An Open Letter to Sales People

February 24th, 2020

Dear Professional Sales Person,

The best business advice I ever received came from my father.  I was in high school and we were having a conversation about careers.  He said, “All of life is sales.  You’re always selling yourself.”  While I am not a sales person by the classic definition, I think I have spent my career heeding his advice.  With that in mind, I’d like to offer some advice, especially to those of you whose vocation is in sales.

1.  Technology has made “connecting” easier.  Accepting your LinkedIn connection does not mean I am your gateway into my company.  Asking me to connect you to the “decision maker” in my company is the lamest request you can make.  

2.  If your company chooses to buy a trade show attendee list or some other contact list, verify your mail merge program works.  Sending an email addressed with the wrong name doesn’t inspire confidence in you or your organization.

3.  Sending me a silly link to your calendar so I can schedule an appointment to talk with you at your convenience is insulting.  I’m the potential customer; my convenience is what matters.  Whatever you paid for that stupid program is too much.

4.  With all the information available on line, it is pretty easy to discover basic facts about someone you are cold calling or emailing.  If you can’t spend 30 seconds to find out where a prospect is located before you call, don’t call.  

5.   Promising dramatic cost savings or tremendous revenue growth makes me think either you don’t understand my business or you think I am an idiot.  Do yourself a favor and do a little research before sending an obnoxious email saying you can save me 25% on (insert product or service here).  Use your sales training.  Find pain points.  Provide information.  Every business wants lower costs and higher revenue.  There’s nothing unique about offering those.

I generally pick up my phone, return phone calls, and respond to emails because I want to learn.  Before you sell me, teach me.  That’s how you’ll have success. 

Regulations Continue to Hurt Small Businesses

February 17th, 2020

One of the lasting impacts of the Great Recession is the number of business startups has decreased.  (https://apnews.com/e7179fc8b9dc4399818f2038b75ec423)  Many explanations are bantered around as to why business formations have not rebounded, including demographics, availability of capital, and the impact of technology advancements.  While all those reasons are certainly contributing factors, I submit the ever increasing regulatory and compliance burdens placed upon businesses are the real reasons there are less startups.  I will focus on financial compliance and not even get into employment or environmental compliance burdens. 

Two aspects of financial compliance really stick out to me as burdensome.  A few years ago, the Supreme Court ruled in the infamous Wayfair decision (https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc.) that states can collect sales tax from sellers even if the sellers do not have a physical presence in that particular state.  The prior standard was a business had to have a nexus in a state in order to be subject to sales tax.  That opened up the floodgates.  States, desperate for money, are looking for sales tax revenue everywhere they can.  A vast majority of our customers are not subject to sales tax.  Yet a certain state that is in the news for teetering on insolvency is sending someone to our headquarters to do a sales tax audit.  We have to prepare information for the auditor.   I have to have someone help this auditor for a few days.  All of this busy work costs real money.

Secondly, the Financial Accounting Standards Board (FASB), the brain trust behind Generally Accepted Accounting Principles (GAAP), has changed revenue recognition rules.  If you are a masochist, spend some time reading those thrilling rules.  We have spent significant time and money proving we comply with the new standards that fundamentally change nothing about how our business operates.  The latest request to comply put me over the edge.  We have to produce a letter from our law firm that explains how we will recognize revenue if a customer cancels an order.  Law firms don’t write letters for free.  But a FASB clown thought that would be a good idea to have a legal document on file in case someone ever asks.  (If you want me to go on a tirade, buy me a drink and ask me to expound on why GAAP is a joke.) 

Fortunately, our business has grown enough that we have people internally and externally do this stuff.  I’d go crazy doing this stuff because very little of this work is value add.

People start businesses to solve problems, not do paperwork.  The increasing paperwork burden on businesses creates barriers to entry for startups.  If we want to encourage entrepreneurship, reduce the regulatory burdens.

Are Companies Concerned about the Environment or just the Bottom Line?

February 10th, 2020

I recently picked up food for my son and me from a fast casual restaurant.  As I was walking out the door with the bag, which was not over packed or very heavy, the bag broke.  My food went everywhere.  The manager came out, apologized, and said they’d remake the food.  She then said, “Ever since we switched to these new bags, we’ve had a lot of issues.”  Perhaps this gives you too much insight into the life I lead but a complaint about packaging excited me.  I had to engage her in a conversation.

