National Clothesline

Most drycleaners are so busy fighting fires and just trying to survive that they forget to consider some basic questions about their market.

For example: Where in the market is our company right now?

Do we know how our past actions got us here?

Do we know where we’re going in relation to the competition?

When assessing where they are and where they’re going, drycleaners usually make one or more of the following mistakes:

1. They ask the wrong people.

2. They ask the wrong questions.

3. They don’t know who their real competitors are.

Here’s a closer look at these problems.

Typically, the managers and counterpeople are assembled and asked where the company is currently positioned and what its goals should be. It sounds OK, but it’s a big mistake.

The people inside your organization are prone to internal biases, and are likely to produce a lot of speculation but very few hard facts.

Instead, ask the people who have the answers: your core customers. They are the ones who really understand where you are and where you should be.

Ask what they like about your cleaners and your services, and what they don’t like. Ask what other cleaners they use and what draws them to those competitors.

If you’re talking to anyone other than your core customers, you’re wasting your time and money. Your core customers can tell you more about where you are and where you’re going than anyone else.

For example, for decades Las Vegas was famous for its casinos and adult entertainment.

Then, in the late ’80s and early ’90s, the city did some market research and got some bad news. Of people across the country who had taken vacations in the previous 12 months, only 15 percent had been to Las Vegas.

By limiting its appeal only to gamblers, Las Vegas was leaving money on the table. Obviously, they needed to broaden its base of core customers.

Casino operators decided to position Las Vegas as a paradise for all tourists, including families with small children. They spent millions building roller coasters and water parks, and millions more on advertising to reposition Las Vegas as a family destination.

It worked, except for one thing; having “the family” with them kept many would-be gamblers away from the tables.

A few years later, most of the casino operators realized that the best way to position the city was to go back to their roots. They launched a new campaign, “What happens in Vegas, stays in Vegas,” which was the real reason people go to Las Vegas: the opportunity to let loose, to do things they probably wouldn’t do at home.

This approach has been extremely successful. If the casinos had bothered to survey their core customers first, they could have saved themselves a ton of money.

In 2000, K-mart also tried to reposition itself as a company that could beat Wal-Mart at its own strategy. It cut way back on advertising and lowered the prices on more than 30,000 items.

The problem was that K-mart’s core customers were people who loved sales, and they had positioned K-mart as a retailer that gave them exactly what they wanted. They looked forward to seeing K-mart’s inserts in the Sunday paper with ads for hundreds of discounted items.

But when K-mart went to an “everyday low prices” strategy and stopped advertising, they alienated their core customers, the ones who had been keeping the company alive. Without their core customers, there was no business, and within four months, K-mart was in Chapter 11.

And finally, don’t make the mistake of not knowing who your competitors are. Most drycleaners think they’re competing only with other drycleaners. But in customers’ minds (and that’s all that really counts), drycleaners are competing with home washing machines, the maid that irons, Dryel, laundromats, and disposable clothes — to name but a few.

And that doesn’t even take into account Starbucks, the movie theaters, and thousands of other businesses that compete for the consumers’ limited disposable income.

The way to thrive in the long haul is to leverage your strengths to create a customer-relevant position in the marketplace. That is, you’ve got to create a “sweet spot” that you do better than anyone else.

Your sweet spot can move your business from average, or below, to an industry leader.

Once your business is focused on capturing the hearts and minds of a specific group of customers, you’re no longer in direct competition with your industry rivals. Instead, you’ve staked out a position only you occupy.

Building your sweet spot will ensure that your core customers will become loyal customers, operations will run more smoothly, sales will grow, and profits will be healthy.

All you have to do is one thing that your core customers value, and do it better than your competitors.

Ritz-Carlton’s sweet spot is catering to wealthy executives. At the other end of the spectrum, Marriott Courtyard’s sweet spot is serving cost-conscious business travelers.

GEICO Insurance is in a market crowded with hundreds of competitors, but GEICO insures only low-risk drivers — many of whom will never make an insurance claim. So, the company can charge very competitive rates and still make a healthy profit. It is growing faster than the rest of the industry and has for quite some time.

How economically attractive is GEICO’s sweet spot? Desirable enough that Warren Buffett bought the company.

So how can you go about building your own sweet spot?

You need to offer a service that is valuable to your core customers and potentially attractive to similar prospects. Also, you need a clear understanding of where that sweet spot can take your company, an understanding based on a rational analysis of where your core, and potential, customers will enable you to go.

For instance, Ed Roth’s U.N. Cleaners is in a predominately Jewish community. So he closes on Jewish holidays and supports the local Jewish schools and synagogues.

If you’re lucky, you already know what your sweet spot is. Your core customers have pointed out specific aspects or services they love about your business. Or after studying the competition, you’ve discovered a niche that hasn’t been fully developed by anyone else.

If you’re not that lucky, you’ll need to do some research by asking your core customers the following questions:

1. What other cleaners do you use?

2. Why do you use their services?

3. How long have you used more than one cleaner?

4. What do you like best about the other cleaners?

5. What do you like least about them?

6. If another cleaners offered similar services for 10 percent less, would you switch?

7. f you could create the perfect cleaners, what would it be like?

The magic for a company happens when management matches the realities of their business with a sweet spot that matters to customers.

The answers to these questions will give you a clear, objective idea of how to tweak your company’s positioning to create and dominate a unique and profitable sweet spot.