Entrepreneurs Deborah Harley and her 22-year-old daughter, Sarah-Grace, started 2014 with a bold promise made possible by a new business model.
In mid-December, the pair closed their brick-and-mortar operation in Gastonia, a 2,200-square-foot storefront half dedicated to consignment children’s clothing called The Bunny Patch and half dedicated to monogrammed gear called Wardrobe Btq.
They moved to an online-only monogram-shop operation, with a 450-square-foot office to work from and hold inventory, including T-shirts, purses, sunglasses, makeup bags and sunhats.
And they promised customers that their turnaround time of 10 business days would now be cut to seven.
Whether you’re a small-business owner or a Fortune 500 executive, making good on a promise is a high stakes games with big rewards, experts say. And Deborah and Sarah-Grace’s commitment to cut customers’ wait time by nearly half was a big commitment.
But with a good plan, Deborah says, it can work out well.
The orders are streaming in – and out – faster than ever, the Harleys say. Word of mouth is generating a bigger customer base every week.
They say having more orders helps them maintain their low prices. And the local faithful who still miss the personal interaction of the shop are warming up to the idea of shopping in pajamas with a guarantee for faster service.
“Everybody is so busy now and, unfortunately, can’t plan like they used to,” Deborah said. “If I buy something, I want it yesterday, especially if it’s a gift.”
Three days, 600 bags
Deborah Harley, 55, started The Bunny Patch children’s consignment shop in 2008.
After a couple of years, she began selling a few items that could be monogrammed, and her friend, Jewell, would complete the orders. The monogrammed shirts, bags and accessories were a hit, so the Harleys gradually dedicated more and more of the shop to them, dubbing that operation the Wardrobe Btq., short for boutique.
And just as their Gastonia customers flocked to the scripts and brightly colored threads, so did the national following they developed through their website, wardrobe360.storenvy.com, which was outpacing in-store sales. Orders were pouring in from all 50 states and from as far away as London, Germany and Australia.
That’s when Jewell, who was used to making two or three orders a week, started teaching Deborah to monogram. Deborah began splitting her time between customers and monogramming in the back room. Sarah-Grace managed their part-time employees out front, sent emails and took orders by night.
One popular satchel – dubbed the Cross Your Heart Bag by Sarah-Grace – was ordered 600 times in just three days. The Web traffic was so overwhelming that the president of Store Envy, their website host, called to see whether everything was OK.
Without the inventory to cover the orders, Sarah-Grace had to order more from their supplier. And once the purses came in, Deborah was working all hours of the night to get them completed. The whole process took a couple of months.
“People were really patient,” Sarah-Grace said, but she and her mom knew their seven-days-a-week, in-store/online-hybrid operation wasn’t sustainable.
If they closed the storefront, long-time customers could still order through the website. The thousands of dollars a year they’d be saving on rent could go toward buying more inventory. And without the pressure of trying to monogram and run the shop, they could handle more orders and offer a faster turnaround.
Amazon’s Christmas debacle
Meet customers’ expectations better than the competition, and you’ll gain loyalty and word-of-mouth recommendations, said Valarie Zeithaml, a marketing professor at UNC Chapel Hill’s Kenan-Flagler Business School and author of the book “Delivering Quality Service: Balancing Customer Perceptions and Expectations.”
But keep in mind she adds, “the risk is a lot worse if they make the promise and don’t deliver than if they never made a promise at all.”
Zeithaml cites last year’s debacle involving FedEx, UPS and Amazon, all of which promised packages shipped as late as Dec. 22 would make it to their destinations by Christmas Eve.
But the volume of orders was too high. So even though hundreds of millions of packages bought during the Christmas season did arrive on time, the misstep generated more buzz and more distrust than the success stories.
Zeithaml says before making a promise, a business should have a strategy that accounts for all of the variables that need to be tended to in order to get the desired result, and a “service-recovery plan,” namely what you’ll do if you fail on your promise.
Amazon’s service-recovery plan was to give $20 gift cards and refunds on shipping charges to anyone who failed to get their deliveries on time – a smart move because it brought people back to Amazon.com again, Zeithaml said. UPS also offered refunds on shipping costs.
A promise with a plan
As Zeithaml suggested, the Harleys didn’t make their promise without a plan.
They announced the new turnaround time with a banner on their website, a post on Facebook and an email blast to customers.
And with every item on the site, there’s a notice that says “Please allow seven business days for monogramming and shipping.”
Their online marketplace also needed some updates. No more 600 orders without the inventory to match.
So now, if something does run out, Sarah-Grace immediately puts up a “coming soon” notice for that item on the website. She won’t open it up for purchase until she has the tracking number for a shipment of that product coming in.
They also streamlined some of the decision-making for customers. Instead of listing the font they want in the “description” field, which led to long email chains and more potential for error, they gave customers a shorter list of their most popular options.
It’s been a couple of months since the Harleys revamped their business model and customer experience. For evidence of its success, Deborah points to their savings, sales and sanity.
These days, she and Sarah-Grace work five days a week and leave most of it at the office over the weekend. With a fraction of the rent and utilities and just the two business partners, “more than 75 percent of our expenses are gone now,” Deborah says.
And January – the month retailers dread most because of the post-Christmas shopping hangover – was almost as busy as December.