Me:  “Why did they switch bags?”

Manager:  “They told us they’re more environmentally friendly but I think they just wanted to save money.  They’re thinner.”

Me: “So they down gauged the material.”  (One of the few technical terms used in packaging that I actually understand.)

Manager: “What does that mean?  Did they make them thinner?”

Me: “Exactly.”

Manager: “Well, it sucks.  My bonus is partially based on food waste.  I can tell you it’s gone up because these stupid bags break.”

They remade my order, double bagged it, and I was off.  As I drove away, I thought about the purchasing manager whose bonus is based on saving money on packaging.  I thought about the sustainability manager whose bonus is based on creating a report that says the company used less packaging.  I also thought about the poor manager that has to remake orders, hear about food waste increases in her performance review, and deal with irate customers because bags break. 

Like most people in my industry, I care about the environment.  We need sustainable raw materials to have an industry.  We have a responsibility to protect the environment.  I also recognize companies do not want to pay more for what they perceive as a non-value add item (packaging).  If I had a nickel for every time I hear a customer say, “We want something environmentally friendly but it has to cost the same or even less,” I would be able to get my wife a private plane so she could fly around like Bernie Sanders, Elizabeth Warren, and Al Gore and tell people how important the environment is.  The reality is sustainability requires an investment.  Thinner does not always mean less expensive. 

Big Company Madness

February 3rd, 2020

I recently spoke at career day at my son’s school.  The day before my presentation, I pulled a few “stickers” out of our sample room to show the kids what our business does.  I’ve talked to students before and figured I could just wing it.

The school had all of the parents assemble in the lunch room.  I saw several parents I knew, including a mother of one of our son’s friends.  She works for a large public company.  She is the most prepared person I know.  She had a set up like a tradeshow booth.  She had a display of her multiple diplomas (required for her profession).  She had a poster board of articles about her profession.  She had tools of her trade.  Needless to say, I felt unprepared. 

I noticed she had a table cloth on the lunchroom table.  It appeared to be upside down.  She told me the ordeal she went through just to get the tablecloth.  She called the marketing department who told her to call the community relations department.  The community relations department sent her a table cloth with a logo on it with explicit instructions: the logo could only be displayed if marketing approved that it could be displayed.  She called the marketing department and was told she had to fill out an online form to get approval.  She filled out the form and awaited approval.  She did not receive an approval prior to career day so she positioned the table cloth with the logo not visible.    

I understand that a corporation has to be protective of its brand.  I know that can often involve coordination among different departments.  But at some point, shouldn’t common sense prevail?  A senior employee is presenting at her son’s school’s career day!  Shouldn’t the company trust her to make a good decision regarding its brand?  Companies talk a lot about empowering their employees.  This example shows a lot of them talk the talk but don’t walk the walk.    

Direct Thermal Paper Prices are Going Up. Will Labels Follow?

January 27th, 2020

Last week, Koehler Paper and Hansol Paper, two leading suppliers of direct thermal paper announced price increases of 8 – 12%.  Interestingly, the increases are effective virtually immediately.  February 1st is the date in their letters. Both companies blamed rising pulp prices and rising logistics costs for the increase announcements.  An industry friend, who alerted me to the increases, told me another major direct thermal player started calling big customers last week about its increase announcement. 

Recall in 2018, the world experienced shortages in leuco dye, a major component of direct thermal coatings.  In 2019, capacity came on line and direct thermal prices stabilized and even trended lower, particularly for the receipt paper market.  Maybe I have watched a few too many conspiracy theory shows but it sure seems a little strange for direct thermal paper suppliers to announce price increases in the same week after a stable year of pricing. 

As I’ve written in the past, there has been major consolidation in the paper industry.  If you go back to economics 101, less supply equals higher prices, all other things equal.  If the direct thermal suppliers are successful in raising prices, expect other paper companies to follow suit.  If that is the case, label stock suppliers will most likely announce increases.  Buckle up – it could be a wild 2020!

Corporate America Better Shape Itself Up or Someone Else Will

January 20th, 2020

Unlike some of the “Democratic Socialists” (whatever that means) currently in office or running for office in the US, I consider myself a true capitalist.  I believe you should be rewarded if you take a risk and invest time, intellect, or capital and it works.  Likewise, I believe you should suffer the consequences if your efforts do not work; “bailouts” from the government should not exist.  To work properly, capitalism produces winners and losers.  Creative destruction is what powers improvements in quality of life. 

