Street Smarts

by Norm Brodsky

  It was actual y my wife, Elaine, who got the bal rol ing. We’d been hearing some complaints from customers about the response they’d received when they phoned in, and Elaine—who, among other things, was our head of human resources—was determined to do something about the problem. She found a company that specialized in training phone representatives and arranged to have a trainer fly in for three days of workshops with our staff. The company claimed that everyone could benefit from the training, and so Elaine decided to include al sixty of our ful -time salaried employees, about half of our on-site workforce.

  The investment wasn’t peanuts—$10,000 for the trainer, plus the paid time of al those people—and I was skeptical that we’d get much out of it.

  It’s extremely difficult, I’ve learned, to foster long-term changes in behavior. I figured the effects would last about three weeks. Stil , I don’t like to discourage people from trying new things, and Elaine was adamant, so I went along.

  I have to admit I was curious to see the employees’ reaction to the training program since we’d never done anything like it before. Most of our people come from inner-city neighborhoods, where they’ve had limited educational opportunities. Nevertheless, they took to the workshops like ducks to water. They clearly loved having a chance to learn new work skil s. As the trainer took them through lessons on subjects like telephone-answering techniques, they listened attentively and soaked it al up.

  Afterward, Elaine looked for ways to keep the momentum going. She made up forms for people to fil out reporting what they’d learned, what they’re enjoyed most, and what additional help they needed. In addition, she bought a set of sixteen short videotapes from the training company with the idea of using them to stimulate further discussion. The question was, how? Although she’d once been a teacher, Elaine had no experience in workforce training. As a result, she pretty much had to make it up as she went along. Her plan was to hold five hour-long sessions every two weeks, with twelve people in each session. There she would show a videotape and ask participants to talk about the issues it addressed. She also made what turned out to be a critical stipulation: each session had to have people from every department, and the composition of the groups would keep changing. The idea was simply to let participants interact with other employees they would never meet in the normal course of business.

  Elaine thought something interesting might come out of it.

  I didn’t attend the sessions myself, but Elaine and I talked in the evening about how things had gone. She couldn’t get over the enthusiasm people brought to the program or the camaraderie it engendered. The participants loved to be cal ed on, she said, and they loved to tel stories—about their own experiences as customers, about ways they could apply the techniques they were learning outside the business, about things that had happened in the company. At one meeting, for example, a customer service rep named Denise had singled out a warehouse worker, Chris, for praise. The week before, she said, he’d gone out of his way to make sure the right boxes were delivered to the right customer on time. The customer was relieved to get them and praised the company’s performance. Denise wanted to pass along the compliment, which neither Chris nor the rest of the group would have heard about otherwise.

  Making those connections between members of different departments turned out to be a major benefit of the program. Despite our best efforts to build team spirit, people didn’t real y get it until they sat in a room talking to employees from other parts of the company. Suddenly they had names and faces to relate to. They had a sense of the problems other people had to deal with, and they saw how work flowed through the business. It became crystal clear how the drivers depended on the customer service reps, and how the reps depended on the warehouse guys. In the process, people began to think in terms of the company as a whole, rather than focusing on their own little pieces of it.

  Elaine, for her part, used the sessions to reinforce the customer service message. “I’m not paying your salary,” she would say. “The customers are. They just funnel it through me.” She reminded people about the bonuses they earned when we hit a new level in our box count and our policy of doing a 110 percent match of contributions employees made to their 401(k)s. “It’s the customers who make al that possible,” she said. “When you see Norman or someone else giving people a tour, those are usual y prospective customers. We want to make them feel welcome. That means smiling and saying hel o.”

  It didn’t take long for us to see the results. The number of complaints dropped almost at once. People who cal ed me began asking if we’d hired new operators. Meanwhile, we started getting more and more compliments on our service. Elaine had been giving $25 to anyone who received a compliment, but we were getting so many that we couldn’t afford to keep paying out cash, so we switched to gift certificates and tickets to bal games. It didn’t matter. The compliments kept rol ing in. In the six months fol owing the start of the program, we received more comments, cal s, and letters of praise than we’d had in the previous fourteen years.

  I was amazed. I told Elaine I couldn’t believe the change in our people. Not only were they nicer to our customers, but they were nicer to one another. She mentioned that they’d discussed the concept of internal, as opposed to external, customers and the importance of serving both.

  Evidently, the discussion had made an impression. I could see the difference in our ability to handle special requests. Say a customer needed to get a large number of files in a short period of time. In the past, I or one of the other executives would have gotten involved, invariably disrupting the normal system and screwing things up. With the new level of teamwork in the company, our employees were able to coordinate among themselves, ensuring that such requests were handled smoothly, without creating unnecessary problems.

