The Olympic Story
From Rugs to Riches – How Alice Cunningham Became the
Most Award Winning Hot Tub Retailer In the Country
Alice Cunningham, the founder and co-owner of Olympic Hot Tub, has built one of the most successful and award-winning hot tub retail operations in the United States. This is her story.
If there is one thing I have learned over almost 35 years of helping customers take care of themselves it is that we all put this off far longer than we should and run the real risk of paying a high price if we don’t. Stress, chronic aches and pains, sleepless nights and other consequences of a busy, charged life are giving us all a run for our money in more ways that we can count.
With that as an introduction, let me tell you how my company got its start. My future husband, Blair Osborn, was a professor of Mechanical Engineering at the University of Washington and I worked for the U.S. Department of Labor, Employment Training Administration giving out money for job training for the disadvantaged. I had a $60 million budget and 88,000 people on the payroll!
In the spirit of the 70’s we decided that we wanted to answer the question: “Can men and women work together?” by starting a business. So, out of a desire to escape the federal bureaucracy and a half-baked idea that being in business couldn’t be hard – we began!
I said let’s start a business, “How hard could that be?” “How hard could it be?” Our start up capital was $30 K, my entire Department of Labor pension cash plus credit cards and later the sale of a house which netted another $50K. My father was appalled and my friends thought that I was crazy giving up a secure, well-paying, high-level government job with one month’s paid vacation and excellent benefits.
Escaping Boredom and Doing Our Own Thing Meant More Than Security
So we launched Olympic Hot Tub in August of 1977 as a retail wood hot tub business. A wood tank manufacturer in Bellingham made the tubs for us. Why hot tubs? They had only just started in California and seemed to be the “coming thing.” The entry cost was low, because there was no competition and the “industry” was so new. We were the first! In fact, The Seattle Times credits Olympic with introducing hot tubbing to Seattle. Plus, I loved soaking in a hot tub and thought everyone should have one!
Many Obstacles and Opportunities – So Much to Learn
Business was very slow at the start. The biggest obstacle? People did not know what a hot tub was! People would stop and ask: “What is it (the big red cedar barrel in the window)? What is it for?” My own banker asked if I liked beans. “Why?” I asked. “You’ll be eating a lot of them with this business,” she replied. No banks would consider a business loan or consumer financing. Along the way, I had to sell my wonderful collection of Oriental rugs and Victorian antiques just to keep afloat.
Having to learn about business was daunting. The transition for me, coming from the Federal Government, where work comes to your “in” box, you complete it and put it in your “out” box, was especially hard. Everything there is done for you and the work is highly specialized. Starting a business requires being a generalist with instant expertise in everything. Phone systems, property leasing, shipping, sales, marketing, buying, advertising, insurance, etc. had to be learned and mastered by either myself or my husband.
No one in either of our families owned a business. We were on our own. Take the example of our first store location. We sat in our living room and made a list of all the things we’d like to have in a space - such as a kitchen, deck, fireplace and location on the water. Sounds like a home, right? We wanted a space we’d enjoy coming to every day and figured if we were happy, the customers would be happy, too. We got in our car, drove to the north end of Lake Union, saw a vacancy sign, found the landlord on site and took the space with everything we’d written down, but not with crucial things like parking, street visibility or being easy to find.
After five years, much hard work and a steep learning curve (I joke that the learning “curve” is straight up), the business was fairly stable, but Olympic faced other obstacles. Competition had sprung up and our only product, wood hot tubs, faced sales diminishing to zero because of the rise in popularity of plastic spas. Too, our product required time consuming and labor-intensive assembly and a full day to install in a customer’s back yard.
Newer plastic spas in the marketplace were self-contained, requiring only delivery, a garden hose for filling and a 110V outlet. Olympic would have failed at this juncture if we had not changed our business, done due diligence and found a line of portable spas we could be proud to sell. This required a complete transition from being a construction company to a sales, marketing & delivery company. We could now deliver four a day not one every two days. Suddenly we needed a warehouse plus more serious sales and marketing efforts.
