John Moore is a fellow Texan and business blogger focusing on marketing. His blog, Brand Autopsy has a very loyal following (including yours truly). He and I also share an interest in social media. In the following article, published earlier this month at Marketingprofs.com, John lays out five “jumbo shrimp business rules” for small businesses who want to become larger businesses.
When small businesses dream, they usually dream of becoming a bigger business. When you think about it, nearly every big business began as a small business. Nike’s first sale came from the trunk of a car. Dell shipped its first custom-built computer from a college dorm room. And Starbucks began its life as a mom and pop coffee shop.
However, a bigger business doesn’t always equate to being a better business. At some point, big becomes bad. Big becomes a matter of being convenient rather than being unique (McDonald’s). Big becomes a game of market share not customer care (Wal-Mart). Big becomes ubiquitous (Microsoft).
It seems by the time a small business gets big, it’s time for it to act small again. Paradoxical? Yes. Impractical? No.
There are countless businesses which have managed to get bigger, but still retain their semblance of smallness. They get bigger by acting smaller. In essence, these businesses are like Jumbo Shrimp—big, yet small.
How can your business can get bigger by acting smaller? You can start by following these five “Jumbo Shrimp Business Rules.”
Rule #1 | BE THE BEST, NOT THE BIGGEST
Jumbo Shrimp businesses believe getting to the next level is not necessarily about increasing sales or size—it’s about becoming the best at what they do.
Cabela’s (www.cabelas.com) personifies this business philosophy. What started as a micro-business selling hand-tied fishing flies has evolved into a macro-business generating over $2.0 billion in yearly sales.
Cabela’s growth has been a result of striving to be the best hunting, fishing, and camping retailer rather than trying to be the biggest. Cabela’s is so dedicated to being the best retailer of outdoor goods that company executives have gone on record saying they do not intend to open more than 40 or so locations. This discipline on prudently opening new locations will allow Cabela’s to continue focusing on building bigger, better, and more unique stores.
Jumbo Shrimp Action Step — Focus efforts on being the BEST at whatever you do. Become recognized by your customers and by your industry as always delivering the BEST products, the BEST services, and the BEST customer experiences.
Rule #2 | LOVE YOUR BUSINESS
Jumbo Shrimp companies begin more out of love, than out of an opportunity to make money.
For the past five years, the movie theater industry has seen steep declines in box office sales. But the Alamo Drafthouse (www.drafthouse.com), a small movie theater chain based in Austin, TX, is bucking this trend big-time. With its seven locations in Texas, the Alamo has seen double-digit year-over-year sales growth since being founded in 1997 and sales last year eclipsed $25 million.
The root of Alamo’s success is in its love for movies. The folks running the Alamo are movie buffs. They’ve created a concept that appeals to other film freaks and to movie-goers craving a more exciting and inspiring experience. Milk Duds® and Twizzlers® won’t suffice an Alamo moviegoer. That’s why the Alamo serves dinner and drinks during each show. Because real movie freaks disdain on-screen advertising, the Alamo doesn’t show them—never will. Instead, the Alamo creates its own wacky pre-show entertainment full of homemade commercial spoofs and wacky previews from obscure and offbeat films. The Alamo is so cool, Quentin Tarantino chooses to host his own movie festival at the Alamo every year.
In addition to achieving higher sales and a growing customer base of raving fans, the Alamo has been recognized by Entertainment Weekly magazine as being the “Best Movie Theater Chain” in America.
Jumbo Shrimp Action Step — Follow your folly. Be passionate about the business you are in. If you aren’t passionate about your business, chances are customers will recognize your indifference and take their business elsewhere.
Rule #3 | PASSION ATTRACTS PASSION
The passions that go into creating a Jumbo Shrimp business can inspire the passions of those who work for the business.
Passion has propelled The Guitar Center (www.guitarcenter.com). Its employees are passionate about creating music and so are the customers who shop there. The Guitar Center began in 1961 as a small store selling organs in Hollywood, CA and is now a $1.8 billion-dollar business with nearly 200 locations from coast to coast.
Employees at each Guitar Center location are typically aspiring local musicians who also serve as company evangelists within the local music scene. Because these employees love music, they love sharing their passion for creating music with Guitar Center customers.
Jumbo Shrimp Action Step — Don’t settle for hiring “warm bodies.” Hire passionate people. Every employee you hire might not be passionate about your business, but they should have the ability to convey passion to customers and to fellow employees.
Rule #4 | TREAT YOUR EMPLOYEES AS FAMILY
Jumbo Shrimp companies develop meaningful relationships with its employees that go beyond being professional to being personal.
The Container Store (www.containerstore.com) is a Dallas-based privately-held company specializing in selling boxes, bins, and everything in-between. The company has been highly successful with sales in 2006 topping $500 million despite having only 39 locations in just 18 markets.
How has the Container Store been so successful when so much of what they sell can be found at mega-retailers like Wal-Mart? Simply put, the Container Store recognizes competitors can replicate its products but they can’t replicate its people.
New Container Store employees are given more than 240 hours of training in their first year (compared to the industry standard of seven hours). Employees are paid two-to-three times more than the industry standard. And employees are given a generous 40% discount for anything purchased at the store. The Container Store astonishes its employees so that they will astonish its customers.
For all this attention to treating its employees like they would family, the Container Store has attracted devoted customers and been named by Fortune magazine as one of the “100 Best Companies to Work For” ranking in the top six in five of the last eight years.
Jumbo Shrimp Action Step — Practice the golden rule. Treat employees as you would like to be treated and the company will be ultimately rewarded.
Rule #5 | REDEFINE SUCCESS
Most businesses measure success by focusing on the impact sales have on topline and bottom-line numbers. Many Jumbo Shrimp companies, on the other hand, define success by the impact they are having on the lives of customers, suppliers, etc.
Derek Sivers began CD Baby (www.cdbaby.com) in 1997 as a way to sell his band’s CDs online. These days, CD Baby is the largest online retailer of CDs from independent musicians. While you will not find the latest Beyonce CD for sell at CD Baby, you will find the debut CD from an emerging artist like Lemme (www.cdbaby.com/cd/lemme) for sell on CD Baby.
The mechanics behind CD Baby favor the musician all the way. The musician pays CD Baby a one-time $35 setup fee and sends the company 4 CDs to stock. The musician sets the retail selling price and CD Baby keeps $4 from each sell with the musician getting the rest.
What makes CD Baby truly remarkable is how the company measures success. The company is more proud to report that they have paid out nearly $45 million dollars back to musicians then they are about reporting CD Baby-centric numbers.
Jumbo Shrimp Action Step — Measure impact. Find ways to measure the impact your business is having on making others succeed. If your customers succeed, most likely you will also succeed.
As these businesses have illustrated, a small business can indeed get bigger by acting smaller. All it takes is purpose, passion, and persistence to practice the “Bigness of Smallness” and any business can become big, yet act small.
John Moore has made his mark in the marketing world by creating, championing, and implementing marketing ideas and branding ideals for Whole Foods Market and Starbucks Coffee.
Today, through speaking engagements and through his Brand Autopsy Marketing Practice, John shares business and marketing advice with companies aspiring to become the next Whole Foods or Starbucks.
He has been recognized by Fast Company magazine as a “leading practitioner of the arts of customer service and marketing” and serves as a Standards Council Advisory Board Member with the Word of Mouth Marketing Association.
John is also the author of the Brand Autopsy blog and the author of TRIBAL KNOWLEDGE: Business Wisdom Brewed from the Grounds of Starbucks Corporate Culture (Kaplan Publishing).