A Small Business that Got Big

Lest anyone think that MTS is anti-big business, let me set the record straight.  What we’re about here is fair competition.  Big companies  aren’t inherantly evil (with a few notable exceptions).  Every large business is just a really sucessful small business and we should try to learn from their successes (and their failures).

rei_logoCase in point:  Recreational Equipment, Inc., better known as REI.  Lloyd and Mary Anderson started the mail order business in 1938.  Operating as a member-owned co-op, REI’s income before distributing member dividends in 2008 was $82 million dollars.  Member dividends totaled almost $73 million.  In fact income was down compared to 2007 while dividends were up.  [Full disclosure:  As an REI member I received a 2008 dividend of $14.10.  It would have been higher, but I usually shop the sales.  Also, having a son who works there, birthdays, Fathers’ Day, and Christmas are a steady source of outdoor gifts for the family. ]

Sally Jewell, the President and CEO had this to say in REI’s annual report:

“With adversity comes opportunity, and this recession will be no exception.  As people adjust to fundamental shifts in our economy, the outdoors can provide a welcome, affordable refuge.  Fresh air, excise, and experiencing nature with family and friends provide an ideal antidote to the stresses of everyday life, helping deepen our relationships with the people and places most important to us. “

Think about that for a minute!  What is it that you sell that can provide a “welcome, affordable refuge”?  How can you make life easier for your customers while they struggle through a tough economy?  Do your products take them away from their troubles?  Do they make life easier?  Do they provide a better environment?

Your business has a story to tell.  If I’m your customer, or potential customer, I want to know how spending my hard-earned money with you will make my life easier and less stressful.  You have to convey that message to everyone, especially your staff.

Keep in mind that REI sells bicycles costing thousands of dollars.  They sell top-of-the-line equipment for outdoor sports.  They feature quality brands at quality prices.  You might not think that they would see a recession as an opportunity, but with good marketing, excellent service, knowledgeable  associates, and a very effective marketing program, they’re a company to watch.

They’re not over-stored.  They use mail order sales data to determine which markets they should enter with brick and mortar stores.  When they do enter a market, the specialty nature of their merchandise makes the store a destination for outdoor enthusiasts.  And, they have a very liberal return policy.  They just do a lot of things right.

Like I said, they’re a very successful small company that got big.

2 Responses

  1. After reading the article, I just feel that I really need more info. Can you suggest some more resources ?

  2. Thanks for the response. Here’s a link to more information on REI, http://www.rei.com/aboutrei/about_rei.html.

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