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Say it is so, Joe

Trader Joe's float

Wasn’t New Year’s Day was a little strange this year, without a single college football game being played? Even the Rose Bowl Parade wasn’t held until Monday, January 2nd.

Nevertheless, I faithfully tuned in Monday morning to watch the annual flower-filled festivities.

At one point, Evanston native and perennial parade commentator John Naber told a brief story about the birth and growth of a local grocery store located right along the parade route.

(What could John Naber possibly know about small business? Well, besides being a famous Olympic Swimming Champion and sports commentator, he once hosted “The American Small Business Awards.”)

He talked about the smart overall strategy that “Joe” the business owner used, which was enough to catch my attention and get me to do some further research.

(I know, I know – I was supposed to be relaxing and watching a parade. But I just can’t help but spring into action at the slightest mention of the use of a smart small business strategy!)

Realize that I’m not writing this just to tell some charming story for history’s sake. My hope is that you, dear reader, will be inspired to implement similar strategies in your business so that you experience a similar story of success.

The owner’s basic idea, as Naber put it, was to target an affluent, niche market and provide high-quality products and services they couldn’t get anywhere else.

I could stop right there, because that alone is a recipe for success that almost all small business owners ignore in their misguided quest to try to be everything to everyone – thus falling into the deadly trap of being viewed as just another typical provider of their product or service.

But here are some more simple but brilliant strategies Joe has used over the years to differentiate his stores from all other grocery stores…

  • He focuses on Quality over Quantity – his average store carries about 4,000 different products, FAR below the typical grocery store that carries about 50,000.
  • He has created a unique personality for his stores in many ways, including:
  1. About 80% of the products he carries bear one of his own private labels
  2. His employees all wear Hawaiian-style shirts, instead of the typical, boring “grocery store employee uniforms” you find everywhere else
  3. Many of his stores’ products are gourmet and specialty items
  4. His stores were known to be “environmentally friendly” long before it became fashionable (his was the first to introduce reusable canvas bags – back in 1977)
  5. He runs fun, folksy radio ads full of interesting behind-the-scenes stories
  6. He started publishing a wildly-popular newsletter almost from the inception of his very first store, filling it with unique stories and personality
  • He takes care of his employees, providing above-average pay and benefits, even for part-time workers. This helps him attract much higher-quality employees than other grocery stores, who are well-known for providing unparalleled caring and cheerful service (they’re even known for singing in the aisles!). As a result, his chain has been included in MSN Money’s “Customer Service Hall of Fame” and in Ethisphere Magazine’s “Most Ethical Companies” list for each of the past three years.
  • For a time, he leased space in his stores to local butchers, who provided fresh, high-quality meats unavailable in any typical grocery store.
  • He consistently introduces about 10 new items every week (a tradition started back in 1977), so that shopping in his stores is never a run-of-the-mill, boring experience.
  • He insists on a 100% satisfaction, no-questions-asked guarantee policy – issuing refunds even on food items that have been partially consumed.
  • He ignores many of “the accepted rules” of the grocery store industry:
  1. He refuses to carry well-known, mass-market brands like Coca Cola, Budweiser and Procter & Gamble products
  2. He never charges suppliers for shelf space (and passes that savings directly on to his customers)
  3. He doesn’t accept coupons in any of his stores
  4. He doesn’t have customer loyalty cards
  5. He doesn’t run “weekly sales”, but features everyday low prices instead

Yes, this brilliant entrepreneur definitely takes a long-term, relationship-oriented approach to business.

By now, you may know what “Joe” I’m talking about.

It’s Joseph Coulombe, of course, founder and driving force of the Trader Joe’s chain that now numbers over 365 stores in 31 states and does over $8 Billion in business every year, earning it a ranking of #21 on the Supermarket News list of “The Top 75 Retailers Of 2011.” That’s a far cry from the chain’s humble beginning as a small chain of convenience stores in 1958 that changed its name to “Trader Joe’s” starting with one store – still in operation along the Rose Bowl Parade route – in 1967.

“We adopted a policy of not carrying anything we could not be outstanding in,” Coulombe told BusinessWeek in a 2008 interview. And in case you think that sounds simple or easy, Joe reminds us that “it took us about five years, because we had to create a whole new chain of logistics.”

Now, I know that you don’t likely own a chain of grocery stores, so you could easily use the excuse that while all of this is a good story, none of these strategies apply to your business.

But that won’t make you any money.

What will make you money is to go back over this article and figure out a way that you can use as many of these concepts and strategies as possible in your particular business.

When you do that, I’d love to read about it in a comment below.

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