By John Howe
Michael Coles, founder of The Great American Cookie Company, advances this formula when he discusses what he considers critical to establishing customer loyalty.
Here’s the translation: Product plus Experience plus Service equals the Experience Factor.
The experience factor is the way a customer feels about a business, and in part determines whether the customer returns or goes elsewhere. The product offered must be good, to be sure, but the emotions generated are important too.
Coles addressed a group of M&A advisors attending the week-long Certified Merger and Acquisitions Advisor program at Kennesaw State in Georgia, which is jointly presented by The M&A Source and the Coles College of Business. I was fortunate enough to attend, and hear his presentation in mid-March.
Coles co-founded the company in 1977 and grew it into the largest franchisor of cookie stores in the United States with sales reaching over $100 million before he and his partner sold. He went on to apply his energy as CEO and President of Caribou Coffee Company. He now is working on a book which explores ways to capitalize on the “experience factor”.
Coles explained that the company he founded was successful in part by offering good cookies that people didn’t need but very much wanted. Filling mall locations with the wonderful smell of fresh cookies baking in the oven certainly contributes to the experience and attraction.
When it came to the coffee shop business, Coles said he found happy and positive staff people who were passionate about coffee and eager to please their customers helped the Caribou chain distinguish itself to compete effectively against better known rivals.
Coles is not alone in believing strongly in the “customer experience”.
Recently I listened to a podcast interview conducted by “How I Built This” host Guy Raz with Kendra Scott who started a jewelry business in a spare bedroom in her home in Texas. This followed a failed attempt at age 19 to start a store offering nothing but hats. Unlike the hat enterprise, her jewelry caught on.
Her aha moment came when she moved from selling strictly to other retailers to open her own store. Rather than displaying products in locked cases, she put them out for customers to try on. She even provided a design station where customers could pick out gems that were then placed in fittings right in front of them.
Up ‘til then, she had been catering to the tastes of buyers for other stores rather than focusing on the customer and making the experience of buying fun. That pivot changed everything.
Today, her products are featured in such retail powerhouses as Nordstrom and Bloomingdales. The business has over 50 of its own stores. Last year it attracted an investment from Berkshire Partners which values the company north of $1 Billion.
These two examples are exceptional, but there’s a takeaway here for anyone in business.
Consider the formula that has worked for them: P+E+S=EF
"The entire process went smoothly and professionally. The BTS team kept me fully informed at every step. They worked hard and were effective in bringing the deal home."
"Skip and I continue to be grateful for all you have done to make the sale of Pure Flow come to fruition."
"BTS’s level of expertise in the process and close attention to detail enabled us to successfully navigate the deal."
"These types of transactions are often long and complicated and I doubt it could have been successfully completed without your close ongoing involvement."
"The outside objective point of view that you have brought us has been invaluable as we prepare for the rapid growth."
"John then found the right buyer and coordinated a seamless transition—he doesn’t miss a single detail."
"John immediately identified our strengths and experiences and discussed a business that ultimately was more in line with our goals."
"The BTS team came in, evaluated everything in a professional and thankfully non-threatening manner."
Private Equity Trends
More and more PE firms are searching for smaller transactions. The reason for this is simply competition
Using a Specialist in M&A
While using an industry specialist to market a company may save a few days in preparing the offering materials, there is the danger of a cookie-cutter approach.
Legal Breakfast Series: How I Sold My Company - A Case Study
Attorney Peter Burger and John Howe of Business Transition Strategies will be the featured speakers during the latest Orr & Reno Legal Breakfast Series on Wednesday, June 14 at the Orr & Reno offices
What's Next Really Matters
The book explores the exits of owners ranging from the good to the bad, from the joyful to the ugly...Often overlooked is the reality that after the closing, everything will be different.
Staying Current to Help Clients
Twice a year we attend a deal expo with private equity groups and strategic buyers...Connections made at this event broaden our list of people who will take our calls, answer our questions, help when
Overcoming Fear of Public Speaking
Communication skills are critical in business, and overcoming fear of speaking is fundamental...it can be the difference between getting a sale or missing out.
P+E+S=EF, a winning formula for Michael Coles
The experience factor is the way a customer feels about a business, and in part determines whether the customer returns or goes elsewhere.
Tailwinds Continue for M&A Deals in 2017
There are good indications that the favorable tailwind continues for M&A activity in the coming year. Key indicators paint a clear picture: buyers are actively seeking opportunities that advance thei
Why Consider a Buy Side Transaction?
There is also a truism when it comes to growth, “It is much faster to grow through acquisition than organically one customer at a time”.
Is 2017 the time to act?
Wrapping up 2016, and considering key initiatives of the year, we see trends that we believe will continue for New England M&A in the year ahead. Key things we are seeing:
Precision Machining Company
Initially, liquidation was a serious consideration. It would offer a quick exit but would hurt loyal employees and disrupt the customers who had come to rely on its quality production.
Green Product Company
Our client owners could dig in for the long haul…However, this would take five years or more. Owners simply lacked the horsepower to do it.
Water Purification Company and Young Buyers
Owners decided they wanted to retire. They also wanted to be fair to the staff who had been loyal to them. Could the company be sold, the staff retained and the facility remain in use?
Magnetics Company with High Profile Customers
(T)he manufacturer would need to focus on growing EBITDA to capture interest from major strategic buyers and achieve a higher multiple of earnings.