Should you abandon hope of repeat sales if your business customers have a high attrition rate? No way, says Larry Gaynor, CEO of a Farmington Hills, Mich., wholesale distributor of beauty products to salons. "Our customers rarely have a business background," says Gaynor. "They have to learn the hard way. We help them become business-oriented so they can stay in business."

Nailco Salon Marketplace was the first company in the industry to establish a business ecosystem providing services such as malpractice and liability insurance, 401K plans, credit-card financing, fax-on-demand material safety data sheets, and marketing support for signage and direct mail. The $32-million, 160-employee wholesaler offers customers these services at cost. "We leverage our suppliers to provide services that customers didn't know existed or didn't have access to," says Gaynor. "The ecosystem goes beyond exceeding customer needs--it anticipates them--which is the ultimate in customer service."

Program results have been spectacular. Fifteen thousand salons participate in at least one of the ecosystem services. "Customers write to us all the time saying that they love the services they receive," says Gaynor. "Retention of current customers has increased 30%, and order size has increased 35%. Referrals account for 85% of new customers, up from 70%." Gaynor notes that salon owners can choose among multiple suppliers with comparable selection and price. The long-term relationships forged by the ecosystem encourage them to choose Nailco.

Copyright 1995 G&J USA Publishing