Stories like Boeing’s help me understand why socialists are gaining traction in the US.  In case you missed it, Boeing’s latest version of its 737 has been pulled off the market because of safety concerns.  Two crashes killed hundreds of people.  For months, Boeing and US regulators insisted the plane was safe.  After significant pressure from the international community, airlines stopped flying the plane and Boeing suspended its production.  Boeing’s board, populated by a who’s who of American business and politics, recently fired the CEO.  For his efforts, he walked away with $62 MILLION.  By comparison, Boeing settled some lawsuits with the families of victims of the first crash.  It is estimated the families received $1.2 million per victim.  I’ve written before that I believe “fair” is the worst word in the English language.  Everyone’s definition of fair is arbitrary and based on his circumstances. I’ll refrain from saying, “This isn’t fair,” but it sure makes a good stump speech on a campaign trail.

I’ll go to one of my other blogs: optics matter.  Somewhere along the way, corporate America has forgotten that the way things look matters.  Producing high-end brands in sweatshops where people die doesn’t look good.  Paying CEOs 271 times an average worker doesn’t look good.  And, yes, paying a fired CEO $62 million doesn’t look good. 

If the corporate world doesn’t police itself, the public will through elections.  The government has not shown the ability to solve problems in highly regulated industries (healthcare, education, and housing).  The government getting involved in more of the economy won’t be good for anyone. 

Further reading:

https://www.boeing.com/company/general-info/corporate-governance.page

https://www.businessinsider.com/boeings-ousted-ceo-muilenburg-not-entitled-to-severance-payment-2020-1

( https://www.cnbc.com/2019/09/25/boeing-settles-lion-air-lawsuits-for-at-least-1point2-million-apiece.html)

(https://www.cnbc.com/2018/01/22/heres-how-much-ceo-pay-has-increased-compared-to-yours-over-the-years.html)

Where Is Your Focus?

January 13th, 2020

I had an interesting conversation with a friend who is a professional salesman.  He has worked for startups and large multi-national corporations.  He recently joined a medium-sized public company.  I asked him how things were going.  He said, “I’ve never worked for a company that is so internally focused.  It feels like we have meetings about the meetings we’re going to have with ourselves.”  As our conversation wrapped up, he said, “I know I’m biased because I’m a sales person but the most successful companies I’ve ever worked for have an external focus.” 

After we hung up, I thought about his statement.  It’s the beginning of the year.  Everyone is busy with goals and thinking about what they’re going to do to improve this year.  Usually, those conversations are internally focused.  Executives set lofty goals.  Managers meet with employees and set performance objectives.  Rarely do people outside the organization have a voice in these conversations.  Maybe it’s time to change that. 

Amazon is famous for having an empty seat at meetings to represent a customer.  Maybe they’re on to something. 

It’s 2020? Where did the 2010s go?

January 6th, 2020

Is it just me or does it seem like 2010 was yesterday?  The decade flew by.  Time for a review of my 2019 predictions and a look into 2020.

As my 2019 trends/predictions demonstrate (humbly provided below), there’s a reason I’m selling labels and not a psychic.  You can read below but had you done the opposite of what I suggested in 2019, you’d be sitting pretty.  I still believe in trends towards increasing volatility in financial markets and supply chains.  I also think there will be an environmental backlash against direct to consumer shipping at some point, but I have no idea when that will occur. 

Without further ado, here is what I see for 2020.

  1. The trend away from growth at any cost that has started in the technology sector spreads to the entire economy.  Profits do indeed matter.  Public companies will miss revenue forecasts and say they are focused on profitability instead of growth.  That mindset will permeate the entire economy.  Expect to see signs of inflation as a result, especially in consumer services that have been heavily subsidized over the last few years (ride sharing, package delivery, food delivery). 
  2. The US economy continues to chug along.  Low growth continues.  Financial markets have tantrums over international affairs and concerns over the US election, but economic growth in the 2% range remains.   
  3. In the good ol’ label/packaging industry, expect more of the same trends we have seen for the last few years.  Consolidation will continue.  Convergence of print technologies and functions will continue.  The aging of our workforce will force companies to get more creative in how they attract young people to what is incorrectly perceived as a dying industry. 

I hope you enjoy a healthy and prosperous 2020. 

