MHEDA moves to new address
After 40 years in Vernon Hills, Illinois, the Material Handling Equipment Distributors Association or MHEDA has moved! MHEDA purchased the building in 1980, and for several years they had been contemplating getting out of the real estate business. The first-floor tenant was a built-in buyer, and MHEDA closed the sale on September 30th. With the MHEDA staff primarily working from home in 2020, they realized that a smaller office would not only work well for them but would also save the association money. “When anyone on our team needs the use of a traditional office, we have the tools in place,” said MHEDA CEO Liz Richards. “You can rest assured that we will continue to provide you with the value you expect. We’d love a visit from you when you’re in town”, Richards added. You can find the MHEDA offices at 118 S. Main Street, Suite 11, Wauconda, IL 60084.
What does it take to become a sales success?
There is no quick fix, magic wand, or potion that will give you the success you’re dreaming of. So, what’s the secret of sales success? Well, it’s not a single secret, it’s a secret formula. There is a series of 14.5 principles, strategies, and actions that will lead you to success. OK, OK, the Secrets of Sales Success are not real secrets, they’re fundamental steps that successful salespeople and entrepreneurs have been executing for centuries. You can too. Here are the 14.5 Secrets of Success: Believe you can. Believe that you’re the best and that you’re capable of achievement is the hardest thing to do. It requires daily dedication to self-support, self-encouragement, and positive self-talk. You must also believe that your product, service, and company are the best. Create the environment. The right home and work environment will encourage you. Supportive spouse, family members, and coworkers will make the road to success a smooth ride. It’s up to you to create it. Create the associations. The easiest way to learn about how to succeed is to hang around successful people. Who do you hang around with? That is who you are likely to become. Plan for the day. Since you don’t know on which day success will occur, you’d better be ready every day. Prepare with education, plan with goals and the details for their achievement. Learn and goal are the surest methods to be ready for your success. Become valuable. The more valuable you become, the more the marketplace will reward you. Give first. Become known as a resource, not a salesperson. Your value is linked to your knowledge and your willingness to help others. Recognize opportunity. Stay alert for the situations that can create success opportunities. The little-known key is to get and maintain a positive attitude. Attitude allows you to see the possibilities when opportunity strikes because it often shows up in the form of adversity. Take risk. Taking chances is a common thread among every successful person. “No risk, no reward,” the saying goes and it’s true. Most people won’t risk because they think they fear the unknown. The real reason people won’t risk is that they lack the preparation and education that breeds self-confidence (self-belief) to take a chance. Take action. Just do it (Nike) is the expression for the ’90s. Actions are the only way to bridge plans and goals with accomplishment. Nothing happens until you do something to make it happen every day. Take responsibility. Don’t blame others or yourself. Take responsibility for your actions and decisions. Blaming others is an easy thing to do, but leads to a path of mediocrity. Successful people take responsibility for everything they do AND everything that happens to them. Make mistakes. The best teacher is a failure. It’s the rudest of awakenings and the breeding ground for self-determination. Don’t think of them as mistakes, think of them as learning experiences not to be repeated. Keep your eye on the prize. Post your goals. Stay focused on your dreams and they will become reality. Too many foolish diversions will take you off the path Balance yourself. Your physical, spiritual and emotional health are vital to your success quest. Plan your time to allow your personal goals to be synergized with your work goals. Invest, don’t spend. There should be a 10 20% gap between earning and spending. Clip your credit cards in half and make a few investments with professional guidance. Stick at it until you win. Most people fail because they quit too soon. Don’t let that be you. Make a plan AND a commitment to see the plan through no matter what. Don’t quit on the ten-yard line. Have whatever it takes to score. 14.5 Ignore idiots and zealots. Also known as pukers, these people will try to rain on your parade (discourage you) because they have no parade of their own. Avoid them at all costs. There’s the secret and it’s not real complicated. It’s not nuclear physics or brain surgery. And now that I’ve shared it with thousands of people, you’d think there would be a surge in the ratio of successful salespeople. Nope. The reason the success formula is considered a secret is that it remains an enigma. It seems that there are very few people who are willing to put forth the effort to get from where they are to where they want to be. Most make excuses and blame others for their own poor choices. The biggest secret (and the biggest obstacle) to success is you. The formula is there for everyone to know BUT, there’s a big difference between knowing what to do, and doing it. About the Author: Jeffrey Gitomer is the author of twelve best-selling books including The Sales Bible, The Little Red Book of Selling, and The Little Gold Book of Yes! Attitude. His real-world ideas and content are also available as online courses at www.GitomerLearningAcademy.com. For information about training and seminars visit www.Gitomer.com or email Jeffrey at salesman@gitomer.com or call him at 704 333-1112.
Quarter One: Here we come.