  But the most compel ing evidence of change came from prospects who were deciding whether or not to give us their business. For years, we had made a point of talking to customers about our work environment. As part of our tour, we would take visitors to the area of the warehouse where we’ve put up charts and graphs showing how we’re doing in our box game, which rewards employees for increases in the total number of boxes we store. The visitors would often ask, “Gee, can I get an application to work here?” One new customer even sent us a letter saying he was giving us his 5,000 boxes in hopes that they would get us to the next level and our employees could receive their bonus checks. So I was aware that employees played a role in some customers’ decisions to sign with us, but I didn’t realize how big a role it could be until we began to see the effects of Elaine’s training program.

  The revelation came one afternoon when Louis, the company president, returned to our executive offices with a prospective customer he had just shown around our facility. We had arranged to meet at the end of the tour. As we were sitting in my office, I asked the guy if he was considering other vendors. “Yes, two,” he said and gave me their names. They were our major competitors.

  My standard response is to praise the other companies, say that the customer would be happy with either one, and suggest how he or she might be happier with us. But for some reason I fol owed another script this time. “Did you see any differences between their places and mine?” I asked.

  “Yes, I did,” he said. “Every one of your employees was smiling, and they al said hel o. I’ve never seen anything quite like it. They must real y be happy.”

  “I hope so,” I said. “Thank you for noticing.”

  “Because of that, in fact, I’ve decided to give you the business,” he said.

  I was completely taken aback. We almost never close an account on the spot. “That’s great,” I said. “I think you’ve made the right choice.”

  Afterward, I reflected on what had happened and realized that, for a long time, I’ve been making a mistake. I’ve assumed that owners and CEOs make the buying decisions on records storage. In fact, the key players are usual y employees themselves. Even if they don’t actual y have the f
inal say, they provide al the information on which the decision is based. As employees, they tend to identify with other employees, which is one reason they respond so warmly to our culture.

  That’s also why it may sometimes be possible for our line employees to close a sale. Thereafter, I gave them as many chances to do that as I could arrange.

  The Bottom Line

  Point One: Salespeople are your representatives in the marketplace. Make sure you choose salespeople who wil represent you wel .

  Point Two: Beware of hotshots and would-be entrepreneurs, and don’t hire salespeople from within your industry.

  Point Three: Sales commissions cause divisions in a company and get in the way of building a team. Don’t pay on commission unless you have to, and switch to salary plus bonus as soon as you can.

  Point Four: Al your employees have an impact on sales, at least indirectly. With the right training, you can teach them how to have a direct impact.

  CHAPTER FIFTEEN

  Help! I Need Somebody

  We’ve covered a range of activities, practices, and disciplines involved in starting and growing a business, but there’s one chal enge you face regardless of the stage of the business process you happen to be in: getting good advice. Each of us has moments when we desperately need someone to talk to, someone to listen to us, someone to offer, if not advice, then a different perspective, unclouded by al the factors that keep us from seeing clearly what we have to do. Usual y that person is not in the company.

  Even if you’re not desperate, it stil helps to get an outside perspective, especial y when you have a problem that’s driving you crazy. After al , the problem you think you have may not be your real problem, and so the solution you come up with may not be the right solution. That happens partly because you get so close to the problem that you lose perspective on it. You see something wrong in one area and fail to connect it to what’s happening in other areas, and so you miss a solution lying elsewhere. Beyond that, I think we al have a tendency to look for the type of solution we feel most comfortable with, given our personality and our skil s. Thus, engineers tend to look for technical solutions. Accountants tend to look for financial solutions. And salespeople wil go for the sales solution—even when the problem has nothing to do with sales.

  A case in point is Mike Baicher, whom I wrote about in chapter 11. When I first met him, his family-owned trucking business was doing about $1.7 mil ion a year in sales. Ten years later, it was a trucking and warehouse business with annual sales of $11 mil ion. His drivers, some of whom are independent contractors, pick up giant shipping containers from the New Jersey ports and deliver them to warehouses in the area, where they are unpacked. Several of the warehouses belong to Mike himself, whose company provides storage services to some of its customers. Other customers have storage facilities of their own. The latter were on his mind when he came to see me.

  He said he was thinking about hiring a salesperson. When I asked why, he said it had to do with the hassles of dealing with customers who used him only for pickup and delivery, not warehousing. For one thing, they often didn’t unpack the containers in time to avoid the late fees charged by the shipping companies—which owned the containers—when an empty one was returned to the port in more than five days. Those fees ranged from $65 to $125 a day, depending on the shipper. The problem didn’t arise when the container came to one of Mike’s warehouses, because his people would unload it right away. But customers with their own warehouses waited until the last minute of the fifth day. By the time Mike’s drivers brought the empty container back to the port, the shipping company’s office would be closed, and Mike would get charged for an extra day.

