Bad Marketing is Worse than No Marketing

October 30th, 2018

Like everyone else, I am inundated with marketing emails and marketing mail.  The explosion of databases for sale and the close to zero marginal cost of sending one more email have led to inbox overload.  I enjoy the solicitations that include an email below claiming they emailed me before and implying I was too rude to respond to that email. The sender writes a message as if he is doing me a favor and trying to contact me again.  Does lying to a potential customer really work?   I must have missed that in my marketing classes.  I also enjoy the emails that start off, “I know you’re a leader in your organization.  Could you point me in the right direction to…”  I feel like I understand those emails better than the example above because I learned about flattery in marketing classes and in the sales training I have taken.

Last week, I received an email that was either a mail merge gone wrong or a bad cut and paste effort by a marketing person.  My name was wrong in the salutation but it was correct in the body of the email. I guess “Brian” and “Ben” are similar names.  My company name was right too but, to the best of my knowledge, we don’t make t-shirts as the email said we did.  The sad part is this email came from a company we have actually talked with about using their products and services.  That conversation has now ended.

I’ve written in the past: email is a useful marketing tool if used properly.  But you can’t screw it up.  Bad marketing is worse than no marketing.  If you can’t get your marketing message right, don’t send it.

Training is the Answer

October 23rd, 2018

Virtually every manager and business owner complains about the challenges of finding good people.  Statistically, the unemployment rate is at a fifty year low.  Recognizing how challenging it is to find staff, we have ramped up our efforts to train the people that are already on our payroll.

We recently sent two of our press operators to a training program put on by All Printing Resources.  (An unpaid endorsement: Great job!  I highly recommend their programs.  Hats off to my friend David Nieman and his team.)  I had one requirement for our attendees: they had to present to me about what they learned when they came back.

Now, I think I’m a pretty easy going guy but I can understand how presenting to the “boss” can be intimidating.  Last week, we had the big presentation.  I’m proud to say Waylon and Alex nailed it.  They talked about their training with pride and excitement.  They had some ideas on things we could do differently.  They expressed an interest in learning more.  I could not have asked for a better outcome.

We all want productivity improvements.  Recent studies have shown the drop in US labor productivity gains is correlated (Remember, correlation does not equal causality from previous blogs!) with a reduction in US education results as measured by standardized tests.  (I could go off on that one too but you get the point.)  If you want your productivity to improve, invest in training!


Don’t Stocks Just Go Straight Up?

October 16th, 2018

Last week, US equity markets went down, with the S&P 500 down almost 4%.  Since October 2, the S&P has dropped 6%.  Stop the presses!  After what seemingly appeared to be a straight climb higher and higher, a little volatility appeared for the first time since February.  It’s a good time to reflect on a few universal truths:

  1. Stocks are risk assets. They don’t go straight up.
  2. Stocks represent ownership in a business. Over time, businesses that create value should see their value and, hence, their stock prices go up.  However, valuation is based on a number of things, including interest rates.  Interest rates are going up from abnormally low levels.  The stock market is finally starting to recognize interest rates are going up. Anyone who tells you how high rates are going to be is guessing.  Someone will guess right and earn the coveted “genius” label by the financial press.  But, remember, that person is guessing.
  3. The economy has cycles. See above – anyone who tells you he knows when the cycle will change is guessing.  There are signs that the economy is slowing down.  There are also pockets of the economy that are accelerating.
  4. Above all, remember that volatility and change, as scary as they are, create opportunity.

If you are investing for the long term (10 years or more is my definition) and you panic, my advice is to not look at account statements for a while.  Keep investing.  Over time, stock valuations reflect economic growth.  The US and world economies are going to grow over time.  Don’t do anything rash.

Consider the Alternatives

October 9th, 2018

A former boss of mine was fond of saying, “Controversy creates better decisions.”  She was fond of having someone play the “devil’s advocate” role in meetings.  That person was empowered to challenge whomever was championing something.  The key rule for the devil’s advocate was the challenge had to be based on facts or possible outcomes from the decision, not emotions or personal biases.

As my career has progressed, I have come to understand, more and more, how leaders begin to believe in their own infallibility.  I have written about confirmation bias before.  We look for information that supports our decisions.  We do not like to be wrong.  We certainly do not like to be questioned, let alone proven wrong, by someone below us in the hierarchy.

The Kavanaugh saga of the last few weeks illustrates the inability of our media and politicians to consider alternatives.  David Brooks wrote a compelling editorial in the New York Times.

I pulled out my favorite line:

People who don’t have regular contact with people they disagree with become intellectually dishonest quickly.

I would add “civilized” before contact to make this statement even more powerful.

