Business Growth and Developing Your Competitive Edge

• DCS-Koko-Interview.mp3

DCS-Koko-Interview.mp3

Welcome to Business Insight brought to you by DC Strategy, speaking today with Shane Hills of Koko Black, providing a world class chocolate experience.  

The Australian retail space is a very competitive environment.  In order to maintain a competitive edge, a unique and sustainable growth and development plan is imperative for both new and established businesses.   

DCS: So Shane, what were the two top drivers of success in the first store, there in Royal Arcade in Melbourne?  

Shane: Well, the Royal Arcade store is in an area in Melbourne, probably the most concentrated area of chocolate stores in Australia I would say, between Myer, David Jones, Darrell Lee, Haighs, Chocolate Box, there’s quite a few there.  It was always going to be important whether it was in that area or somewhere else that we had a very strong point of difference. 

 All the components that make up Koko Black are quite different. I felt that there was a good story there.  One of the strengths was that we were able to generate publicity. We didn’t have an advertising budget like most start up small businesses, so by doing what we had planned, we were able to generate lots of very positive publicity. I would say that was the first one. 

 The second one was just our commitment to the quality of the product and the authenticity of the produce.  We found our master chocolatier from Bruges, Belgium, so that the product quality was very, very high. Also our commitment to the service.  We focus very closely on a very stringent service standards system set up in the business.  So the second part there through those two things (the product quality and the service), we were able to generate very good word of mouth so the two things together, the publicity and the strong word of mouth really helped us get going. 

And it didn’t happen straight away, it probably was 6 months in before we really started to get some traction happening and really for that word of mouth to get stronger and stronger, but they were the two main things.

DCS: And now that word of mouth has kicked off with regard the issue of customer loyalty and retention, what are the strategies you have in place for those particular issues?   

Shane: Well, like the product, we just focus on being very authentic, we don’t concentrate on any tricks, like sales or customer loyalty cards or any of those things.   

We focus on being what we are, the product quality, the service standards and if people are drawn to that and attracted to that and having a special visit at Koko Black, then that’s where we believe the loyalty for our type of niche business is going to be achieved.

DCS: Ok, so the strategy is really in the product and the service.

Shane: They are the two things that we focus on the most.  Of course there are many different things that make up the service experience at Koko Black.

One example I guess, is our commitment to the production that happens on site, that’s just another element that makes it an interesting place to visit.

DCS: And how do you maintain your competitive advantage over the substantial competition that is in place?

Shane:  I think we’re obviously a very small player and there are a lot bigger companies out there.  But I get a lot of my belief from the passion and the love we have for what we do, and I think it doesn’t matter about the reputation, the size of the reputation or the size of the budget or the size of the resources, I think that a love for what you are doing and the passion within the company, that’s me and a few of the other key people in the business, that passion is a difficult thing to compete with.

DCS: So as you look to scale the business which is what you’ve been looking at with DC Strategy, what are the key issues that you have been focused on?

Shane: I think for us because so much of our business is about maintaining our quality standards, whether it be product or service, of course it is a challenge to maintain that as you’re growing and especially when you are trying to grow at a reasonable rate.  So there are two things, one where we haven’t been there before, amongst the people involved I guess I’m the key person in that. 

 I haven’t grown a business to the size that we are hoping to at the moment. We can, amongst the people in the team, get that expertise amongst the service and product but I think DC Strategy, if you were to cut it down into one thing, it would be that they do deal with businesses day in day out that are of a lot bigger size than us.  They understand the issues that arise as we go through the phases that we are.  And yeah, if I were to put it into one that would be the strength that they would have been able to bring.

DCS: And Shane where to from here, what’s the plan for Koko Black moving forward?

Shane: Because the quality is so important to us, growing at the right rate and maintaining that, is very important.  So we have the goal of leading our niche in Australia and I think Australia is a good place to start; Melbourne and the CBD, and it’s just naturally progressing from time to time. 

I do think about what an international expansion would look like, but it’s not occupying a lot of head space, we are very focused on getting it right here in Australia.

DCS: Shane Hills from Koko Black, thank you very much for your time.

Shane: Thank you very much.

DCS: If you are contemplating an opportunity or challenge in your business visit our website at dcstrategy.com