Matt Lanford proves that the secret to success is simply to be yourself
By Stephen A. Ross
Examples on how not to do things can be potent teachers—and when you’re at the receiving end, bad behavior can be an even more powerful motivator, often leading to a lifetime of success. For Matt Lanford, owner of Santa Barbara Cigar & Tobacco, one such incident of horrible customer service did just that.
In his early 20s, studying law enforcement in San Luis Obispo, California, Lanford was just beginning to enjoy premium cigars. He spent much of his free time at Sanctuary Tobacco Shop and loved everything about cigars. Any time he traveled he sought out local tobacco shops. There was one store in Santa Barbara that he would visit to browse their humidor, but Lanford never felt that he was a valued customer there. Perhaps he kept coming back because they carried cigars that he couldn’t find anywhere else, but one day he just had enough of the rude treatment.
“I saved my money to buy a box of PG Belicoso No. 2s at the store,” Lanford explains. “I had driven 90 minutes to come to the store to buy these cigars, and when I asked about them the owner huffed and complained that he would have to get the ladder to get that box of cigars. I just told him to forget about it, and I left.”
That experience would come back to haunt the retailer. A short time later, Lanford had a conversation with the owner of Sanctuary Tobacco Shop, Doug Shaw, and one of Shaw’s best customers, Tom Georgouses. They asked Lanford what his plans were, and he indicated a desire to run a tobacco shop. Georgouses, who was interested in funding such an operation, asked Lanford where he would like to open the shop. Without hesitation, Lanford replied Santa Barbara. “I thought if there was anybody I wanted to compete against it would be that [retailer],” he says.
Georgouses, a successful construction contractor, provided the funding and arranged a financing plan that would allow Lanford to pay him off and become the store’s outright owner after certain financial goals had been met. They found a location in downtown Santa Barbara—not too far from the shop that had treated Lanford so poorly—and opened in 1996.
A little more than 20 years later, Lanford reflects on his good fortune. Not only did he happen to open a store at the height of the Cigar Boom, but he had also allied himself with a couple of fair men who were interested in his well-being. Shaw introduced Lanford to manufacturers, which eased the product procurement process in those heady days when seemingly everyone was opening a store and getting cigars was so difficult. And Georgouses, who was just in it to have a fun place to hang out, gave Lanford the complete freedom to run the store as he saw fit. It was the perfect scenario for the young Lanford.
“How many people get an opportunity like that?” Lanford asks. “Doug and Tom acted out of the goodness of their hearts, and I owe them a huge debt of gratitude. Tom told me how much money he needed to get for me to buy him out, and within four years the store was mine. It happened much faster than either of us thought it would because in those days owning a tobacco shop was almost like having a license to print money. It was always so crowded. That first Christmas there was a line out the door, and the competitor who had treated me so rudely happened to walk past. He saw the line and his jaw dropped. That felt great.”
While owning a tobacco shop during the boom years might have been almost like having a personal mint, there have also been some tough times, with economic downturns and California’s anti-tobacco atmosphere, which sees an almost yearly attempt to legislate premium tobacco stores out of existence through higher taxes or smoking bans. Yet Santa Barbara Cigar & Tobacco continues to do well despite the difficulties, thanks to Lanford’s top-notch customer service and highly selective inventory management.
Santa Barbara Cigar & Tobacco remains at its original location in downtown Santa Barbara. Like so many of the other businesses in the area, the building that houses the tobacco shop features mission-style architecture complete with a red tile roof. Santa Barbara Cigar & Tobacco is something of a time machine oasis beckoning harried 21st-century denizens to come in, slow down and enjoy a cigar. The interior of the 800-square-foot location has dark wooden display counters filled with accessories from S.T. Dupont, Xikar, Lotus and Prometheus or pipes from Savinelli, Peterson and Viking. A comfortable and inviting smoking lounge in the back takes up approximately half of the store’s space. Decorations consist of dozens of autographed photos of celebrities who have shopped at the store in the last 20 years. And the 150-square-foot walk-in humidor is filled with some of the best-loved boutique brands available, including cigars from Arturo Fuente, J.C. Newman and Illusione.
“Our top-selling brand is Arturo Fuente,” Lanford says. “Fuente makes such an array of cigars that fit the gamut of palates. They’re a great family, too. They take good care of us. They recently sent me a box of 20th Anniversary OpusX. It was unexpected, but it’s cool to be able to carry it. Illusione has been a close second, especially with its Epernay and the Fume D’Amour lines. Those cigars have been killing it for us. Romeo y Julieta sells really well. I gravitate toward selling the boutique brands. Most folks’ palates have gone that way.”
One of the most difficult aspects of being a tobacconist is managing inventory. Countless times tobacconists bring in the latest and hottest new cigar lines and do well with them for a little while. Then they increase their order based on how well that line is selling only to have demand for it disappear immediately after they’ve placed that big order. Then those unwanted boxes sit on the shelf for months until the tobacconist must liquidate them and lose profit. In California, where the tax on cigars will jump from 28 percent to 67 percent of wholesale beginning in July, the potential loss of profit by liquidating unwanted cigars could be devastating.