So we divided the business into halves, each managed by one of us. My husband runs the product and the money. I run the sales, advertising and marketing. Eventually we added additional stores – we now have five and our warehouse and supply center in Tukwila. We’ve grown from two to 45 employees. Over the years the core philosophy of our business has not changed, only becoming more sophisticated and standardized. At Olympic Hot Tub Company, we make it easy to take it easy and in the process provide a product that enhances the lives of others in a way that far exceeds their expectations. We’re customer-driven.
I have developed a total customer service program that makes a hot tub so easy to buy and so easy to own that our customers continue to do business with us and find it easy to refer new customers to us. We continually assess why people buy and why they don’t; what makes them happy and what services they appreciate and expect.
I created a Total Satisfaction Plan to allay customer fears about buying a hot tub after hosting a focus group of customers to determine what the barriers to purchasing were. The number one thing people said to me after purchase was: “This is the best thing I’ve ever done for myself. WHY didn’t I do it sooner??” Why, indeed? Such things as our what if I don’t like it - money back guarantee and happy where it is guarantee or we move it free came out of that first focus group and went in the plan.
We were the first and still one of the only companies in the Northwest to offer free “Test Soaks” - “try before you buy” so that customers would know exactly how the jets and seating feel before buying. Remember the product was so new that people didn’t know what it was and few had even tried one.
We also survey all customers after the delivery. This survey is a valuable tool for giving our staff immediate feedback on the delivery and shopping experience. We average a 54% return rate on the surveys. We break out the results by salesperson and use it as a tool for training in areas that customers rank as weak.
We also attempt to make it easy to own: Our company Newsletter, SPLASH!, is sent three times a year to every customer. It’s packed with information to help with upkeep and to inform customers of new products. By having 800 numbers for service, supplies and sales, we make it easy for customers to reach us. We have a response page on our Web site for customers to use for ordering supplies. We also have pagers, voice mail and cellular phones for all service and delivery crew. We do extensive training for all service and support staff.
We have supplies and parts in stock for all systems we have ever sold. Every contact after the sale counts - be it on the phone or at the cash register. Service staff is encouraged to go the extra mile to ensure customer satisfaction. In a recent letter, a customer wrote that not only had Maria done an excellent job of fixing his spa, she had worked until she finished the job at 7PM on her birthday!” That’s service!!
We give each employee latitude to correct a problem on the spot rather than have problems referred “upstairs” for a resolution - a time-wasting, often frustrating situation for the customer. Superior performance is expected and rewarded with generous compensation and continuous training and development. One employee wrote a Christmas thank you: “I can’t believe I get paid to do what I so love to do and get a bonus.”
Let me share an email I received to give you a sense of the passion our customers share about their experiences with Olympic Hot Tub:“My Hot Spring Spa is the best investment I’ve ever made. We bought it 1½ years ago and I don’t think I’ve missed more than a couple dozen days. Sometimes I go in twice a day…helps my lower back, white noise from jets makes me relaxed, and had a bad fever once I swear was destroyed by soaking. I love to get in the morning with coffee and newspaper and watch the birds fly overhead. Very little maintenance; it seems to keep itself in “good chemistry” with hardly any effort. We know someone who got a different brand and were pretty unhappy - they should have listened to our advice! The best 6K I’ve ever spent and I’d do it again. Great product and you have a great company. Oh, did I mention that we never have trouble finding house sitters because our friends love using the tub! Parties are way better, too. Can’t say enough. Happy holidays." - Katie in Seattle
Another client tells me she doesn’t have a hot tub. She has a “think tank.” While soaking, she got the idea to work half the time and make twice the money, and she is well on her way toward
achieving that goal. Like so many people, she gets all her best ideas when she is relaxed, and her “think tank” is the place to go for those ideas.
With customer feedback like this, is it any wonder how lucky I feel to own and operate a business that I love? I jump out of bed each morning and can’t wait to get started. I know, based on the comments I hear and actively solicit from my customers every day, that our product is making a big difference in the quality of their lives. That just makes me want to spread the word far and wide. After all, not everyone owns a hot tub yet.