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Small is Successful

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Last Updated: 08/13/2013 4:03 pm
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The prospect of having CVS virtually around the corner doesn’t please co-owner George Nekos, but he doesn’t seem all that worried, either. This is because his business is already—you guessed it—differentiated. A significant percentage of revenue comes from medical equipment, a “line of work no chain store wants to get into,” according to Nekos. He also recently took the pharmacy into the sterile compounding business, with a sparkling lab that’s on view to customers. That’s another line of business chain stores like CVS will never get into—and it just happens to have bigger margins than commodity prescriptions.

An equally important differentiator is—and here, again, the refrain is familiar—customer service. “We want to be like the bar in ‘Cheers’—the place where everyone knows your name,” he says. “We try to greet our customers within a minute. We have a lot of elderly patients who have trouble getting out, so we offer free prescription delivery five days a week in Kingston.”

The company’s phone system offers another example of the pharmacy’s commitment to personal service. “It’s state of the art,” says Nekos, referring to the nondigitized perfection of the human voice. “It would be easy to set up an automated multi-menu answering system, but we haven’t done it. Why not? Because our customers want a human being to pick up that call. Would it be easier for us to be automated? Yes. But we’re here for our customers.”

In the battle against the big-box stores, it helps to have market forces on your side. This is the case with Nature’s Pantry, a locally owned alternative grocery store with shops in Newburgh and Fishkill that “had a great 2009,” according to supplements manager Sarah LaVallee. In recent years, all the major supermarkets have opened natural foods departments, as has Walmart, which has made a major push into organics.

So are the big guys eating Nature’s Pantry’s (organic) lunch? Not at all! “We welcome their involvement,” says Erin Sine, general manager of the Fishkill store. “They give exposure to what we do—it’s like free marketing!—and they can’t compete with our expert staff. At the big stores, if you have a question, you can have trouble finding a sales clerk, never mind a useful answer. At Nature’s Pantry, all our customers’ questions get answered.”

If this sounds familiar, congratulations: You’ve been paying attention. In the competition against the big-box behemoths, customer service is the name of the game.

Make that the name of one game. The other is—all together now—differentiation. “We offer lots of local products that the big stores don’t bother with,” says LaVallee. “We also carry niche products like the Crystal Star line of herbs that you won’t find at Walmart. And we have the largest bulk section in the area, which saves customers lots of money.”

These success stories aside, the power of the national stores mustn’t be underestimated. They’re ubiquitous, they’ve got deep pockets, and they’re also, to put it bluntly, sneaky. A recent Office Depot ad depicts a Big Bad National Company opening a $6 haircut establishment (“Nitro Cutz”) directly across the street from a locally owned barber shop. How does the little guy prevail? By going to his friends at Office Depot, where he has a big ol’ sign made reading, “$6 haircuts fixed here.” The result: Nitro Cutz closes down six months later, leaving our local barber to live happily (and grow wealthy) ever after. That’s right, folks: Office Depot is the ally of locally owned business! Who’d have thought it?

Is this a bogus proposition? Of course it is. Hypocritical, too. The last person you’d expect to agree with the advertisement’s premise is Paul Solis-Cohen of Catskill Art & Office Supply, who faces direct competition from the local Office Depot. Improbably, though, he does. “I love the big-box stores!” he gushes. “They’re very good adversaries and I relish competing against them. They make my business look great by comparison and they make me better at what I do.”

Solis-Cohen isn’t being disingenuous. Crack open his enthusiasm and you’ll find a pearl of wisdom there. Business has an outer and an inner game. The outer game is about strategies like the Big Two of customer service and differentiation. The inner game is all about attitude. More specifically, it’s about copping an attitude—an unabashedly positive (though realistic) one. You have to relish the competition, and you have to believe that you can and will win.

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