Only change to get better
I often write about companies that change (SPX 11.17.10). In these cases….change is made to get better.
Two recent examples: one of change that didn’t work….and another of not changing to preserve the brand.
WGN in Chicago has been the top radio station in the market for years….strong in talk radio….not controversial but entertaining. About a year or so ago….new mangement took over and tried to revamp WGN into something completely different. They wanted to change the brand rather than preserve it. Instead of getting better….WGN became too different and in the eyes of its listeners (customers) not better. The changes failed and the new management has departed. WGN is taking steps to restore the brand that has been successful for the last 50 years.
G and A Restaurant in Baltimore is a Coney Island Hot Dog joint. G and A has been in existence for 83 years and the business has passed down from generation to generation. Businesses like G and A are similar to historical landmarks….customers don’t expect nor want them to change.
Change is important….yet it has to make a business/organization – better.
Consumer Reports (CR) ( July 2010) had an article on Americas Top Stores.
Meijer is a company I know well. Its origins are in western Michigan. Meijer started the hypermarket (before Wal-Mart) concept in the US. There are 190 Meijers in MI, OH, IN, IL, KY. With sales of about $14B.
Meijer’s rating according to the CR survey was 77, the top rating went to Costco with an 85. In the discount category….Wal-Mart was a 73 and Kmart 72. Target thought to be more upscale was a 79.
Meijer should do better. While it can compete with Wal-Mart….it could be points ahead of Wal-Mart. Its major deficiencies in the survey were slow checkout….ease of returns….out of stock merchandise. For the most part these deficiencies can be easily corrected.
Any business just doesn’t want to compete….it should want to be better than its competition….and more than 4 points better. I would think that Meijer headquarters reads CR and puts the steps in place to be a great business….they are good not yet great.
How good is a business? Check out the bathrooms
Buc-ee’s is a 30 store upscale gas station/store chain in Texas. It not only sells gas….it sells gourmet food….clothing and a myriad of other items.
The bathrooms are a major part of its brand. What better way to attract people who are traveling than with clean bathrooms (and clean everything).
It’s amazing to discover businesses that do things better and different.
These are great companies.
In July, we started our kitchen project….after considerable research we selected three Whirlpool Gold appliances….the refrigerator (in the photo)….dishwasher….range….all purchased at Lowes.
The dishwasher and range have performed well….not so with the refrigerator. Within a few weeks, frost built up in the freezer (modern refrigerators should be frost-free).
Here is what has taken place so far:
+ Four service calls from A & E Service. A & E provides warranty service to Whirlpool. After the 4th call….A & E deemed they could do nothing more. Whirlpool wants a second opinion.
+ Two service calls from a local service company….who replaced the original thermostat with a higher degree one.
+ After the thermostat was replaced….the refrigerator was not cooling. More calls to Whrirpool….another local service company called and two more service calls. In this case, the fan in the freezer section was replaced (the fan blows cold air into the refrigerator compartment). Of course the service tech says they don’t make them like they use to (incidentally the fan was Swiss made).
After eight service calls….a visit to Lowes to request a new unit. Lowes has ordered a replacement….due in about a month. Good for Lowes and Dave, the appliance manager.
From a business/customer perspective:
- Lowes has been nicely responsive….after all we are the customer of Lowes not Whirlpool.
- Whirlpool warranty service was effective until the problem became more difficult….”we need a second opinion”….”they need to call tech support”….etc.
- Lowes….Sears….national appliance chains do have leverage when it comes to replacement….and satisfying the customer.
- Local businesses can compete if they provide great service. Unfortunately in our area, there are no really good local dealers.
- In our time in the home furnishings business….it was service what we sold (and service even if we didn’t sell it). Walt Plant, Langlois, Seaway Appliances….all were strong appliance retailers.
- To Whirlpool: satisfied customers buy more Whirlpool appliances.
Final Note: There is still frost in the freezer.
Since we have lived in Cary….most of our grocery shopping has been at Kroger. First, the Kroger less than two miles away….now at the larger Kroger about 3.5 miles from us (the first one closed).
We first met Holly at the first Kroger and then she transferred to the other one. Holly is a cashier as well as a detail pricing person. Holly enjoys her work and is very nice. We always go to Hollys checkout. It’s enjoyable to observe her interacting with the customers….some I’m sure she has known for years….like us.
Whether we see Holly in the aisle or checking out….it makes the day brighter….the time spent shopping less tedious….and makes Kroger a better store.
I hope the “suits” from Roanoke (the division HQ) recognize what Holly adds to Kroger, store #357
It is all about being nice.
Subway is a huge business….33,000+ stores worldwide with a goal of 45,000 by 2015.
Don Fertman….the Undercover Boss (UB)…. is the Chief Development Officer of Subway and somewhat of a comedian. His antics were funny. He seems to have a strong relationship with Fred DeLuca, the CEO and founder of Subway.
While predictable….UB always has some good take-a-ways:
- Success revolves around the front-line people
- Make the sub right….make it fast (2 minutes)
- Fresh ingredients make it a good product
- Simple formula: good product & good service
Though not the quality of our local sandwich shop….the Subway we go to provides a good product/value….and good service with a 100 point health department rating. That’s a well-run business.
Traditional Wooden Barrels
Times change….yet there is still a need and demand for wooden barrels. Barrels are a necessity for aging some varieties of wine. Now as micro-distilleries proliferate….demand has increased for barrel makers.
Black Swan located in northern Minnesota has it roots in Greif Barrel Company. Greif in 2000 made 16,000, 20 gallon coffee bean barrels for Jamaican Blue Mountain Coffee Company.
The need for coffee barrels plunged due to damage caused by hurricanes….yet a new market opened up….micro-distilleries.
Heidi Karasch took over the company in 2009. The real expertise in barrel making is toasting and charring the inside….which flavors the product aging in the barrel.
The end result: Black Swan saw a market change….adapted its product to a new market….and maufactured a quality product.
It’s all in the execution.