The 40-year-old head of a concierge services business has seen his company grow significantly beyond its start-up client and physical location on the strength of the "largest marketing system" in the world: Relationship marketing.
Pono Shim had turned down several opportunities to manage various enterprises at Victoria Ward Center in Honolulu before launching concierge services at Ward, a concierge or service assistance business associated with Consolidated Theaters' 16-plex at the center.
Shim, speaking at the BYU-Hawaii school of business entrepreneurship lecture series on Oct. 14, said the initial ideas for his new business came to him in an "incredible dream" in 1998, but he didn't launch it until Consolidated Theaters was nearly ready to open at Ward Center several years later.
While concierge services are usually found in upscale hotels and even some finer retail centers, the idea of linking them to a multiplex theater seemed unique.
The fact that Shim had already established a relationship with the head of Victoria Ward Center, who had tried to hire him several times in the past, plus the 140,000 potential customers a month who come to the theaters, led Shim to jump at the chance.
"I was given the opportunity to own this very unique business," Shim said, explaining that the first goal in his dream called for him to build his business "with no capital. That's nuts. All of my life I'd heard people say it takes money to make money, but I didn't believe it."
He set out to "create ideas that would bring in cash flow," starting out with a program that, among other services, offers its annual subscription members reserved seats at the movies—a very unique idea in the United States at the time. "I had to educate people what a concierge does, and offer them something they could get only from me."
Shim said he bartered some of the first subscriptions in his new program for a $5,000 phone system. The private phone company owner had called him based on publicity. "I thought, oh my gosh, the idea really works," he said, adding he now has 10,000 subscribers.
"I believe the largest marketing system in the world is relationship marketing," Shim said. "Once we start to interact, we can turn strangers into friends."
To illustrate, he traced the development of the history of the videotape industry, which was actually started in the U.S. but was brought to public attention by two Japanese mega-companies: Sony, which required everyone to buy their proprietary beta format equipment and tape; and Matsushita, which made VHS products.
In the late 1970s and early 80s, Sony's beta format led the industry. By the mid-80s, however, VHS caught up; and when it started pulling ahead, Hollywood threw all of its marketing weight behind VHS.
"Sony hoarded [their approach], but Matsushita gave it away for a small royalty. Whenever you have that kind of competition, two things happen: The quality goes up, and the price goes down," he said.
"That's a revolution," Shim said. "When something happens, eventually the world comes to support it. The same thing is now happening with DVDs.
"When I started Concierge Services, many people thought it was about reserved seats. It wasn't. It's about this revolution," Shim continued.
He explained his operation "brings people and businesses together. All I do is sit in the middle."
Shim noted he has been greatly aided by the relative ease of communicating with his members through Internet technology: "The walls [of getting in touch] are so low, but the missing ingredient was relationships. I'm harnessing a consumer base," he said.
Businesses such as Bank of Hawaii, RoadRunner, Jamba Juice and others have come to him with offers he now passes along through his weekly online newsletters.
He explained his services require a weekly newsletter to let subscribers know what new movies are coming out, but it's also an excellent way to pass along frequent offers from his other clients.
"People actually read this newsletter," he said, pointing to a recent promotion he did that helped the Ward Centre Jamba Juice outlet break its $2 million annual goal.
"I don't care where you're from, anybody can do this if you observe certain principles," Shim told the students.