I am composing this month’s column after opening the presents Santa left for me. All I can say is he must have enjoyed the shot glass filled with 30-year-old Scotch I left under the tree. Also been wondering how you reacted to last month’s column which did not express much hope for 2021. Adding another six weeks of data to the thought process has not changed my mind much, and in fact, I came up with another risk or two that need attention. After listening daily to numerous financial gurus I am intrigued by the consistent theme that “Your business will not be the same when we come out of this Pandemic period”. But upon pondering this question for a couple of weeks I am starting to put together a picture of what may change, why it will change, and how it will impact companies selling equipment, parts, and service. So, what are the new threats I uncovered in the last six weeks? It has to do with an event that will prove negative no matter how your customer base performed for you in 2020. It has to do with the Stock Market, and the bubble the market finds itself in the middle of a major RECESSION. How does that work? And I think we all know what is on the horizon. Think back to the late 1990’s or 2008-09 period. Looking at some of the S&P Valuation Factors (and believing we are in a major recession) the factors are a little hard to believe. Median EV to Sales 4.0 US Total Market Cap to GDP 170% Median Price to Sales 2.8 Median Price to Book 3.9 Median EV to EBITDA 15 Average Price to Earnings 25 Think you could sell your company based on these factors and being able to fund the purchase debt. NO WAY! The buyer could not get the financing to finance the deal because post-purchase cash flow would not support it. Another source covers 1945 to 2025 and calculates that the average PE ratio over this period is 17. But we are at 31 which is higher than all past bull market peaks during this period. The risk here is we know what is coming in terms of a market correction. It is only a matter of time. The point is that even if you had a banner year because your customer base represented the right distribution streams or non-exempt companies, a major market correction (similar to the big ones in the past) will put all companies in a pinch. In other words, no matter how well you did in 2020 with the expectation to repeat in 2021, I would consider this market risk (very seriously) and avoid new major fixed commitments. So even if you were a high-flyer in 2020 you are not exempt from running different risk profiles to see how you would have to adjust if revenues fell by 50%. Dig out my prior column for additional risk analysis. Now let us spend a few minutes considering how your company will emerge on the other side of the Pandemic. Think about it. Have your management team think about it. Because no matter how big or small your company is, or how profitable it was in 2020, there are changes coming you have no control of, and changes required to remain competitive meeting customer needs (which will also change) 18-24 months from now. After considering the options available regarding the industry I see two trends resulting from this Pandemic period, caused by the new paradigm shift in the ways you did “Business” and the patterns developing in the industry forcing changes in the way dealers operate post Pandemic. One is Technology and all the changes available therefrom The other is changes in customer needs and the ability of current dealers to meet those needs As a result of these shifts, two types of dealers will be created. The first looking like the status quo, who if they remain with the status quote will find revenues falling, margins decreasing and company value shrinking. At the other end of the spectrum will be the TOP 25% dealers who will grow during this period, pick away at competitor’s customers, have much higher sales per employee numbers, higher margins from current revenue silos as well, and new revenue silos. And they will do this with manageable fixed costs, with the ability to shift the business model to meet customer needs and solutions to more than they are providing currently. This latter group will embrace technology in all its forms, and as a result employ fewer people in most departments, except maybe in the service department depending on what services are being offered. Every transaction will be digitized where the system does the work with management reviewing the results in real-time. We will get into this further next month. TAX NOTE Round 2 or PPP2 is on the horizon and after reviewing the first drafts of the program, it appears the amount available from the PPP2 would be similar to the PPP1 amount. There is a major difference, however. With Round 1 recipients filled in the application and received a loan. This time you need to prove you need it. What the publications state is if you have one quarter in 2020 that was 25% less than the same quarter in 2019, you qualify. This is tougher than it sounds. There is also an SBA benefit available. If you are funding a business mortgage via the SBA you can receive a pass for three months (last I heard). Not sure how they will handle it, but you would get the break when you need it. PPP2 forgiveness will be tax-free (this is what they said last time). And there is the noise that PPP1 will be tax-free, eventually. See you next month. Garry Bartecki is a CPA MBA with GB Financial Services LLC. E-mail editorial@mhwmag.com to contact Garry
The Idea Men
As a full-time consultant, I get many opportunities to sit with dealer principals and their leadership teams and plot different strategies for making tangible change and improvement in the organization. I was in a meeting a couple of years ago with a group of service and parts managers. We were trying to put the tools in place to launch some new initiatives. During the meeting, we were assessing the bottom-line value of current practices, and then comparing them to the estimated effect of revised practices. I plotted the estimated improvements using a Pareto chart. This type of chart displays the effect of individual initiatives in a bar chart format and then overlays the cumulative effect of the combined changes on a single line. We reviewed the individual practices one by one. My goal in the exercise was to “find the limiting step” in each process. What was the obstacle that would prevent this practice from being effective? Was it a lack of understanding, a lack of proper tools, or a lack