Leaders of the Pack

When your industry suddenly heats up, how do you stay ahead ofyour new competitors?

By Debra Phillips

Joanne Shaw didn't get into the specialty coffee industrybecause it was hip. Indeed, when she launched Flushing,Michigan-based Coffee Beanery Ltd. 20 years ago, coffee wasanything but the cup of caffeinated chic that it is now.

“这些都是the days of freeze-dried and instantcoffee," Shaw recalls. "There were few, if any, retailcoffee stores--let alone coffee chains."

Of course, the industry has since percolated its way into theforefront of American culture. Yesterday, coffee was just youraverage joe; today, it's downright trendy. But even as the cafelattes add up, so, too, do the competitors. And Shaw must face adilemma that, frankly, many entrepreneurs probably wouldn'tmind facing themselves: What do you do when your business becomesthe darling of the marketplace? Or, to put it another way, how canyou ride the wave of a hot trend without burning your own businessout?

Talk Of The Town

Sure, it sounds wonderful to be the center of so muchattention--and, in some ways, it is wonderful. "I'vealways thought [the coffee trend] was good for specialty coffee andgood for us," says Shaw, who began franchising The CoffeeBeanery in 1985. "We've had continual sales increases atevery unit."

Shaw isn't alone in recognizing the power of enhancedconsumer awareness. Jake Burton, founder of Burlington,Vermont-based Burton Snowboards, initially faced an uphill battletrying to educate consumers and dealers alike on the virtues ofsnowboarding. When Burton started his company in 1977, the sport hewas championing was barely off the ground. This forced him toexpend valuable time and energy as a spokesperson for snowboardingitself rather than for Burton Snowboards.

"Early on, our ads didn't sell the company--they soldthe sport," Burton reflects. "There was sort of a massivegrass-roots lobbying effort that had to be done, and I think wewere clearly more responsible for pulling that off thananybody."

As snowboarding escalated in popularity, however, Burton wasable to shift promotional gears. So, yes, there are benefits tobeing swept up into a trend. "The sport [now] has its ownmomentum," says Burton. That leaves the 42-year-old founderfree to focus on the demands of his own company.

Crowd Control

And make no mistake: There are demands. When your industry iscatapulted into the spotlight, you're faced with the prospectof growth--rapid growth. "When you've been in business for15 years and all of a sudden you're in the middle of a hottrend, you have to learn to adapt real quickly," says Shaw."You actually have to speed things up."

The good news is that your customer base has expanded. The badnews is, well, your customer base has expanded. And, as themultitudes flock to purchase your wares, you may find yourself tornbetween those customers who were with you from the beginning andthose who want to jump on the bandwagon now. Can you appeal to thetrendoids without alienating your core audience?

"Ideally, there should be compatibility between your coreaudience and your newcomers," says Jill Griffin, president ofThe Marketing Resource Center Inc., a strategic marketing companyin Austin, Texas.

But what if there isn't? Given that situation, Griffinadvises entrepreneurs to target those customers with the greatestbuying potential. "All customers are not created equal. Someof them have buying habits and buying behaviors that are far morevaluable to a [business owner]," she says. "The key islooking at the long-term potential of each customer segment.[Don't go solely by] what they're buying from you today butwhat they have the potential to buy from you. That's the groupof people to zero in on."

For his part, Burton concentrates on selling his snowboardinggear to customers who indeed want it for snow--not show. "Wemake a lot of clothing for snowboarders," he says. "Wedon't, however, try to sell it to people to wear on the street.If people go out and buy it [to be fashionable], that's fine.But that's not who we're going after. Once you try to makeyour business bigger than it should be--or try to appeal to abroader base than you should--that's when you get intotrouble."

Lead The Way

迷失在一片客户是年代的一种方法ink yourbusiness, no question. But what of the trouble generated by forcesoutside your control? Specifically, what of those unsavoryoperators who dive into a trendy industry with the sole intentionof making a fast buck--followed by an even faster getaway? Suchunabashed opportunism could cast a pall over your entireindustry.

"A lot of people look at [specialty coffee] as aget-rich-quick scheme," acknowledges Shaw. "They'renot necessarily getting into it because they're passionateabout the product. They're more in it for the high profits.That's a major negative as far as I'm concerned."

"Every facet of [snowboarding] is being invaded by peoplewho really don't know what they're doing," echoesBurton, who sells his products worldwide. "That includeseveryone from manufacturers to retailers. When you [work with] aretailer who doesn't know or understand the sport, that'swhen it gets scary."

