Editor's Focus--The Value of Service

During the first half of this decade, managers in the secure shredding industry have worked to emphasize this point as the competitive universe has greatly expanded, with many of those new competitors gaining market share by offering a lower-cost option.

Competing strictly by slashing one’s prices does not offer the brightest possible future for many shredding company owners. It can also be argued that this is not the wisest way to proceed. Certainly, when Taco Bell comes to town, the owner of an established, high-quality Southwestern cuisine restaurant should not necessarily lower menu prices as an initial response.

The restaurant analogy may be a stretch, but it can be instructive for small business owners in some respects. National chains (whether restaurants or shredding services) enjoy economy-of-scale advantages and marketing budgets that smaller firms generally cannot match.

Provided a small shredding company has successfully guided its way through the past couple of years to build a customer base, how does it retain that base in the midst of a competitive low-cost climate?

Again, the restaurant analogy can perhaps be instructive. Restaurant patrons at times simply want a bag of prepared food served as quickly as possible through a drive-through window. But the market is much bigger than that, and even in the quick-service category, repeated mistakes, indifferent service and poor quality food can cause a diner to reconsider the merits of the dollar menu.

A family restaurant owner can monitor (and head off) mistakes more closely, and loyal patrons understand this. Just as importantly, when mistakes occur, the restaurant owner can be available to help smooth them over.

In the shredding world, this type of availability is exactly where small company owners can distinguish themselves. Mistakes such as late or missed pick-ups cannot be eliminated (either by large companies or small ones), but study after study shows that when mistakes are addressed promptly, apologetically and sincerely, customers are not only forgiving, but inclined to show long-term loyalty. When the apology comes from the owner of the company, this can only add to the positive impact.

Small shredding firms may ultimately find that cost-cutting measures such as joining national or regional purchasing and marketing co-operatives are vital ways to remain independent and viable. But even while adopting these strategies, they would be wise to differentiate themselves in positive ways that reflect a concern for customer service starting at the top.