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Sunday, August 21, 2011

Ask the Experts: How Do We Keep Our Original Customer Base? (via BNET)

(Excerpt Via BNET)

By Harper Willis




The Owner: Mitch Goldstone


The Problem: Mitch Goldstone and his partner Carl Berman started Orange County, Calif.-based store ScanMyPhotos.com in 1990. They offered super-fast photo scanning, up to 1,000 photos in five minutes. Over the next 10 years, their local customer base grew but so did their national sales. “People would come to us from all over the country,” says Goldstone. “Someone once brought us 24,000 photos, which we scanned for them in less than a day.”


They launched a website in 1998, and soon after, 40% of their business was being done online. “As technology progressed, and digital cameras and smart phones started to replace traditional cameras, we did more business online and our retail sales dropped,” says Goldstone.


Around 2005, sales dropped to around $200,000, which was lower than they’d ever been. Goldstone knew it was time to think about closing down the store, but he didn’t quite have the confidence to go 100% digital.


That changed in 2008, when ScanMyPhotos got its big break. David Pogue positively reviewed the service in his New York Times technology blog, which gave the company 40,000 hits to its website — overnight. “This review led to scores of other reviews, and our digital sales exploded,” says Goldstone.


The company finally shut down the retail store in July 2011, and moved to a large corporate office down the block. An agreement with their old landlord allows them to keep a sign on their old store’s door explaining the move.


The choice made financial sense. They were already doing 90% of their sales online and the retail store wasn’t pulling its weight. Still, Goldstone is concerned that shutting down the store is going to cost him his most loyal customers and sever his connection with the community.


“We spent 21 years developing a presence in our community and winning over thousands of die-hard loyal customers. I don’t want them see our empty retail location and think we’ve gone out of business,” says Goldstone. “They may not make up a big percentage of our sales at the moment, but in some ways those customers are the foundation of our business.”


Goldstone has explained the move on his website, but he wants to know what else he can do. “How can I make sure I don’t lose touch with our community and our old customers now that we’ve gone digital?”

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