of connection between team members? As careful and good intentioned as we are in trying to anticipate where the bottlenecks will be, we can’t really do that without actually putting our hands on the levers. During this process, I noticed that when we discussed obstacles that were complex, and not easy to overcome, the managers would say: “Don’t ask me…I’m just the IDEA man! I’m paid to focus on the “Big Picture”. I don’t have time to babysit this change. My team will find a way to sort out the details.” I must respectfully disagree. I have learned that new ideas lose their inertia if the leadership doesn’t take the time to actually walk the process through themselves. Sometimes this becomes difficult because stakeholders in the plan either don’t understand why the changes are needed or don’t see any benefit for themselves in the new process. Other times the company may lack the digital and procedural tools to make the process understandable to all concerned. Good leaders however monitor and participate in all aspects of a new initiative long enough to recognize and address any shortcomings. Doing so not only broadens the leader’s understanding but also signals to the participants that the leader is just as interested and involved in the change as they are. With every change comes some form of resistance. Left to itself, a river will find its way back to the original watercourse. Leadership has to be more than simply dictating change by edict. The hard work is in building a strategy and action plan that addresses and defeats resistance “in advance”. Plans that actually move the needle will normally include: Understanding and charting the current system Developing both goals and measurements to chart improvement Getting specific input and buy-in from stakeholders and participants Including cross-functional training Performing beta testing Setting and committing to a time frame for adoption Monitoring initial results Making adjustments Final drafting of a new SOP Leadership cannot afford to belong on theory, and short on substance. There are a lot of “idea men” in business today, and that’s not all bad. Ideas are where the seeds of success are sown. The trouble usually shows up when all the leader does is sow seed. Once a seed is sown, the work really begins. Much of that work, no doubt, is done by the crew. But the leader has to have an active hand in the entire process, even when the process involves things OTHER than sowing seeds. Cultivation, weeding, watering, feeding, fertilizing, and harvesting is all requisite tasks in the process of turning an “idea” into the actual improvement estimated on that Pareto chart. I have worked for guys who were so far into the world of “ideas” that the real leadership in the group had to be assumed by someone else. That’s what sometimes happens to leaders who wander too far ahead and don’t keep their hand or at least their eye on the long-term implementation of the plan. Leaders who leap too far ahead get marginalized, and mentally dismissed by their charges. The world of ideas should be used to create a vision for the next level of success. It’s a neighborhood you need to visit often as a leader, but it’s a bad idea to establish a permanent residence there. As a side note, in January of 2021, I completed my certification for the 6 Sigma Green belt. Managing change is what the 6 Sigma process is all about. The method is used primarily in a manufacturing setting, but the framework and steps can be applied to any type of change or improvement that is needed in an organization. If you want to round out your abilities to bring meaningful change to your organization, I highly endorse the 6 Sigma process. Dave Baiocchi is the president of Resonant Dealer Services LLC. He has spent 38 years in the equipment business as a sales manager, aftermarket director, and dealer principal. Dave now consults with dealerships nationwide to establish and enhance best practices, especially in the area of aftermarket development and performance. E-mail editorial@mhwmag.com to contact Dave.
The less lead you start with, the less lead you have to clean up!
Li-ion batteries became widespread not only in personal electronics, medical devices, aerospace, and automotive but also in heavy industrial applications like electric forklifts in the Material Handling industry, and even mining. Nevertheless, many industries continue to rely on a lead-acid battery pack, including electric forklifts applications. Are you using traditional lead-acid forklift batteries in your operations? If yes, this article is a must-read! You need to learn what lead decontamination measures are mandated at the place of production (spoiler alert: Pandemic precautions are a joke compared to what you have to do to stop lead poisoning of workers and their families). Whether you have all the safety protocols in place to prevent lead poisoning and decontaminate before going home to protect your family, the main question is, “Why should you continue using lead?” Dan Askin, a Speaker at a recent BCI event “Worker Decontamination: Preventing Take-Home Lead” says it best: “The less lead you start with, the less lead you have to clean up.” Why Manufacturers of Lead-Acid Batteries Take Workers’ Lead Decontamination Seriously, and Why You Should Too On November 4, 2020, I participated in a webinar titled “Worker Decontamination: Preventing Take-Home Lead & The Role of Operations and Supervisors in Lead Health Programs” organized by Battery Council International. I have full respect for the organizers of this education effort aimed at reducing the harm. I was quite impressed with the mandated lead decontamination measures to prevent spreading lead dust (and consequent lead poisoning) outside of a workplace. The health risks discussed were mainly those for the families of employees of lead-containing product manufacturers. Today, 75 percent of lead used in industrial manufacturing goes into lead-acid batteries, so we are talking about manufacturers and users of lead-acid batteries here. Lead Poisoning Since lead is a dangerous neurotoxin, especially dangerous for children, a safe level of lead dust on the floor is defined at below 10 micrograms (one-millionth of a gram) per square foot. According to Dan Askin, the first speaker at the event and the president and technical director of ESCA Tech, a company developing blood lead level reduction programs, If a worker takes 1 milligram (one-thousandth of a gram) of lead