We witnessed a lot of intellectual dishonesty in the last few weeks by both political sides.  Use their mistakes as a lesson.  When you are making decisions, ask someone for an alternative view.  You’ll end up making better decisions.

Increases/Shortages, Existential Risks, and Efficiency: Label Expo Recap

October 2nd, 2018

Since things are abnormally quiet in the political realm and because our industry just wrapped up its largest trade show of the year, I thought it made sense to focus on the trade show this week.

Through various meetings and casual conversations, three main themes emerged:

  1. We’re in the middle of increase #3 in the last 10 months and the stage is being set for increase #4. Raw material pressures have not abated.  Tariffs are not helping.  There are threats of shortages in various chemicals and liner materials.  If you are a direct thermal user, make sure your supplier has a plan B.
  2. Existential risks. Would you like to be a straw manufacturer in the US today?  That analogy was relayed numerous times in comparison to the label industry.  Direct print, linerless labels, and recycling mandates are all threats to our industry.  Pay attention.
  3. One digital press manufacturer told me he has seen up to four of his company’s machines run by one person.  Given the challenges of finding labor, more and more automation will be brought to our industry.  That requires more and more capital.

None of these themes is particularly revolutionary; your humble blogger has written on all of them in the past.  But if you put them together, they make it clear: it’s going to be harder and harder for small companies to compete in the label/packaging world.  Expect the consolidation train to start moving a little faster over the next several months.


Are We Witnessing the Death of Customer Service?

September 24th, 2018

My wife went into an upscale store last week.  She was looking for something specific.  She saw three workers in the store.  One was staring intently at his phone.  The other two were in a conversation and too busy to notice her.  No one acknowledged her.  She looked around the store for a few minutes and walked out frustrated, buying nothing.  I’m quite confident she told a few other people her story.

I received a credit card in the mail last week.  I thought I had closed the account long ago.  I called the financial institution to close the account.  I had to enter the credit card number, my birthdate, the last four digits of my social security number, and a few other details before I could talk to a person.  After my fat fingers incorrectly entered the data a few times and the automated system repeatedly said, “I’m sorry.  I do not understand what you are saying,” in response to my expletives, I had to tell the customer service representative all of the information again.  To add insult to injury, the CSR told me the account was closed in 2015.  She could not explain why I got a new card.  I wish I could have that twenty minutes of my life back.

Every business wants to be as efficient as possible.  In the first case, the company probably did not invest in training for their employees, resulting in a lackadaisical attitude.  In the second case, the company probably has two systems that do not talk with each other, resulting in duplicated work and wasted time.

Customers understand mistakes happen.  They do not understand apathy or systems that frustrate them.     As simple as it sounds, a business cannot exist without customers.  It amazes me how often that is forgotten.

Are You Playing Not to Lose or Are You Playing to Win?

September 18th, 2018

Even the casual sports fan knows the Cleveland Browns have struggled for the last 19 years.  (It pains me to write that.)  After losing every game last year, the Browns teased their incredibly loyal, blindly optimistic fan base by tying their archrival, the Pittsburgh Steelers, last week.  On Sunday, they lost to the New Orleans Saints, 21-18, after leading 12-3 entering the 4th quarter.  The Browns’ kicker missed two field goals and two extra points.  NFL kickers normally do not miss four kicks in a game.

In both games, the Browns had a chance to win.  The coaches had good game plans.  For the most part, the players executed well.  At crucial moments, however, things fell apart.  Missed assignments.  Missed tackles.  Crucial penalties.  And, of course, mixed kicks.  I have asked myself why these mistakes happen.  I submit that the Browns’ culture of losing has become the dominant belief by the team.  They know something will go wrong.  They expect something to go wrong.  To borrow a sports cliché, they play not to lose instead of playing to win.

Are you playing not to lose or are you playing to win?  If you are in sales, do you make the extra phone call?  If you’re in manufacturing, do you try something different?  It’s easy to get comfortable with the way things are.  If you get too comfortable, just remember, someone wants what you have.  They’ll work to take it from you.  Work harder.  Remember, whether you think you can or think you can’t, you’re right.

Postscript:  Eventually, the Browns win a game and hopefully that will turn them in the right direction.  Of course, most fans thought they couldn’t do worse than a 1 and 15 record two years ago and then they proceeded to go 0 and 16 last year…

Never Underestimate the Resilience of the US Economy

September 10th, 2018

It was an interesting week for the political class.  Bob Woodward’s book about Trump came out.  The New York Times published an “anonymous” op-ed from a Trump administration employee.  The Senate acted like petulant children in hearings for a new Supreme Court justice.  Bernie Sanders introduced the BEZOS act (Stop Bad Employers By Zeroing Out Subsidies), targeting large employers who do not pay “fair” wages.  Potential trade wars with Canada and China continue to be in the news.  I’m sure I missed a few of the circus acts that we, the citizens of this great country, finance.  Links to some of them are below.

