A New York Times CaseStudy Review by: Eli Williamson
Big D Custom Screen Printing T-shirt Printing Austin, Texas Darren Robbins (co-founder) Dispute with business partner about pursuing smaller orders instead of seeking large accounts exclusively Price Rates $5 a tee for orders of 40-499 shirts $3.50 a tee for orders of 1000+ shirts
New York Times formally asked Darren’s question: “Can chasing small customers lead to larger profits?” Darren Robbins Actually set out to test this approach with his company and measured the results by annual financial reports Darren’s Business Partner Tested pursuing large accounts in hopes of larger profit margins in the long run
Shifting the target consumer and lowering price rates Public pricing (transparent pricing) Could this cause a price war? – no, just nasty emails. Annual Sales Reports 2008 - Year One: $325,000 (breaking even) 2009 - Year Two: $675,000 (more than double year one) 2010 - Year Three: $900,000 (nearly triple year one) Overall take-away: Chasing small customers can lead to larger profits “Small-order customers account for roughly 60 percent of our return business. Just as important — if not more — their positive word-of-mouth accounts for 75 percent of our new customers, including some of our largest.” – Darren Robbins
Limiting your targeted consumer to only large clients is a poor decision in attempting to increase revenue I can see how this may work for some larger, more established businesses but not for small businesses and especially not start-ups who don’t have a clientele yet Objections Inefficiencies in targeting small-order clients More wasted product (color correction and test prints) Study Weaknesses Just examines just one business – a small start-up at that One location (initially), inexperienced owners, shedding a business partner after the first year (one less salary) Are the results unique to just the screen printing industry?
Darren Robbins embarked on his business experiment with clear goals as well as an accurate and paced method of measuring his new approach’s success Goal: To become profitable by catering to small printing orders Accurate & Paced Measurements: Annual Sales Totals Yes it is an article, but it is also a case study The New York Times approached the formatting of the story as if it were an experiment Segmenting elements such as: the challenge, the background, the options, the decision, and the results Received insight from readers and other professionals to differentiate opinions on whether Robbins’s decision was right The New York Times released a follow up article a week after the original was published Contained results with concrete numbers in the annual sales reports that proved the correlation between small-order focus and increased profitability in the screen printing industry.