home, that is enough to cover 100 square feet at the U.S. Environmental Protection Agency’s maximum safe level. Askin provided an example of a one-week test of a battery plant air-shower. At the entry to the men’s locker room, they recovered 108 milligrams of dust per person who walked through the air-shower. This dust was typically 60 to 70 percent lead. That means we are starting with more than 70 milligrams of lead to be removed before a worker leaves the plant. If this much lead from one person was uniformly dispersed throughout the locker room, the result would be 700 square feet of space at 100 micrograms per square foot. How Can a Worker Take Lead Home? How can one take lead home? Multiple ways: Lead dust is transmitted on shoes, clothes, skin, hair, fingernails, phones, keys, wallets, coins, tobacco, cosmetics and toiletries, socks, underwear, glasses, watch, rings, jewelry, and of course, cars. It can even be carried in your sweat. To prevent lead from being carried over to homes, companies should install advanced filters in their air conditioning systems throughout the facility, not only in the working areas but also in corridors, meeting rooms, and offices. Enter and exit routes must not cross. A policy of no street clothes or shoes inside must be enforced. If you touch your shoes, re-wash your hands. And wash your car before driving home every day. Battery manufacturing plants must check daily whether training rooms and chairs are used by people in both street clothes and work clothes. Are the training room chairs cleanable? Where are the socks washed? If the socks are washed at home, the lead will collect in the recirculation tank of a home washer and be re-suspended in the rinse water in every load. And so on. In a nutshell, if your operations involve lead products, the rules of personal protection from lead poisoning and decontamination before you leave the facility to go home must be very strict. And the punishment for not following these rules needs to be quite severe. When I asked if these measures apply to workplaces that use the lead-acid technology, not manufacture them, Askin mentioned battery distribution centers and industrial batteries charging stations, with which they “had issues in the past.” He could not give more details because there is simply not enough data. These facilities are not regulated and measured in the same way as production areas, and the blood lead levels of workers and their families are simply unknown. Askin finished his presentation with a very clear message: “The less lead you start with, the less lead you have to clean up!” Leave the lead dust behind The next two speakers, Carl Raycroft, vice president, EHS compliance, at RSR/ECOBAT, and Pedro Chacon, senior director of manufacturing at Trojan Batteries, both presented examples of policies and best practices at their organizations aimed at mitigating the risk of lead poisoning. Rigorous testing and reporting of the lead blood level test results, investments in lead decontamination equipment and employee education, and hygiene improvements of workplaces, offices, and lunchrooms all lead to reduced lead levels in the blood. And this has also become an important KPI of the management’s performance. Now, “thanks” to COVID-19, we all know very well what life in a respirator feels like. And I can truly appreciate the difficulty of this and all the other efforts necessary to keep the risk of lead poisoning at an acceptable level. But listening to the presentations, I kept asking myself, “What is this level of acceptable risk and why do we need to put up with this risk at all?” In my previous article on some obvious problems with lead-acid batteries recycling called “The New Merchants of Death: Why Lead Acid Batteries Manufacturers Are Increasing Production Volume?” I wrote about
Port of Long Beach moves a record 8.1 Million TEUs in 2020
Busiest month, the most active quarter also achieved in December Essential workers at the Port of Long Beach moved more than 8.1 million cargo container units in 2020, setting a record in the face of economic uncertainty due to the COVID-19 pandemic and the ongoing trade war with China. The Port ended 2020, its busiest year on record, with 8,113,315 twenty-foot equivalent units (TEUs) moved, an increase of 6.3% from 2019. Imports rose 6.4% to 3,998,340 TEUs. Exports totaled 1,475,888 TEUs, up 0.2%, while empty containers increased 9.9% to 2,639,088 TEUs. The Port exceeded the previous annual record set in 2018 by 22,292 TEUs. “I want to thank our frontline workers on the docks who kept cargo moving during this unprecedented moment in history, ensuring the safe, secure, and timely delivery of vital medical equipment and consumer goods,” said Mario Cordero, Executive Director of the Port of Long Beach. “We have all endured incredible hardships with COVID-19, but I am looking forward to 2021 as a time of economic recovery and a renewed focus on our industry partners, infrastructure projects, and community stakeholders.” “This record demonstrates the effort of our dockworkers and the Port’s determination to collaborate with our partners to overcome the devastating economic challenges presented by COVID-19 and the trade war with China,” said Long Beach Harbor Commission President Frank Colonna. “We look forward to continuing to work toward economic recovery along with our stakeholders.” The COVID-19 pandemic drove down consumer demand for goods during the first half of 2020, leading to a 6.9% decline in cargo compared to the same period a year earlier. The San Pedro Bay ports complex – Long Beach and L.A. combined – had 104 canceled sailings in the first half of 2020, 37 of which were destined for Long Beach. That was up from 41 canceled sailings for both ports in the first half of 2019. It was a different story for the second half of 2020 when preliminary estimates show that the Port had 104 unscheduled container ship calls that made up for voyages canceled earlier in the year, more than quadrupling the unscheduled sailings reported during the same period in 2019. Demand rose for medical equipment, along with home improvement items, exercise equipment, and office furniture as consumers endured shelter-in-place orders and worked from home during the COVID-19 epidemic. The surge in cargo continued through the final months of 2020 as retailers stocked their shelves for the holiday shopping season. Along with capping 2020 as its all-time busiest year, the Port accomplished