  “Can’t you pass that along to the customer?” I asked.

  “I try to, but it’s tough,” he said. “They say, ‘What are you talking about? We emptied it in five days like we’re supposed to. If you didn’t get it back in time, that’s not our problem: There isn’t much I can do. This is a competitive business. If I insisted they cover the late fee, we’d lose the account.”

  “What about cal ing them in advance and reminding them to unload the container before it becomes a problem? ”

  “Yeah, I suppose,” he said, “but there’s another issue with that part of the business. I can’t bil the customer until I receive the paperwork from the driver, and the drivers don’t turn it in on time. I’m constantly chasing after them to get it. I have some leverage with the independents, because they won’t get paid if I don’t have their paperwork, but with my own drivers I just have to keep nagging. I hate it.”

  I knew what he was talking about. I’ve had that problem with my drivers as wel . “So what does this have to do with hiring a salesperson?” I asked.

  “I want to sel more of our warehousing,” Mike said. “Not just the storage, but also the value-added services, like pick-and-pack.” He explained that some customers would pay him to deal with the contents of the containers. Suppose that a clothing chain was receiving a shipment of shirts and dresses from China. The customer might hire Mike’s company to upgrade the hangers, add price tags, put the clothes in poly-bags, and then ship different types and sizes to different stores. That’s what he meant by value-added service. He figured that if he could build up that side of the business, he could phase out the part that was giving him al the headaches.

  Now, it helps to know some of the background here. When Mike’s father ran the company, it was strictly a trucking business. He and Mike had a smal warehouse out of necessity. There was always a wait when they picked up a container at the port, and—if they didn’t retrieve it before the customer closed up shop for the day—they needed a place to keep it overnight. In addition, some customers demanded that the company provide storage, or they would take their business somewhere else.

  When Mike took over the company, he changed course, expanding the warehouse business because he wanted to, not because he had to. He saw it as a profitable adjunct to the trucking business. He told customers he could handle their warehouse needs more efficiently than other vendors and, in some cases, even more efficiently than the customers themselves. Over time, the warehouse business had grown. When he came to see me, he had four buildings and hoped to add another before long.

  That was a different service, however, from the one he was talking about making his primary focus. Under his new plan, he would be putting his whole emphasis on the value-added services, as opposed to the storage. Accordingly, he’d be looking for a different type of customer. “How have you been getting your warehouse customers up to now?” I asked.

  “I get them from picking up their containers at the port,” he said. “Maybe they don’t have room in their warehouse temporarily. Or maybe they don’t want to have their own warehouse. I become their warehousing department.”

  “Wel , if that’s been your source of new business, you don’t want to stop doing it, do you? I mean, why give up on a proven method of getting customers and making sales? Are you the biggest guy doing this?”

  “Oh, no,” he said, “I’m one of the smal est around.”

  “So why would you stop when you stil have a lot of potential customers you’ve never even spoken to?” He didn’t have an answer. “Tel me,” I said,

  “who does the sel ing now?”

  “I do,” Mike said, “but I hardly have time for it because of al these other problems I’m dealing with.”

  “What do you like to do best?” I asked.

  “I like to sel !” he answered without hesitating. “I love to sel . I wish I could do more of it.”

  So here was a guy who loved to sel , but instead he was going to hire someone else to do it. And understand, in most businesses there’s a significant lag time between the hiring of a salesperson and the production of sales, especial y when you’re sel ing a service. On top of that, Mike would be using a sales approach he’d never tried before. Sel ing value-added services is different from sel ing warehouse space to customers whose containers you’re
hauling. It’s almost like going into a new business, which is fine under the right circumstances. I would have reacted differently if Mike had said, “I want to open up a new line of business because the old one is getting tougher to sel . I have a nice share of the market, and I’l keep sel ing as much as I can, but I think it’s time to try something new.” I would also have reacted differently if he’d told me that his customers were asking for this new service, that it had good gross margins, and that he could provide it without investing too much time and money. What didn’t make sense was to go into a new line of business because of hassles in an old line of business that he’d had success with and that stil offered plenty of opportunities to grow.

  I said, “Listen, Mike, I think there’s another approach you’re not considering. I’m a salesman like you, and I hate dealing with those kinds of problems as wel . So I surround myself with detail-oriented people. They’re people who enjoy taking care of things like reminding customers to empty their containers and getting drivers to turn in their paperwork. They’re good at it. They also start out with a lower salary base than salespeople, and they can get up to speed in a matter of days, not the three or four months that a salesperson needs.”