The supermarket price wars have taken down more than a supplier or two, and the surviving companies have to battle it out.
Baby products retailer GoToddler was threatened when Coles and Woolworths started reducing the price of nappies back in 2010 – by 20%. Given there was limited support from the supplier, founder Francesco Percopo said the environment soon became hostile.
Unfortunately, a restructure was necessary and the small team had to be downsized. But the company survived by doubling its focus on customer service – and creating loyalty. The strategy has proven successful.
“At GoToddler we have always believed that our business model has to be based on loyal customer support, and by offering better service and range. This has proved to be true.”
So many companies fail to win a return on their social media, simply because they don’t know how. But one savvy Smart50 finalist has taken the social media platform and turned it into a lucrative source for business.
Exactus Homes, founded by Ralph and Sandra Brewer, started building relationships on design blogs, providing advice and generally showing themselves as thought leaders in the industry.
The offers soon followed, and on Twitter as well.
“From our social media efforts we can identify $408,000 of confirmed work, and a further $480,000 currently in the planning phase,” they say.
This is just one example of the Smart50 harnessing social media for growth – if you use it the way it was meant to be used, it can be a good source of growth.
Finance companies are often put under intense regulatory scrutiny, and it’s been no different for PAID International.
The company, which ranked 5th on this year’s list with revenue of $8.3 million, ran into trouble earlier this year when Western Australian laws were changed. Overnight, it became a requirement for all short-term lenders to request 90 days worth of banking transactions from applications, in order to assess suitability.
While the process wasn’t totally new to the company, there were processing issues which increased the company’s workload.
It’s easy to see how such a situation would turn customers away. But founder Tim Dean was simply upfront with his customers and told them what had happened.
“We also introduced new ways for the customer to provide the required information more simply and with fewer burdens for them,” he says.
PAID International is a good example of how the Smart50 survive – by staying nimble and adapting.
Changing your business model on the fly is never easy, but Plus Fitness didn’t really have a choice. When the company, which ranked 9th on this year’s list, was faced with customers that wanted 24-hour access, it had no choice but to comply.
“Originally we had a small number of traditional health clubs (big box clubs) in Sydney. Over time we recognised that our consumers’ demands were changing,” says founder John Fuller.
It was the right strategy – the company is turning over $13 million a year and growing at over 100%. Changing models isn’t easy, but sometimes, it’s the hard – and necessary – choice.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