two additional records in December by achieving the busiest month and the most active quarter in its 110-year history. The Port processed 2,406,010 TEUs from Oct. 1 to Dec. 31, a 23% increase from the fourth quarter of 2019. It also topped the previous record set during the third quarter of 2020 by 131,740 TEUs. Trade was up 22.6% in December compared to the same period in 2019. Dockworkers and terminal operators moved 815,885 cargo container units in December and broke the “best month” record set in October 2020 by 9,282 TEUs. Imports grew 25.6% last month to 406,072 TEUs compared to December 2019 and exports increased 5.6% to 132,374 TEUs. Empty containers headed back overseas jumped 26.3% to 263,852 TEUs. For complete cargo numbers, visit polb.com/statistics. To learn more about the Port’s record-setting year, please watch the 2021 State of the Port, which will be held this year as a virtual program at 9 a.m. on Thursday, Feb. 4, at www.polb.com/stateoftheport.
MHEDA delays the opening of Convention Registrations and booth sales
The Material Handling Equipment Distributors Association (MHEDA) informed its members that they will be delaying opening the convention registration and booth sales until early February when a decision will be made on the 2021 MHEDA Convention that is slated to be April 24 – 28, 2021 in Austin, Texas. MHEDA officials said in an emailed statement sent to members on January 14th that due to the continued threat of the COVID-19 virus they will be delaying the opening of registrations and booth sales. MHEDA will continue to monitor the situation through the month of January and will keep members posted in early February as to whether they will move forward with an in-person event in April, potentially move to a later date or offer an alternate, virtual solution. “Our primary goal is the safety of our members and the MHEDA team”, said Liz Richards, CEO of MHEDA. “We are extremely grateful for your support and thank you for your involvement in MHEDA Richards added.
Episode 143 – Supply Chain Sustainability with Justin Goldston
In this episode, I was joined by Justin Goldston who is a professor, speaker, Ph.D., and all-around supply chain expert. Justin currently teaches supply chain at Penn State University and Georgetown University. He has spoken at many conferences all around the world and was scheduled to speak at a conference in Vietnam just a few hours after we recorded this episode. We discuss the current education climate for the supply chain, his take on sustainability in the supply chain, and the future place of automation in the supply chain. Key Takeaways As a professor, Justin is constantly trying to engage his students in different ways and has had to adapt to the pandemic style of teaching. He gives us some insight on how the pandemic has had an impact on education and how some professors are struggling to translate their education into a virtual environment. We discuss some of the unique ways that Justin tries to interest his students in the supply chain through experiential learning and exposing them to many different professionals in the industry. It is a positive note for the industry that he is finding student’s interest in the supply chain continues to increase. Justin often discusses sustainability in his presentations but not in the typical way that initially comes to mind. He goes in-depth into his thinking behind sustainability in the global supply chain and how it involves many facets of an organization. One interesting perspective is his views on diversity in organizations. He discusses how diversity and inclusion are often discussed but what is sometimes missed is the expansion of the talent pool throughout the globe and the great impact that can have on a company’s bottom line. This is a really interesting insight as it gives companies a better footprint in attracting talent and also understanding global markets to help introduce their products to them. One of the constant ongoing discussions in the supply chain is the future of jobs within an automated operation. Will there be dark warehouses or will it be collaborative? Justin gives us his take and also some great examples of when dark operations were attempted but had some struggles. I think we are both on the same page when it comes to the belief that automation will be a collaborative effort and the human element will always be needed at some level. Listen to the episode below and let us know your take on sustainability in the supply chain in the comments. The New Warehouse Podcast EP 143: Supply Chain Sustainability with Justin Goldston
Women In Trucking Association announces continued partnership with Walmart
The Women In Trucking Association (WIT) announced that Walmart has renewed its Gold Level Partnership for the twelfth year, helping the nonprofit organization attract more women to the transportation industry and empower them to be successful. In addition to providing financial support as a gold partner, the company actively participates in the association. Walmart’s Vice President of Private Fleet Operations East Ryan McDaniel serves on the WIT board of directors. The company also sponsors the annual Female Driver of the Year Award, a way to recognize outstanding professional female drivers leading the industry in safety standards and working to enhance the public image of trucking. “Walmart is pleased to renew our Gold Level Partnership with the Women in Trucking Association for the twelfth year,” said Ryan McDaniel, Vice President, Walmart Private Fleet Operations East. “Supporting female professional drivers is very important to Walmart and the industry as a whole. We’re proud to promote gender diversity in transportation and celebrate the accomplishments of our female drivers.” “We continue to make significant strides in our efforts to advance gender diversity in the industry, whether behind the wheel or in the office.” said Ellen Voie, WIT president and CEO. “Without the support from influential business leaders like Walmart, this progress is not possible. We are grateful for their continued support and partnership.” Since 2007, WIT has been focused on engaging more women in the industry at all levels and minimizing the obstacles they face. A few recent accomplishments include the first virtual Accelerate! Conference and Exhibition, unveiling its Driver Ambassador Trailer, and providing driver members with free health support programs during the COVID-19 pandemic.
