Are you the Nordstrom or the Walmart of your industry?
By Ken Schmitt and Vicky Willenberg
Few entrepreneurs launch their businesses with the hopes of being “mediocre” or simply “breaking even.” A wise businessman shoots for the stars and creates a business plan that will make that kind of success possible. However, before the business cards are printed and the office space rented, there is one important step all business owners must take: Defining their business model.
Consumers have many choices when deciding where to spend their hard-earned dollars. So how will you drive traffic and create interest in your business? What is the value proposition that will bring your customers to you vs. your competitor? Acquiring clients begins the moment you formulate the idea for a business. There are many business models out there and determining which one will define YOUR business will drive every decision you make from hiring to marketing to how you measure success.
When taking the plunge to open my own executive career management and recruiting firm, I knew from the onset that I wanted to be a high-touch, Southern Californian-based, boutique operation that offered personal, hands on service to my clients. Accessibility is our #1 value! By maintaining a smaller staff and requiring that we personally engage with all of our clients and candidates, I was confident we could provide a unique experience to both companies and professionals alike, developing a relationship with each. I never want to be lumped into the “staffing agency” category, where the focus is on volume and transactions, rather than long term relationships and placements that last. Most importantly, I would commit to spending the time necessary in order to truly get to know each client, sending the message that I am working for them.
Although they are the farthest thing from “boutique” in the retail world, I looked to the business model of Nordstrom for guidance. Nordstrom is most famous for its high quality products and exceptional “the customer is always right” service. Not surprisingly, this high quality is also synonymous with higher prices. So what keeps people coming back over and over, regardless of ability to find less expensive alternatives even in a difficult economy? Consumers know what they are paying for: high quality and impeccable service. From their onset, Nordstrom was clearly designed to stand out among the vast array of retailers by establishing themselves as a provider of a product that costs a little more, but providing their customers with a lot more value.
The other end of the spectrum is the warehouse shopping stores. Companies such as WalMart and Costco offer lower prices without the benefits of a personalized experience or top of line quality. However, the market for this type of service is large. For many people, a “no questions asked” return policy and impeccable customer service is less important than saving money. In fact, the higher prices of boutiques like Nordstrom are a direct turn-off for some customers. They would rather pay less, do it themselves and receive only what they need.
The day I decided to venture out on my own I began designing my business from the ground up. My success, however, has come from determining in the early days that I wanted to travel the Nordstrom route and offer my clients personalized, high quality service that is worth every penny they invest with our firm. Not a day goes by where I don’t re-evaluate our business proposition to ensure we are providing what our clients need – rather than selling them what we want.
About the Authors
Ken Schmitt is the President and Founder of TurningPoint Executive Search and the Sales Leadership Alliance. Specializing in placing sales, marketing and operations professionals across the country, Ken’s 16 years of recruiting experience have equipped him with the knowledge to serve as a thought partner to his clients for all recruiting, hiring and human capital-related initiatives. Ken sits on the board of Junior Achievement, the American Marketing Association, the San Diego HR Roundtable and is an Advisory Board Member for San Diego Sports Innovators (SDSI).
Vicky Willenberg has served as the Social Media Manager for TurningPoint since 2011. In 2014, she was elevated to Digital Marketing Manager, broadening her participation across all things digital for the firm. A former teacher with a Masters in Education, Vicky is an active and published blogger at The Pursuit of Normal and a marketing professional. She has her finger on the pulse of the latest trends in the recruiting, hiring and leadership sectors.