2019 trends/predictions

  1. To state the obvious, after a relatively calm period, volatility returned to the financial markets in the last several weeks. It will continue and impact the economy.  Banks will begin to tighten credit standards.  Economic growth will surprise on the downside at some point during the year.  Overall, the US economy will grow but the growth rate will slow.  (This is a prediction I would love to be wrong about.)
  2. Expect volatility in your supply chain as shortages in raw material components (real or perceived) are possible. Top concerns are thermal transfer ribbons, release liners, and certain adhesive components.  As I’ve written in the past, price does not matter when you cannot get something.  Be prepared for longer lead times.
  3. The death of bricks and mortar retail continues to be greatly exaggerated. For environmental and cost reasons, direct to consumer shipping slows.  Merchants will encourage (translation: monetarily reward) consumers to pick up items ordered online at centralized locations.

The New Year is a great opportunity to reflect on what went right, what went wrong, and what you can do to change your future.  I hope you create the 2019 of your dreams.

Here’s to you, Dad!

December 30th, 2019

10 years ago today (December 31), I lost my father.  Like the great accountant he was, he moved on at the end of the year (literally and figuratively).  Those of us who knew him and loved him have moved on, better for having had him in our lives. 

My Dad grew up in a poor family.  He was the youngest of seven by many years, probably an “accident.” My grandfather died when my Dad was around 9 or 10, leaving my grandmother and his older siblings to raise him.  Fortunately, they pointed him in the right direction, which led him to meeting and marrying my Mom.  If it weren’t for that confluence of circumstances, you would not be reading this feeble blog!

My Dad ended up being the first person in his family to graduate from college.  He had a very successful career as an accountant.  Most importantly, he and my Mom raised four contributing members of society, even after going through the incredible pain of losing a child.  (OK, the contributing aspect is one the four of us can debate about each other, but that’s the subject for another blog or even a book.) He was never easy on us (except the youngest, our little sister!) but we knew he loved us.  He expected us to do our best at everything we did.    

Those of you that know me know I generally am a non-discriminate consumer of various alcoholic beverages. However, I’ve never been a big whiskey/bourbon/brown liquor person.  Earlier this year, my family vacationed in California and I spent an evening with my Dad’s best friend, Gary.    He proposed a toast to my Dad.  He ordered us my Dad’s favorite drink from their early careers, a Manhattan, which is whiskey (brown liquor), vermouth with a little bitters and a cherry added.    I drank it proudly.  Gary told me some stories about my Dad I wish I knew when he were alive.  Again, a subject for another blog. 

A few weeks ago, I was in New York with a close friend.  Without any prompting, he ordered us Manhattans while we waited for our dinner table.  I smiled and told him the story about the Manhattan being my Dad’s favorite drink.  We had a “moment,” as much as two guys can have, wondering why he ordered us Manhattans.  I again toasted my Dad and drank the Manhattan proudly. 

Here’s to you, Dad. I know you are still with me. 

May your New Year bring back fond memories and the opportunity to create new memories.   Happy New Year!

An Early Christmas Present?

December 23rd, 2019

Calling the economy confusing is an understatement. Across the globe, manufacturing has struggled this year.  Our president screams for lower interest rates despite US unemployment being at record lows.  I feel like Harry Truman, who famously said, “Give me a one-handed economist.  All my economists say ‘on one hand’ then ‘but on the other hand…’”

As I say often to our team, “Numbers don’t lie.”  We have to live in reality.  Maybe reality is getting a little better, at least in the manufacturing world.  As the attached commentary and graph from the investment advisory firm, PIMCO, show, maybe manufacturing has turned the corner and is on a path to growth.  Even Europe is showing signs of life.  Anecdotally, I see signs of growth.  Activity has certainly picked up. 

Happy Hanukah, Merry Christmas, Happy Festivus.  I hope you enjoy the holiday season with family and friends.  Here’s to hoping these numbers aren’t lying and we are on the cusp of improved economic growth. 

From PIMCO:

U-turn
An uptick in manufacturing PMIs during November for several key global markets lent credence to the idea of a potential bottoming in global growth, even as other economic data were mixed. Several factors likely supported the marginal boost – including easier financial conditions (spurred by more accommodative policies around the globe) and nascent signs of both a U.S.?China trade deal and Brexit resolution. The apparent turn in data was particularly notable in the eurozone (Germany and France), highlighting that the improving business sentiment was more marked in regions generally susceptible to trade tensions and external growth conditions.