Don’t be afraid to use humor – even irreverence – to create a unique identity.
- But … Once you survive the initial onslaught, be careful about hanging on to the “irreverent underdog” persona for too long … even if the tactic seems wildly successful. In the end, there’s no substitute for solid financing, great management and hard-core traditional marketing values like trust, value and customer service.
Filed under: Loyalty Marketing