A Case Study


Listening to the Voice of the Customer

Improves the Bottom Line for Store Supply Warehouse


Bob Balk and Harry Leschen started Store Supply Warehouse in the early 1990’s, distributing display cases, store fixtures and supplies to small and medium-sized retail stores. Their business was growing nicely, but they were concerned that the total market was not growing as it had in the past.  Since the number of retailers was not increasing, it was apparent that Store Supply Warehouse would have to take business away from the competition in order to grow. Balk and Leschen realized that to do so they would need to gain a better understanding of the wants and needs of their marketplace.


Because SSW’s primary means of marketing was direct mail catalogs, the company has little day-to-day direct sales interaction with its customers. As a result, there was limited knowledge of how customers feel about their company and its operation, why customers buy from them vs. their competitors, or what might encourage customers to buy more from SSW in the future.


These are basic questions that every company must come to grips with to be successful. Most company owners or managers have an intuitive sense of where their companies stand on these issues, yet it is surprising how many companies don’t have objective, accurate knowledge in these critical areas.


Given the need to understand where they stood versus their competitors from the customer’s point of view, Balk and Leschen contacted Lon Zimmerman, president of Zimmerman Marketing Research. His company, based in St. Louis, had become known for its “Voice of the Customer” approach in helping companies better understand the marketplace.


Through discussions with the owners, Zimmerman identified specific questions that needed to be answered:

What are customers’ expectations regarding delivery time for fixtures and, separately, for supplies?

What types of vendors do they prefer to deal with for these two lines of business, and why?

Why do customers choose to purchase supplies and/or fixtures from a catalog house, and how do they select a specific catalog house like SSW?

What are the perceived strengths and weaknesses of SSW?

What suggestions might customers have for how to improve SSW’s catalog and overall company operations that might cause them to buy more from them in the future?


These questions pointed to the need for marketing research. Many companies have similar questions, but think of marketing research as a very expensive, time-consuming endeavor available only to the biggest corporations through organizations such as Gallup or Yankelovich. But with today’s communications tools and technologies, and a skilled practitioner, the principles for learning about critical customer issues can be applied quite affordably to generate a better understanding for any size company.


To control costs and yet also allow for in-depth discussion with customers, Zimmerman suggested qualitative research rather than a large-scale quantitative survey. Specifically, focus groups were recommended. SSW’s customers were spread out over 30 states, so the cost of travel to conduct in-person focus groups in markets across their territory would have been prohibitive. In-person groups would also have been a problem because many of SSW’s customers in any given market are competitors, which would have inhibited open discussion.


To offset these issues, focus groups over the telephone were utilized. Telephone focus groups involve individuals from similar, and frequently competing businesses across a wide geographic distribution (think 10 participants from 10 different states on a conference call together), participating in the same discussion.  The client, in this case the SSW leadership team, listens in “live” in real time to the discussion on muted phone lines. And technology enables them to pass messages and questions to the discussion moderator while the focus group sessions are underway.


Telephone focus groups are a preferred research method when a company has a wide geographic marketplace, deals with subject that makes face-to-face interaction difficult, and there is a need to limit costs by eliminating travel to do research in various cities.


Participants in the Store Supply Warehouse groups were recruited from customer lists and paid a stipend for their time. To help ensure unbiased feedback, they were not told the name of the sponsor of the research (SSW) during recruitment but promised that the name would be revealed at the end of the session. Two focus groups were conducted, each lasting approximately 90 minutes.


Some of the more significant things learning points that emerged from the research and the actions taken were:


Many times customers ordered from SSW simply because their catalog had recently arrived and was the on top of the pile.  This suggested the need for SSW to increase the frequency of mailings, especially to its own customer base.  By doing this, response rates increased, more than paying for the additional mailings.


Customers noted that they did not believe much of the “hype” in the catalogs they received.  Accordingly, SSW eliminated the highlighting of products with phrases such as “Best Buy”, “Lowest Price”, “New Item”, etc.  Coincidentally, this left more room to display products and made the catalogs less cluttered.


Many customers also mentioned that they first tried SSW because its prices were lower than their current supplier.  Prior to the focus group Balk and Leschen had thought price was number three or four on the list of reasons why people purchased from a given vendor.  After learning about the importance of price to these customers, SSW made sure to consistently price items lower than competition, wherever possible.  When it was not possible, SSW would seek better/less expensive sources for the product


SSW places a small packet of candy in every order shipped as a way of thanking the customer for their business.  They learned from the focus groups that customers not only noticed the candy, and thought it was a nice touch, but were disappointed if the packet of candy did not include a Tootsie Roll.  Every packet of candy now has at least one Tootsie Roll in it.


Knowledge gained from the focus groups allowed SSW to become even more customer focused in its operations. This resulted in continued dramatic increases in annuals sales, the opening of two branch distribution locations, and the eventual successful sale of the company several years later.


This research study validated the mantra Peter Drucker preached for many years: The key to successful marketing is knowing who the customer is, figuring out what they want and value, and then providing it. Better and more up-to-date knowledge of one’s marketplace provides companies a distinct competitive advantage.


Zimmerman Marketing Research, Store Supply Warehouse’s marketing research partner on the study, utilizes focus groups, surveys and customer satisfaction studies to assist clients in improving operations, sharpening marketing efforts, and increasing customer satisfaction and retention. For information about how marketing research can help your company’s growth, contact Lon Zimmerman at Lon@ZimmResearch.com or call him at 314/961-1131