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(Aug. 2003) - A retailer is only as good as its last sale. And customers are only as valuable as their last buy.
In the past decade, the super-sized office supply business equipment retailers have revolutionized the way in which consumers buy a lot of these products. Most consumers would be hard-pressed to describe how one distinguishes itself from another. Customer retention is always a challenging issue in this generation segment of "big box stores" where everything is driven by price pressure.
Another problem for retailers in this class includes e-Commerce shopping. Consumers can easily buy something across the country on the Internet, which often puts the retailer at a disadvantage: Loyalty gets even harder to achieve when there is no store atmosphere and merchandise offerings are similar or the same.
Staples' corporate management is always trying to come up with new ways and devices that tie its organization into an ongoing relationship with the customer. When Staples promotes creative paths that forge a customer link or a bond, it yields loyalty and thus, future potential sales. Staples' marketing strategy for this relationship development initiative is providing services to help its customers' businesses grow.
It's fair to say that a sizable percentage of Staples' customers are, in fact, home businesses, entrepreneurs, start-up enterprises and small businesses. So any sort of expertise or mentoring knowledge that Staples can offer becomes a value-added to its shopper.
On a near instant link through Staples' Web site (www.staples.com) or via in-store computer kiosks (at 1,100 locations), customers can access receivables management and funding on a broad scale through CDS Companies. Having the availability of a completely out-sourced "backroom operation" for a sole proprietor or "mom & pop" business, becomes a vital solution for many of these Staples customers. Micro and small businesses must offer credit in order to complete with giants. This necessary evil becomes a severe drain on a small enterprise, since it now becomes encumbered with additional staff and expenses in order to issue credit and collect on invoices. It becomes a negative distraction to the priority of a small business: making sales and attracting new customers.
Staples wants to be perceived by its customers as a retail organization that helps provide answers to their problems. At the same time it has undertaken a broad responsibility beyond retailing: selecting service providers that have the ability to deliver an enhancement to Staples' customers on a regular, consistent basis. (Staples did not want these associations to be dot.com start-ups. Instead, Staples wanted to be sure it was referring its customers to credible, permanent, and established vendors. The organizations had to have a demonstrated track record of business operations). These outside vendors are vetted by Staples' high standards and quality control. In addition to CDS, Staples also provides a platform for other business providers, including ADP, American Express Equipment Leasing. The Hartford Alliance and others.
Furthermore Staples is giving its customers an important advantage. When its customer is seeking help on business needs, they do not have to do a lot of shopping and research. Staples has already done the pre-qualification for them and says these service providers are "okay".
Bob Gross, who operates Millrock Press, a small printing business in midtown Manhattan was ordering some office computer supplies from Staples' Web site. He discovered the link to CDS. "When you think back in the past year, it is truly amazing how I stumbled upon this method to resolve my cash flow issues," Gross explains. "I was curious to see what Staples was offering with its links. When I read a little further and then brought CDS to the attention of my accountant, who checked them out, we decided we would give them a try."
Gross says that his printing operation, which does promotional printing for large companies, often has to wait for payment and accept whatever schedules these major business use to cut checks. So some weeks they are tight and other weeks they have abundant funds. "CDS enables us to stabilize the situation and avoid this periodic crisis by providing steady cash flow. But I will always remember how I came upon my CDS relationship, through Staples," Gross explains.
Another Staples customer is Mel Fixman who operates a New York Valet Service, a midtown Manhattan firm that provides dry cleaning and laundry services to the guests at major area hotels. "I was picking up some stationery supplies at a nearby Staples store, he recalled. "I was fooling around with their in-store computer for my stuff and decided to look a little further when the CDS link popped up. I looked into CDS and even called one of their customers to verify that everything was on the up-and-up," Fixman explained. "When it comes to my finances and cash flow, I tend to be very conservative before I let anyone get involved. But the fact that a big organization like Staples was recommending them sort of moved me off-the dime."
From this long-term marketing approach, Staples hopes that the small businesses operated by proprietors like Gross and Fixman will lead to business growth. And Staples hopes that in each case, it will be positioned as a "partner" credited in this expansion, resulting in a competitive advantage relationship and more sales.
Leonard Leff is President of the CDS Companies/MyReceivables.com, a Lynbrook, NY-based company founded in 1972 that finances receivables, processes invoicing, handles credit checks, issues statements of account, makes collections and provides cash flow, mainly to small businesses
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