My brother Nick and I made an unusual decision -- at least, unusual in this day-and-age. We wanted to run an old-fashioned business in an old-fashioned way. Despite the fact that neither of us had any retail experience, we opened our own Ace Hardware franchise in Colorado Springs, Colorado in 2007.
Since then, we've learned that obsessing about margins and man hours isn't the only way to make it in business today. By following the simple rule of "do almost anything for the customer and the numbers will sort themselves out" we found a business model that has allowed us to thrive, even during the recession. We're now about to open our third store, while the big boys are dropping like flies.
Back to basics
My brother and I decided to buy an Ace Hardware franchise because we had fond memories of the store's hands-on approach to customer service. We ran a landscaping business as teenagers, and we'd go to our local Ace to get our blades sharpened by people who knew what they were doing. They'd even help us fix a broken mower.
When we opened our first store here in Colorado, we didn't have a high-minded "margins-be-damned, the customer is always right" policy. We just wanted to serve our customers well. In today's highly competitive retail environment, our approach would probably be called quaint. We just didn't know any better.
Finding the anti-niche
Early on, our approach boiled down to one simple word: "Yes." We found our niche at the twists and bends in the road, doing the unusual stuff that didn't fit into our "by the numbers" competitors' models. You might call it "extreme customer service" -- we just called it going with the flow.
One day, a woman came in with a six-foot-wide chandelier that she'd bought overseas. It was all in pieces. She wanted it assembled and delivered to her home. That request would give most hardware store owners a good laugh, but Nick and I figured, "what the heck?" We spent about 13 hours putting it together and framing out our delivery truck to get it to her home, and only charged her $300.
We lost money on the deal, but we gained a customer for life. She also introduced us to all of her friends, and we saw our customer base bloom before our eyes.
Another time, an unassuming guy stopped by to grab a few things for his house. I guess we really knocked his socks off with our service, because he was back the next week as the head of maintenance for the local military base, ordering $3,000 worth of screen doors. We never could have wooed an account like that from the top down, and now it makes up about five percent of our revenue.
It didn't take us long to realize that by focusing on service above all else, we'd found a basic way to be truly competitive.
Building customer loyalty
Before long, we were known as the place to come to for almost anything. If our paint guy wanted to spend half a day matching a paint chip for a very particular customer, we let him. When a local novelist wanted us to scan pages from her typewriter into the computer, we did it. People even started calling in to have us look up directions to other places on the computer, and we complied.
Our practices would make an accountant wring his hands, but we ended up with more than repeat customers: We had our brand. Our competitors have the efficiency thing down, but since when does life operate strictly according to math equations? Where other business owners saw sticky situations and diminishing margins, we saw an opportunity to cultivate real relationships -- a little something that used to be called "customer loyalty."
Nick and I don't feel like we're doing anything new with our business. We still do nails by the pound, $.15 copies and free popcorn every day. Those aren't obvious moneymakers by any means. Still, like extra time spent with a customer, we think they're value-added services that pay off -- no matter what the numbers say.
Both of our existing stores have experienced growth rates in excess of 20 percent within two years of opening. The idea seems to scale well, and we're about to test it out with a third store in a new city. If anything, we're just excavating knowledge from the past -- the ideas and practices that either lost their real meaning or have been forgotten over time. At least for now, it seems to be the right approach for these tumultuous times.
Kirby Kuklenski and his brother Nick make the most of living and doing business in the Rocky Mountains, getting outdoors to ski, fish, and wakeboard as much as possible.
-- As told to Joseph Conway
- Read more about the revival of old-fashioned consumer values.
- Learn how to make your business a retail experience.
- Find out how to keep your retail business alive during the recession.