Self Taught MBA: Going to Where the Going is Good, Part 1comments (3) August 28th, 2012 in Blogs
Although one thing kept nagging at him, the word "Nebraska" in his company name implied a statewide presence. In fact, the company received a steady stream of calls from far off rural areas; calls that Jim's sales crew would regularly turn away. Jim had sought to find local contractors to recommend, believing no customer should be turned away without at least a solid referral, but he hadn't found anyone he could vouch for.
One day, not long ago, Jim picked up the office phone and on the other end was a homeowner calling from Western Nebraska, hoping to get a quote on a very little job, five replacement windows. "I'm not sure why, but I decided to bid the job," said Jim, explaining why he believed God was shepherding him toward new pastures-or prairies. The sales crew laughed, and wished him luck on the five hour drive to bid five windows. But Jim jumped in his truck, sold the job, and then ran the installation, and sold another job, and then another.
"We've sold over $500,000 in our first three months here, and we're on target to exceed $2-million this year," Jim told me, and I could hear hammers and saws wailing in the background. He sounded excited. It was clear Jim had discovered-or been led to-a gold mine. But his experience is not unique.
"This is our new business model," Jim went on to explain, although the town of Ogallala has a population of less than one-fiftieth of Lincoln, Jim's home base, the actual trade area Jim figures within a 100 mile radius of Ogallala serves nearly 600,000 potential customers. Because of its rural location and small local population, the construction community has remained informal and without the professional management systems Jim developed during his 16-year career in a highly competitive urban area. The sophisticated marketing and customer service systems Jim developed in Lincoln have become the cornerstones of his philosophy for small town success, "We are the most expensive contractor in the area, but we provide a lifetime, transferable warranty on our labor, we source the very best products available, and we try to respond to all our customer's needs, including warranty repairs, within 48 hours," Jim told me.
With this winning formula, Jim hopes to open seven home-improvement centers, all in towns of 5,000 or less, offering high-level customer service within geographic areas unaccustomed to contractors that return calls, complete jobs, and provide reliable warranties.
And I should put a period on this story now, but I have to digress: One of Jim's passions plays especially well in underserved areas, and that's green building, something I've talked about often because it keeps proving itself as viable strategy. "We have an in-house Energy Star rater, so we can not only do the job, but help folks get the certifications needed for utility and tax incentives," explains Jim. As we were about to hang up, Jim spoke briefly about his new shop in downtown Ogallala, a historic building he's rehabbing into a showroom, and the super-high-efficiency residence and warehouse he's building a few miles south. "So, apart from the good business you've established, do you like it in Ogallala?" I asked. "I love it here," he answered.Â
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