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Building a Business Where Customers Matter
By Mark Streich
"What do you call work?"
And with this exchange, the fictional Tom Sawyer created the ultimate outsourcing project: getting other kids to pay him for the opportunity to paint his fence. Since then there have been a few other entrepreneurs who have discovered experiences for which people are willing to pay. Maxine Clark, founder and Chief Executive Bear at Build-A-Bear Workshop is one such entrepreneur, and a beary successful one at that.
Build-A-Bear is a nine-year old company with annual revenues of $360 million, and a market capitalization of $570 million. Their business model seems simple enough: have retail outlets where kids (of all ages) can go and build their own stuffed animals. They're not the first company to do this, but they're certainly the most successful. Ms. Clark attempts to explain the reasons for this success and her philosophy of business in her new book, The Bear Necessities of Business, Building a Company with Heart, cowritten with Amy Joyner.
I will suggest that if you're interested in books that are strictly related to outsourcing or offshoring, you should look elsewhere. Ms. Clark briefly mentions using outside experts for part of her business by explaining her purpose for doing so in the context of "Know what you don't know." If you don't know the details of some facet of business, ask an expert. And if your business is too small to have such an expert on staff, hire an outsider to help.
Even when your company gets to the scale that might make having the experts on staff, it may still make sense to contract the work out to others. Doing so allows you to focus on your company's core competencies and not get distracted by issues only tangentially related to your core business.
In one example at Build-A-Bear, they need to find store locations suitable for their market, and with over 200 stores currently, they certainly have the scale where having such expertise on staff could make sense. Instead, they continue to rely on the firm that helped them find locations currently in use. That firm can remain focused on real estate, and Build-A-Bear can remain focused on delighting its customers.
If it's not an outsourcing book, then what can you (whether you're in a client organization or with a service provider) hope to learn from the experiences of a company that convinces 10-year old girls, their friends and their families to spend money for the right to perform the final assembly phase of a stuffed bear manufacturing business? Actually, quite a bit.
Granted, unless you're a university, you're not going to get many people to pay you for the privilege of writing computer programs for you. The business model is not the only reason Build-A-Bear has been successful. If it were, then I would be reviewing a book by the founder of the business that tried this before Maxine Clark.
Instead, I'm reviewing her inspirational/aspirational book on business, with examples coming from her experiences in the retail industry, including 20 years at The May Company and as President at Payless ShoeSource before starting Build-A-Bear.
At times, it seems a bit too cute for a business book, but it helps explain why she is so successful at connecting with her core market of young girls. Ms. Clark even sees treating customers like kids as an important trait any business should follow. "But being a kid also means having few responsibilities, not needing to worry about things, and knowing someone else is around to take care of you. Aren't those the same traits that customers demand of the companies they frequent?"
She covers the full cycle of starting a business, from thinking about what sort of business you want to create, to getting funding, building a team, finding and keeping customers and growing your business. The examples come from her own business, and from those of companies she admires.
In keeping with the inspirational nature of the book, she drops little sayings throughout to summarize the points covered in each section:
Maxine Clark didn't spend years as an executive just to learn that she could make customers happy by giving away free stickers. She also learned that a business has less glittery aspects that must be tended to in order to succeed. She talks about getting business interruption insurance, keeping inventory in check, thinking about packaging, marketing and the appropriate use of technology.
As a consultant, I found the chapters on finding, impressing and keeping customers to be good reminders of what it takes to remain successful in any enterprise where non-objective factors may help determine who gets the business. If your company makes it enjoyable for customers to use you, they will do so, and often pay more for the privilege.
You may not be as fortunate as Tom Sawyer in getting customers to pay for the chance to paint your fence. And who would have thought that kids would pay to work in a factory? Maxine Clark did, so it may do you some good to read her book.
The Bear Necessities of Business: Building a Company with Heart
Build a Bear Workshop
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