Despite all that is going on in Washington D.C., the Labor Department announced the unemployment rate is at 3.9%.  Private employers added new jobs a record 95th straight month.  Wage growth accelerated by the fastest pace since 2009.  By all accounts, the US economy is performing well.  The US remains the world’s economic engine.   Reductions in regulations and reductions in tax rates are having a positive impact on the economy.  To paraphrase Winston Churchill, capitalism isn’t perfect, but it’s the best thing we’ve got.

We will certainly have an end to this economic cycle and it will probably be caused by the uncertainty that our government creates.  To anyone that thinks more government is the answer to economic cycles, please look at the data.

The Sideshow:

Our president attempts to say anonymous )

Stop Bad Employers By Zeroing Out Subsidies:

“Bernie Sanders introduces the BEZOS Act, slamming Amazon’s low wages”

“I am Part of the Resistance Inside the Trump Administration”

“Bob Woodward’s new book reveals a ‘nervous breakdown’ of Trump’s presidency”

The Personal Touch Wins

September 4th, 2018

I was reminded of one of my earliest and most important business lessons last week.

One of my first jobs was a paper boy.  I loved it.  I got up early, which I still like to do, and made a lot of money, which is also a fun thing.  Collecting payment was not a fun task.  I swear people pretended not to be home.  The “I want my $2” scene from the movie Better Off Dead could have been played by me or any other paper boy or girl. (

I was out collecting one day.  I screwed something up and ended up stopping at a prepaid customer’s house.  We weren’t supposed to collect from prepaid customers.  By the time I realized my mistake, the door was already open.  I swear the guy was six foot five and a chiseled two hundred and seventy-five pounds.  As I soiled myself, he sternly said, “What the *$() do you want?”  I gathered my composure and said, “Hi Mr. Jones, I’m Brian Gale.  I’m your paper boy.  I just wanted to make sure you were satisfied with my service.”  He had a startled look on his face, said, “Wait here,” and shut the door.

I had no idea what was going to happen next.  It seemed like I stood there for an eternity.  He came back, handed me a twenty dollar bill and said, “As long as you keep my paper on my porch and keep it dry, we’ll have a great relationship.”  I think I mumbled thank you and hurried on.  To an eleven year old boy, twenty bucks was a fortune!

I started stopping at every prepaid customer’s house.  I didn’t always have positive results, but I learned a lesson: check in on your customers.

Last week, I was in my car.  I had traded phone calls with a friend.  As background, my wife says I mumble quite a bit.  I activated the blue tooth in my car and asked to call my friend.  Again, not paying attention, before I knew it, I had dialed a customer.  His name is nothing like my friend’s name.  It was ringing before I could hang up.  I didn’t want to say I didn’t mean to call him, so I said I just wanted to check to see how he was doing and how our company was doing.  He was floored.  I don’t know if we’ll get additional business or not, but we had a great conversation and I learned a little about him and his business.

Especially in times of turmoil, reach out to your customers.  Say hi.  Ask how they’re doing.  The personal touch will set you apart from your competition.

Thank You, Sir, May I Have Another (Price Increase)!

August 27th, 2018

Citing continuing “…increases in the cost of our raw materials, supply continuity on critical components and a sustained increase in transportation and logistics costs”, Avery Dennison announced a price increase last week.  This action represents the third price increase in the last 10 months.  The price increases announced (not including freight and surcharge increases by our pressure sensitive suppliers) total anywhere from 13 to 20% depending on the product line.   In the past, I have written about chemical shortages, decreases in liner supply, challenges with freight, and general commodity increases.  These challenges continue.

It is human nature to think things stay the same.  For the last several years, prices did not increase and in some cases, trended down.  We got lulled into believing things would stay that way.  Now that we’re going through a period of increases, we think prices will continue to go up forever.  They won’t but I don’t know if this period of inflation is over yet.  The US economy remains strong.  Supply dynamics specific to our industry (leuco dye shortage and liner supply) remain.  And think about this: over the last year, oil (WTI) is up about $20 a barrel, or 42%.  However, it is still $40, or 60%, below its 2013 price.  The price decrease over this time period is largely driven by the increase in US oil supply from fracking.  If I could figure out the equilibrium price for oil, I wouldn’t be selling labels…


WTI Price Chart

As with most things in life, this too shall pass.  Continue to focus on your value proposition and prices will take care of themselves.  The more value you provide, the easier it is to pass along price increases.