“The tax increase makes it harder to survive,” Lanford explains. “We faced this before with Prop 10, which raised the tax above 60 percent, but the business was stronger then—people still bought big-ticket accessories and pipes, and we could sell easily through cigar purchasing mistakes. Now I have to be more careful about the products I carry because I might be stuck with them if I make a bad decision. With close to 70 percent tax, what are you going to do? Inventory is going to be thin. Basically, we’re working for the government, and I didn’t sign on to be a tax collector.”
Factor in the size of Santa Barbara Cigar & Tobacco’s humidor with California’s excessive taxation policies and it’s no wonder that Lanford now takes his time when considering bringing a new line into his store.
“When you have a monstrous humidor, you have to fill it or it looks bad, and you’re buying things that nobody wants,” Lanford says. “Having a smaller humidor allows me to be much more selective.
“I attend the IPCPR show to see what the latest new products are. First, I have to like a cigar, and I’m not the only one who tastes it. My employee Derek Won tastes it as well, and I trust him. I trust the rep too. You can tell when a rep is struggling or when he has something special. I also consider if the company is supporting the line with advertising. If people aren’t asking for it, then it’s tough to sell. I have smoked a lot of boutique cigars that were wonderful but I knew they wouldn’t take off because they had no advertising behind their products.”
Being selective on what products to carry is just a small part of Lanford’s strategy to survive more difficult economic conditions. Another threat to all California retailers is internet and mail-order companies selling products at prices that don’t charge the higher state tobacco tax. Lanford and other California retailers can’t compete on price, so they must offer other services to remain competitive, which is perhaps Lanford’s strongest asset. Spend any time at Santa Barbara
Cigar & Tobacco and you’ll quickly see that Lanford loves his customers, and they feel the same way about him and his staff.
“The best part of being in the cigar business is the camaraderie,” Lanford explains. “Enjoying fine tobacco is one thing, but having the camaraderie and friendships with both the customers and suppliers puts it over the top. I’ve always wanted people to feel welcome in the store and make it part of a community. Some customers have become my best friends. There’s no other industry that’s like this.”
One customer, who calls himself Malibu Greg, spends most of his days visiting the smoking lounges of Southern California. Of all the places he routinely visits, Santa Barbara Cigar & Tobacco is one of his favorites because of its authenticity.
“Whenever you come here, it’s a very comfortable atmosphere,” he says. “The lounge is almost like being in your own living room. There’s a homey sense of comfort. It’s intimate and small, and the guys are really welcoming. They carry the products that I care about—there’s no vape or cigarettes. What separates a good cigar lounge from the others is that the owner and his employees have a concierge-type attitude of taking care of their customers. There’s a big difference between the owner who treats it just as a business to make money and the owner who loves it and it is his passion. That passion just oozes into everything inside the store.”
Another frequent visitor to tobacco shops agrees. Michael Dougherty visits hundreds of tobacco shops every year as western territory director for Fuente & Newman Premium Cigars Limited. A cigar salesman for approximately 20 years, Dougherty has seen tobacconists come and go, and he knows a little bit about what it takes to make it in this industry.
“Matt is the secret to Matt’s success,” Dougherty says. “What we sell is so personal, and Matt knows his customers intimately. He knows what they like and what to recommend to them. That’s true of any of the stores that have made it over the years—the personality and passion of the people who run the stores are the secret to their success. Matt and his staff offer a level of personal service that’s just uncommon these days. The other key is that it has a really welcoming and low-key atmosphere so that a working-class person feels comfortable coming in here and sitting next to a celebrity. This is a store that guys can just come in and love cigars and tobacco. It starts with the staff. You’re relaxed and feel welcome, and then you feel more ready to try new things and discover the best cigar that you never knew existed. There’s a trust level that builds between the retailer and the customer. That’s the personal touch that makes this business and industry so unique. Matt naturally has it.”
A partner in a gun shop in town, Lanford envisions a day when he might be able to combine both businesses under one roof. Until then, he is grateful to spend most of his time at Santa Barbara Cigar & Tobacco enjoying the camaraderie and friendships that so enrich the lives of premium tobacconists everywhere. Despite the economic and political difficulties, Lanford is hopeful that his store will be around for many years to come.
“It’s been 20 years of good, for the most part,” Lanford concludes. “Santa Barbara is steady. I still have days that I’m pleasantly surprised by sales. Otherwise it’s predictable and good. There is a healthy competition between the shops in Santa Barbara, but the real competition is from mail-order and internet companies and the government. Unless California does something to start policing the internet companies, it will be very hard. I would be pleased to just have business as usual. If things stay the same as they are now, that’s as much as I can ask for, and then I think the future will be bright.”