Do you have a Quantification Addiction?
We love numbers. We’re quite obsessed with them. Everything we do in business has to be measured and tracked in a nice, neat metric, often color-coded with a red-yellow-green indicator. We also pick numbers that are easy to capture, typically pulled from a report already being generated for another purpose. And oftentimes, performance bonuses raises, and other incentives are tied to these dashboard numbers. So needless to say, we live and breathe by them. However, this information never tells the whole picture, and frequently fails to provide the organization insight into threats and disruptions from left field. Smaller, more abstract – often called “thick data” – is just as critical to capture and track. It simply doesn’t come in as tidy of a format as our “big data” numbers. This ambiguity requires interpretation, which can be seen as difficult and not as definitive as a clear-cut number. The problem is this bias towards quantitative data blinds organizations to critical nuances that aren’t found in oversimplified, aggregate numbers. While it’s comforting to see that our average Net Promoter Score is a 7 and has remained there for 3 consecutive quarters, this information provides nothing as to why or how it’s there, much less what’s lurking in the shadows to drop it. Take the analogy of personal health. You may go and get an annual physical with your primary care physician. They take all the vital statistics – blood pressure, pulse, oxygen saturation, cholesterol levels, weight, height, etc. All the numbers look good, and they haven’t changed significantly over the last few years. Everything’s great. However, that ‘numerical snapshot’, while tracked over time, doesn’t address more subtle and harder-to-measure elements, such as stress levels, mental health, or something as obvious as an ankle fracture. While you may say, “Well, obviously if someone had a fractured ankle, they would bring up that issue to the physician.” Or “If they had mental health concerns, they would voice them to their doctor.” However, in organizations, these types of things often aren’t brought to the forefront, as they aren’t part of the quantitative dashboard. Consider a situation where customers continually voice their frustrations about the bill pay feature on your company website. Front-line employees hear the feedback on a daily basis, and possibly put in a request to IT to address the situation. Yet, the skin-in-the-game for IT is their website uptime – measured and tracked on the dashboard. Even though the bill pay feature is an issue, it’s not a priority, because the “numerical metrics” drive organizational priorities, and in turn, behavior. It’s hard to measure customer frustration with the bill pay feature. You might collect anecdotal evidence. You might feel it’s simply isolated to a handful of less technology-savvy customers. You may believe it’s just as good as your competitor’s offering, so there’s little need to change it. And there’s no way to tie it’s the impact to the financial metrics. So it languishes amongst a long list of other “to-do” items because there’s no effective way to measure its value. And this is the problem. By solely focusing on aggregate numbers, you lose sight of the myriad of small things that add up to true strategic differentiators. Subtle things, including respect and trust, communicating in a way that connects with a customer’s emotional needs and empowering customers to conduct business when and how they want – these things can’t be measured easily, but we all know they have a huge impact. We need to step away from our addiction to numbers and take time to look at the smaller, abstruse, hard-to-measure influences on business success. Consider this – you know being polite and saying ‘thank you’ to customers is a no-brainer – but how do you measure the value of that? You don’t. But just because you can’t measure it, doesn’t mean you don’t do it. About the Author: Andrea Olson is a speaker, author, behavioral economics, and customer-centricity expert. As the CEO of Pragmadik, she helps organizations of all sizes, from small businesses to Fortune 500, and has served as an outside consultant for EY and McKinsey. Andrea is the author of The Customer Mission: Why it’s time to cut the $*&% and get back to the business of understanding customers and No Disruptions: The future for mid-market manufacturing. She is a 4-time ADDY® award winner and host of the popular Customer Mission podcast. Her thoughts have been continually featured in news sources such as Chief Executive Magazine, Entrepreneur Magazine, The Financial Brand, Industry Week, and more. Andrea is a sought-after keynote speaker at conferences and corporate events throughout the world. She is a visiting lecturer and Director of the Startup Business Incubator at the University of Iowa’s Tippie College of Business, a TEDx presenter, and a TEDx speaker coach. She is also a mentor at the University of Iowa Venture School. More information is also available on www.pragmadik.com and www.thecustomermission.com.
