Five Best Hometown Businesses

Business: Stitching Post
Place: Dayton, population 170,000
CEO: Joe Fulmer, 41
Key to success: Creating a community so compelling that a customer comes back for life

It looks for all the world as if Joe Fulmer is in the business of selling sewing machines. Walk into his 25,000-square-foot sewing superstore, Stitching Post, and you'll see a fine inventory of elite Husqvarna Viking machines, a kaleidoscopic array of fabric bolts, and enough notions and accessories to launch Martha Stewart into ecstasy. But selling machines is not Fulmer's real stock-in-trade. He has created a stitcher's oasis -- a place where people with a common passion come to socialize, to learn, to advise -- and by the way, to buy. That's how Fulmer grew his father's modest shop into a thriving $11-million company with 115 employees and nearly double-digit profitability -- by building a community of customers.

"When I bought the business from my dad, in 1986, it was a 2,000-square-foot store with three employees and $200,000 in revenue," recalls Fulmer. Back then, the business was profitable but static, and the ambitious son knew that he needed to transform it into the kind of company that would sustain his interest and keep him rooted in the city he loved. "I've been to almost all 50 states, but Dayton is a great little town," he says. "The people are nice, it's easy to get around, and I can get from my house to downtown in 12 minutes."

Success in Fulmer's industry can be elusive. People used to sew their own clothes to save money; the downtown sewing store was a mainstay of most communities. Then clothing prices dropped, the big chains began carrying sewing paraphernalia, and the mom-and-pops slowly failed. To survive, Fulmer knew he had to woo a new breed of customer -- affluent women who sew because it's relaxing and creative. The Stitching Post had always attracted brand-conscious customers who were so dedicated to their craft that they would spend several thousand dollars on a sewing machine. But Fulmer needed more of them, and he needed to keep them coming back.


His education program is perhaps the most remarkable of his loyalty-building activities.


He began to turn the Stitching Post into the kind of place where customers would drop in again and again, making friends with one another -- and with his salespeople. He expanded the modest instruction program his father had started into an extreme version of "education for life." He holds a minimum of eight coffee klatches each month. ("They don't do any sewing," he says, "but when they're here, they buy.") And he sponsors in-store charitable events, during which customers sew caps for cancer patients and sleeping bags for homeless children.

His education program is perhaps the most remarkable of his loyalty-building activities. Sure, one can learn basic sewing or the most advanced tailoring here, and everything in between. What inspires attachment is Fulmer's promise: buy a sewing machine from him and get free lifetime instruction about how to use it. In that way, he teaches the customers to outgrow their machines -- and then entices them to upgrade to more expensive models. He'll apply the full cost of a machine purchased within a year toward a better model. He'll also refund the cost of repairing a machine to any customer who decides within 90 days to buy a new one. Moreover, he's been tenacious about marketing and has increased his advertising budget, spent largely on local newspapers, by 20% every year. It costs him, he says, about $80 a head to lure new customers into the store.

All those activities translated into steady revenue growth, and by the mid 1990s, Fulmer moved his operation to a larger location. He also opened Stitching Post outposts within eight Jo-Ann Fabrics & Crafts stores in the Dayton and Columbus areas. Jo-Ann's takes an 8% commission on sales at its stores, and Fulmer expands his reach with minimal investment.

Last August he opened an even bigger and better Stitching Post, a store he says is a direct reflection of his customers' desire for bigger aisles, better lighting, bigger classrooms, and a wider variety of merchandise. He now offers 60 different classes that he hopes will drive demand for high-end machines and their pricey attachments. (There are $18,000 worth of options for the top-of-the-line, $5,499 machine.) Last year revenues increased to $11 million, up from $8 million in 1999.

Fulmer sold 8,000 sewing machines in 2000, making him the largest Husqvarna Viking dealer in the world. The machines, accessories, and software account for the lion's share of the company's profits; almost everything else he sells is either marginally profitable or sold at a loss. But that's part of Fulmer's plan, too. Every item sold and every service offered is designed to maintain the community he has created -- one that has helped him fulfill his dream of turning his dad's business into a true growth company and of staying close to home.


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