By Scott Nishimura firstname.lastname@example.org
Tom Buxton says he doesn’t spend any time looking in the rearview mirror.
“We don’t look backwards, we’re not going that way,” says Buxton, 63, who left an executive’s job at Tandy Corp. and founded Buxton, now a leading customer analytics firm, 20 years ago. “But we’ve never had a bad year in 20 years. We’ve grown every year.”
Buxton started the company with small offices in the City Center downtown and himself as lone employee. Today, the firm, which operates from the Mercantile Center in north Fort Worth, has 125 employees and clients in retail and restaurants, health care, consumer packaged goods and governments.
The firm, which uses continuous advances in technology to identify likely customers, how much money they’ll spend, and best possible locations for everything from grocery stores to hospitals and check-cashing kiosks, signed on its 3000th client this year. The firm works with 800 cities nationally to help them identify their best retail growth opportunities.
“We generate more tax revenue for cities than anything,” Buxton says. “We touched over 20 percent of all retail growth last year. It’s into the crazy numbers, crazy numbers.”
“Once we know your customers looks like this styrofoam cup,” he continued, holding a cup during a recent interview at his company’s offices, “then all we care about is finding every customer that looks like this styrofoam cup and figuring out how much that customer will spend.”
Buxton, whose only other partner is CFO David Glover, who joined the company within months of its founding, sat down recently for a discussion with the Business Press.
On the idea for the business
I started with RadioShack as a forklift driver and grew up to run the retail worldwide development, real estate and design. Doing that, you really have a great view on companies’ strategies for growth. And they were not scientific. RadioShack at the time I think had 13,000 stores. Our mantra was within five minutes of where everybody lives in America. But a whole bunch of our stores on a re-occurring basis never made any money, It couldn’t all be management. So I started going, is there a science behind this.
On the entrepreneurial leap
We’re a company that has no debt, we have no outside partners, we own it all. We own the building. Fortunately, in my tenure with Tandy, it was such a rockstar company that I made good money there. Our stock was terrific; I built a great network and was able to fund it all myself.
What did the startup cost?
We’re a business that kind of has the philosophy that says sell it, then build it. We’ve never had any venture money, ever, not a dime. I never went back and figured (startup cost) out. If I had, I’d have probably freaked out,
I got Bass Pro to hire me one week a month as a consultant to help them roll out stores. We brought their store to Grapevine. That was their second store they opened. Pretty quickly after that, we started doing business with Mr. Payroll, a kiosk check chasing business. Today, we have clients like FedEx. We handle all FedEx data, all 60,000 of their locations.
On the science
We look at the lifestyle characteristics of customers, not the demographics of customers. You and I may be the same age, same education, same income, but you may golf and I may hunt. So if you marketed golfing to me, you’re wasting you’re money. If you put a hunting store in the middle of a bunch of golfers, your store’s going to fail. Pier 1 – we’ve been doing business with Pier 1 for 19 years now – thought their customer was female, college-educated and made $50,000 a year. If you think about that, that’s pretty good in Kansas. That is on food stamps in New York. A great example is Camp Bowie [west of Interstate 30 in Fort Worth]. One side of Camp Bowie is Westover Hills, and it’s the highest income. The other side is lower-income, but when you blend them, it looks like a perfect income. And there’s been so many retailers go on Camp Bowie, and all of them have failed, because it’s not their customer.
On what’s changed in the science
I don’t know, there is a lot of difference in the theory of the science. You hear all sorts of stuff today about big data. There was big data back then. Tandy had 250 million addresses on households. What’s changed is the speed of computers. What took us 20 years ago a month to do might take me less than a minute to do today. With the technology that exists today, cookies and stuff like that, you can determine what somebody cares about.
On how Buxton helped the Romney campaign identify and convert donors who’d never donated before
What we do is [search for] lookalikes. We had the voter file, everybody who’s ever voted in a presidential election. We had all of our internal data; I think without a doubt, we’re the biggest data house in America. We had probably every political data source, who’s a Democrat, who’s a Republican, who’s donated in the past, who hasn’t donated. You create a profile that says here’s a person who donates X amount of dollars, here are my lifestyle characteristics. Then we [have] that huge lifestyle database we have show me every other person who looks exactly like me that’s never donated. We helped craft a way to reach them that would engage them in the campaign, and it did and was very successful and raised a lot of money.