Paxton begins his role as CEO at MHI
The Board of Governors of MHI announced the appointment of John Paxton to the position of Chief Executive Officer of MHI. Paxton succeeded George W. Prest at his retirement as CEO on December 31, 2020. Paxton was named MHI COO/CEO Designate in August of 2018 and brings over 30 years of experience to MHI including over 20 years of executive leadership at Demag Cranes and Components. He holds a BS in Mechanical Engineering from Ohio State University and an MBA in International Business from Kent State University. Prior to joining the MHI Team, Paxton has been recognized for his volunteer leadership at MHI including serving as President of the Crane Manufacturers Association (CMAA), President of the Hoist Manufacturers Institute (HMI), and as the Chairman of the Board of MHI. “John’s leadership skills and experience are the perfect match for MHI to continue fulfillment of its mission to deliver member value every day and support the vision to be the authoritative resource for the material handling industry. I am confident that John and the team will take the vision and mission of MHI to the next level,” said George Prest.” MHI Industry Chairman Brett Wood added, “John has earned the trust and confidence of the Board, his peers, and the MHI Team. His dedication, commitment, and business acumen resulted in his emergence as the best person to lead MHI. His leadership ability and knowledge of the material handling industry will elevate MHI’s role in the broader supply chain conversation.” “It is an honor to be selected to lead MHI forward and build upon the strong foundation that George Prest and the MHI team have built. We look forward to continuing to fulfill MHI’s powerful mission of delivering member value every day,” said Paxton. “Our focus is to provide exceptional knowledge resources, connections, market access, and industry leadership and to expand access to MHI’s important content and resources. The members of MHI fill critical roles by providing solutions and best practices to the overall supply chain, and MHI provides the collaborative community to collectively elevate our industry.”
Women In Trucking announces its January 2021 Member of the Month
The Women In Trucking Association (WIT) has announced Karen Noel as its January Member of the Month. She is an owner/operator with Forward Air. After working for over 30 years in the banking industry, Noel found herself laid off. In 2015, her husband was changing careers and asked her if she wanted to go into trucking with him. It was an industry he was familiar with, but she had no experience. Noel decided to join him on the road as a passenger. “Once I was out on the road with him, I saw other women truck drivers,” said Noel. “It never registered with me that women could be truck drivers too.” She started asking every female truck driver she saw how they felt about the career. All the responses she received were positive. Six months into being a passenger with her husband, Noel decided to go to school to earn her CDL. Without a background in trucking, she really worked hard to overcome challenges, such as backing. She credits her husband for encouraging her throughout the process and being her “rock.” Once she earned her CDL, Noel and her husband worked for Knight Transportation as a team for three years. Now, they are owner-operators with Forward Air. “Trucking has made me a better person. I’ve learned patience while out on the road,” said Noel. “I’m excited to be a member of Women In Trucking and support its mission. I would like to see more women working in the trucking industry.” Noel wants to be an example to her grandchildren that they can be anything they want to be.
Women In Trucking Association announces continued partnership with Freightliner Trucks
The Women In Trucking Association (WIT) has announced that Freightliner Trucks has renewed its Gold Level Partnership to help the nonprofit organization elevate the issue of gender diversity in transportation and logistics. Since 2012, Freightliner Trucks has supported WIT. As part of WIT’s mission to recognize the accomplishments of women in the industry, Freightliner Trucks has continued to sponsor the annual Influential Woman in Trucking Award. In addition, Kary Schaefer, general manager of Product Strategy and Market Development for Daimler Trucks North America, serves on the WIT board of directors. “Freightliner Trucks is proud to be part of WIT”, said Schaefer. “The mission and goals of WIT closely align with those of DTNA and this partnership gives us an opportunity to share resources to promote and celebrate diversity and inclusion in our industry.” “We are grateful to partner with a key industry leader like Freightliner,” said Ellen Voie, WIT president and CEO. “Their advocacy accelerates our efforts for more diversity and inclusion in the workplace.” Since 2007, WIT has been committed to encouraging women to consider careers in the trucking industry, addressing obstacles that might keep them from succeeding, and celebrating the success of its members. The first virtual Accelerate! Conference and Exhibition, unveiling its Driver Ambassador Trailer, and providing driver members with free health support programs during the COVID-19 pandemic, are just a few examples of recent initiatives that are helping the organization achieve its mission.