All the more reason, say experts, to distinguish yourself fromthe pack. "You'd better be on top of what it is yourcustomers value and continually improve your offerings to betterdeliver that value," cautions Griffin, who is also the authorofCustomer Loyalty: How to Earn It, How to Keep It(Lexington Books). "Otherwise, they will see no reason forstaying [with your company]."

"Stay on top of what's happening in yourindustry," urges Robert Imbriale, president of Classique Inc.,a Commack, New York, marketing consulting firm. "Hopefully,people will copy you because then you can continue to be theleader. You want to build your industry, but you don't want tolose market share at the same time. The only way to [prevent this]is to innovate."

By way of example, consider what Shaw did to keep The CoffeeBeanery piping hot. "We looked at what we were doing,"she reflects, "and said, `OK, what's different about us[compared to] all the other coffee concepts? What can we be proudof that makes us special?' "

一个是thecompa“特别”的成分ny's commitment to flavoring its own coffees--a practice,according to Shaw, that many coffee retailers don't follow.What's more, in reaction to her industry's growingpopularity, Shaw expanded The Coffee Beanery from its mall outletsto street-front cafes, espresso carts and kiosk locations.

"What we really did was gear everything up to do it better[than the competition]," explains Shaw, "and then talkabout it--stressing our points of difference."

Stressing your company's uniqueness is essential, agreesImbriale. "In all your marketing materials, make sure you tellyour customers and prospects what it is about your business thatmakes you different," he says. "Make sure that differenceis in the form of a true benefit to the customer. [Customers] arenot interested in anything but how you can make their buyingexperience better or offer them more than thecompetition."

Now Hear This

Ultimately, your most powerful weapon in the battle tosurvive--and flourish--in a high-profile industry just might beyour customers. Who better to let you know how your company isperforming, which products and services are the most valued, and inwhat areas your company needs to improve?

"The business has got to continually dialogue with thecustomer," Griffin maintains. "[Customer] feedback canhelp a business get a handle on expansion--for example, if it wantsto add to its product line. A lot of times you can get a good senseof [what to add to your product line] from talking to customers andfinding out what they're buying elsewhere that they might buyfrom you."

"The only way you're going to find out what thecustomer wants is to ask," agrees Imbriale. You can do thatinformally through customer interaction or more formally throughcustomer surveys.

Don't automatically assume you know precisely what yourcustomers--either longtimers or newcomers--want. "A mistake Isee even world-class companies make is they think they know what isreally valuable to their customers," says Griffin. "Sothey do things they later find out weren't important to theircustomers at all."

Keep in mind, too, that there's no rule against learningfrom those competitors that have jumped into your now-trendyindustry. To the contrary, as an industry undergoes ametamorphosis, it's incumbent upon you to stay abreast of--andincorporate--those changes that most benefit your business.

The Coffee Beanery, for instance, responded to the new-foundhipness of specialty coffee by adding seating to its malllocations, as well as offering entertainment and more food andbakery items throughout The Coffee Beanery's franchises (whichnumber about 180 nationwide). It's a simple, yet all-too-easyadage to forget: Give the people what they want, when they wantit.

From The Heart

As banal as it may sound, there is one clear advantage bothJoAnne Shaw and Jake Burton have over many of theirJohnny-come-lately competitors: They're genuinely excited bythe products they sell.

"I love this business--I love the product, and I love thepeople," enthuses Shaw, who estimates The Coffee Beanery hasenjoyed 300 percent growth in the last three years. "I feellike we've got so much more to do and so much more growth inour future. It's exciting."

Similarly, Burton isn't traversing the snowboardinglandscape just because it's--forgive the pun--cool. Ever sincehe was a teenager, Burton thrilled to the feel of gliding on thesnow. "I really felt there was an opportunity for[snowboarding] to evolve into a sport," he says."I've always felt that way."

Not everyone plunges into a hip business heart-first, however.Shaw tells of one fellow specialty coffee retailer who discoveredfirsthand that business and pleasure don't always mix."Someone came in [to her store] and said he wanted to learnall about the business," recounts Shaw. "So [theretailer] said to him, `Well, grab a cup of coffee, and I'llsit down and talk to you.' "

The punchline? You guessed it: The would-be coffee moguldidn't even like coffee.

Contact Sources

Burton Snowboards, 80 Industrial Pkwy., Burlington, VT05401, (800) 881-3138, (802) 862-4500;

Classique Inc., 203 Commack Rd., #135, Commack, NY11725-3437, (516) 754-9144;

The Coffee Beanery Ltd., 3429 Pierson Pl., Flushing, MI48433, (810) 733-1020;

The Marketing Resource Center Inc., 2729 ExpositionBlvd., Austin, TX 78703, (512) 469-1757.