On June 1st, 2011 our sales doubled from what they had been a day earlier. This is not an exaggeration. In May 2011 our Chicago store did about $7,000 worth of iPhone repairs. In June of 2011, just one month later, we did over $14,000 in sales. This had nothing to do with more marketing dollars being spent, some big PR push, or a mention in a major publication. The only reason for this 100% month-over-month increase in sales was this:
Suburbanites will drive almost anywhere but downtown city dwellers will rarely go out of their way for anything.
To understand how we arrived at that conclusion, you need a bit of background info. By early 2010 we had outgrown the shared office space we were renting near downtown Chicago. Half our customers were from downtown and the other half were driving from the suburbs. It was easy to get to us from downtown but was a real pain coming from the suburbs. We thought the best new location would be easier for suburbanites but still convenient for urbanites. We picked a location in a safe but somewhat obscure neighborhood on the far northwest side of Chicago. Located at the intersection of two major interstates (I-90 & I-94) and a 7 minute walk from an El train stop, it seemed perfect. It would be great for our suburban customers and only a bit longer commute for those coming from downtown.
The number of suburban customers remained about the same but we lost almost the entire downtown Chicago demographic. This was really driven home to me one day when I had dinner with a good friend of mine and his wife. She had a cracked cell phone she had been living with for months. She had no idea it could be fixed without buying a new phone. I told her to bring it into our shop and we’d fix it for free in about 30 minutes. She never came in. About a month later we all went to dinner together again and her phone wasn’t cracked. She blushed as she told me that our store was just too far away and she ended up paying $110 to get it fixed near her downtown office. If I couldn’t even get a friend of mine to come in for a free repair, how did I have any hope of convincing random strangers. My lesson had been learned.
A year later, when our lease was up, we corrected the mistake and moved to the Lincoln Park area of Chicago. It’s a well known, well-off neighborhood with tons of high-end restaurants and shops. A lot people who work downtown live in Lincoln Park, a lot of people who live downtown go out in Lincoln Park, it’s home to 25,000 DePaul students, and easily accessible by train. In other words, it’s a location that downtown people find convenient. In addition, our store is located on the western edge of Lincoln Park so it’s still fairly close to the interstate and has plenty of free parking – something the suburban population likes.
This new move was a great success from day one. As mentioned at the outset, our sales in our first month at the new location doubled without any extra marketing expense or effort. And because people talk to each other, twice the number of sales doubles the number of people talking about your business. This means our sales growth has also increased significantly. As an example: The first month at the new location was $14,000 and in March of 2012 – just 8 months later – we did $32,000 in iPhone, iPod & iPad repairs. In other words, our sales were up over 450% in less than a year for an extra $250/mo in rent. Your marketing efforts don’t get any better than that.
So here’s the lesson for all of you entrepreneurs looking to setup a business store front: If your core demographic is high end shoppers from both the suburbs and a major downtown metropolitan area, and you only have the finances to build a single location, make it highly convenient for the downtown crowd. The suburbanites will still come, but if you make it even remotely difficult for those living in the city, you will lose them as customers.