How Much Would You Pay for a Hotdog?
Are you competing on price?
Economists and finance executives world-wide acknowledge that being the low-price leader can be a viable short-term strategy that may help boost bottom-line profits but warn this is an extremely risky long-term strategy. Within the financial services industry margins are already squeezed and products continue to be distinctly vanilla. So what’s left when it comes to high-impact business strategies? Perhaps it’s time for business transformation by way of customer-focused differentiators.
Sometimes one doesn’t have to look beyond their local hotdog cart for inspiration.
Check out the accompanying photo. How is it that in downtown Denver while one hotdog vendor who charges $3.50 for a hotdog, chips and soda has no people at his cart, when a competing hotdog vendor less than 100 feet away has a line of people who are willing to pay $4.75 for virtually the same hotdog, chips and soda, everyday? Simply said, it’s called customer experience.
Meet Biker Jim. Jim Pittenger, a former repo man from Anchorage, Alaska, moved to Denver looking to open his own hotdog cart. Jim knew it wasn’t going to be easy. He was an unknown in the area and opened up several blocks from the main street, where competition was already entrenched. Jim recognized at the time that Denver’s most successful cart owner was occupying the premier location of cart real estate and essentially just had to ‘show up’ each day. If Jim was going to be successful, he knew he had to do things differently.
When I first met Jim, I shared how I had been analyzing his business and asked him to come down to the office to share his story. There, Jim explained, “I knew I had to set myself apart. I challenged myself to think about all the things I could do differently. Ultimately, I knew it would come down to focusing on the customer and the customer experience, and frankly, when I put my mind to it, it wasn’t hard. I sat down and made a list of the things I could do to make for a better customer experience. I studied not only what my competition was doing, I studied what they weren’t doing. I knew I wanted to build great relationships with my customers while making sure I created a great experience. Some of the things that made my list included cranking up some music that people could tap their foot to, and setting up a big umbrella that screams ‘something good is happening.’ I rigged my cart with some nice size exhaust pipes that would send the smell of my grill up and down the city streets. I added condiments that others didn’t, like grilled onions, sauerkraut and cream cheese. Giving the customer more options rather than just a plain hotdog with ketchup or mustard.” Jim went on to say, “Honestly, it’s really not about the hotdog, it’s about the experience.”
Joel Horn of Horn Funding Corp, a client of mine at the time put it this way, “The perceived value of buying a hotdog from Biker Jim is far greater than buying from his competition.” It wasn’t long after my interview with him that Jim’s chief competition was out of business and Jim was invited to take over the premier cart location in downtown Denver, the coveted corner of 16th and Court Place. At the time he was still working the cart each day come rain, snow or sleet, but since then Jim has gone on to international acclaim and even greater success. Biker Jim has expanded his menu, been praised by the world’s foremost food critics and successfully launched into several retail locations.
What are you doing to re-vitalize your business in today’s demanding markets and vanilla products? What kind of customer experience are you building to spark the neural network like Biker Jim? Are you creating a customer experience like I experienced when I was in line for my dog and the guy in front of me called his buddy on his cell phone to make sure he was at the right place? What’s your customer-focused business transformation strategy? Joel Horn summarized it best, “Regardless how bad things are or the amount of fear inspired by the media, if you have your customers’ best interest in mind when creating your long-term vision, you will succeed!”