Tandem ride on a positive business cycle

ABOUT five years ago, Ross and Colleen Powell were determined to own a bicycle retail outlet. But determination alone wouldn’t provide them with the capital to start from scratch.

When they heard that an Applecross-based bicycle franchise was struggling to realise its potential, they approached the owner and eventually bought the business.

The problem, according to Mr Powell, was that the (then) 25-year-old business had developed a poor reputation for customer service, and sales didn’t match projected figures.

“We heard horror stories at how 20 year olds were left running the store, getting paid hardly anything to do it, and having customers coming in asking for help to have one of the workers turn and say ‘can’t you see I’m eating lunch?’,” Mr Powell told WA Business News.

“The level of customer service was really bad, which you can only expect from young kids getting paid very little.

“Our customer base was nearly non-existent, and to begin with they [customers] were very wary of the shop. It took some time to gain confidence in the new management.”

The Powells recognised that, with more than 100 bike retail outlets in Perth, they would have to substantially improve customer service to gain a foothold in Perth’s growing bicycle market.

They started by rebranding the shop as Canning Bridge Cycles, creating new logos, signage and shop layout, and by reconnecting with the community through a range of community-based marketing and public relations activities.

This included placing signage out the front promoting the change of ownership, generating word-of-mouth advertising, and placing advertisements in the local community newspapers.

Mr Powell said Applecross was renowned for its village community lifestyle, so word-of-mouth began by communicating with ‘influential’ people in the community to build credibility.

“It wasn’t that we went the extra mile to win customers back, we went the extra 10 miles,” Mr Powell said.

“We were completely honest and fair, even when it meant we lost out. We serviced bikes with really fast turnaround.

“We didn’t up-sell unless 100 per cent necessary.

‘‘We put people on the correct size bike even if we had to buy it in and we also listened to what they wanted the bike for and tried to put them on the right type of bike.

“We poured everything back into the business to get stock on the floor because previously the choice of bikes was limited.”

Mr Powell said road bikes in particular had grown in popularity in Perth as more people took up group cycling for its fitness and social benefits.

Ten years ago, most riders wanted mountain bikes, he said, but now manufacturers were making road bikes more comfortable for middle-aged men.

“It is not unusual to sell a $20,000 road bike to a busy professional,” Mr Powell said, adding that the market was still evolving.

“The commuter market has also picked up for workers cycling to the city because it is five minutes quicker to the CBD from Applecross on a bike compared to the car and the freeway.”

Mr Powell said by recognising these market changes and implementing branding and customer service initiatives, Canning Bridge Cycles had doubled its staff to six since the takeover and increased turnover by 250 per cent.

“Our customers report being happy to have a nice local bike shop again,” Mr Powell said.

“People feel emotionally connected and when they know you, like you and trust you, they are more likely to buy from you.”

In a competitive retail environment such as Perth, customer service was really important before, during and after the sale.

He said strong branding and visible signage helped his business to stand out from the crowd, while building linkages with the local community and creating a “village feel” created a strong emotional hook for customers.

“This provides a sustainable competitive advantage that is both durable and difficult to copy by larger franchise style outlets that are more transactional based with less emotional connection to the customer,” Mr Powell said.