IRS begins to send second stimulus payments to millions of Americans
Effective December 29th, the Internal Revenue Service and the Treasury Department will begin delivering a second round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 to millions of Americans who received the first round of payments earlier this year. The initial direct deposit payments may begin arriving as early as December 29th for some and will continue into next week. Paper checks will begin to be mailed, Wednesday, Dec. 30th. The IRS emphasizes that there is no action required by eligible individuals to receive this second payment. Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of Jan. 4, 2021. The IRS reminds taxpayers that the payments are automatic, and they should not contact their financial institutions or the IRS with payment timing questions. As with the first round of payments under the CARES Act, most recipients will receive these payments by direct deposit. For Social Security and other beneficiaries who received the first round of payments via Direct Express, they will receive this second payment the same way. Anyone who received the first round of payments earlier this year but doesn’t receive a payment via direct deposit will generally receive a check or, in some instances, a debit card. For those in this category, the payments will conclude in January. If additional legislation is enacted to provide for an additional amount, the Economic Impact Payments that have been issued will be topped up as quickly as possible. Eligible individuals who did not receive an Economic Impact Payment this year – either the first or the second payment – will be able to claim it when they file their 2020 taxes in 2021. The IRS urges taxpayers who didn’t receive a payment this year to review the eligibility criteria when they file their 2020 taxes; many people, including recent college graduates, may be eligible to claim it. People will see the Economic Impact Payments (EIP) referred to as the Recovery Rebate Credit (RRC) on Form 1040 or Form 1040-SR since the EIPs is an advance payment of the RRC. “Throughout this challenging year, the IRS has worked around the clock to provide Economic Impact Payments and critical taxpayer services to the American people,” said IRS Commissioner Chuck Rettig. “We are working swiftly to distribute this second round of payments as quickly as possible. This work continues throughout the holidays and into the new year as we prepare for the upcoming filing season. We urge everyone to visit IRS.gov in the coming days for the latest information on these payments and for important information and assistance with filing their 2021 taxes.” Authorized by the newly enacted COVID-relief legislation, the second round of payments, or “EIP 2,” is generally $600 for singles and $1,200 for married couples filing a joint return. In addition, those with qualifying children will also receive $600 for each qualifying child. Dependents who are 17 and older are not eligible for the child payment. Payments are automatic for eligible taxpayers Payments are automatic for eligible taxpayers who filed a 2019 tax return, those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits as well as Supplemental Security Income (SSI), and Veterans Affairs beneficiaries who didn’t file a tax return. Payments are also automatic for anyone who successfully registered for the first payment online at IRS.gov using the agency’s Non-Filers tool by Nov. 21, 2020 or who submitted a simplified tax return that has been processed by the IRS. Who is eligible for the second Economic Impact Payment? Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment. Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Generally, if you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced. How do I find out if the IRS is sending me a payment? People can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish only on IRS.gov. The tool is being updated with new information, and the IRS anticipates the tool will be available again in a few days for taxpayers. How will the IRS know where to send my payment? What if I changed bank accounts? The IRS will use the data already in our systems to send the new payments. Taxpayers with direct deposit information on file will receive the payment that way. For those without current direct deposit information on file, they will receive the payment as a check or debit card in the mail. For those eligible but who don’t receive the payment for any reason, it can be claimed by filing a 2020 tax return in 2021. Remember, the Economic Impact Payments is an advance payment of what will be called the Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR. Will people receive a paper check or a debit card? For those who don’t receive a direct deposit by early January, they should watch their mail for either a paper check or a debit card. To speed delivery of the payments to reach as many people as soon as possible, the Bureau of the Fiscal Service, part of the Treasury Department, will be sending a limited number of payments out by debit card. Please note that the form of payment for the second mailed EIP may be different than for the first mailed EIP. Some people who received a paper check last time might receive a debit card
Additional Tax Relief: Consolidated Appropriations Act 2020
The President has now signed the Coronavirus Response and Relief Supplemental Appropriations Act (The Act) as part of the Consolidated Appropriations Act, providing several new COVID-related relief programs. Amid funding for virus distributions, multiple relief causes, an extension of unemployment benefits, and $600 per person stimulus money, the bill provides $285 billion of funding and direction for a second round of Paycheck Protection Program (PPP) Loans, as well as various other economic relief measures, including the following: EIDL Loans Recipients who previously received EIDL loan advance amounts, but did not receive the full $10,000, can return for a second advance under similar payment criteria. EIDL loan recipients previously were required to reduce their PPP loan forgiveness by the amount of EIDL grant received. This is no longer the case. While you still cannot use the same expenses for EIDL grants and PPP forgiveness, borrowers will no longer be required to reduce their PPP forgiveness amounts by the EIDL loan Employee Retention Credit (ERC) The Employee retention credit has been extended through July 2021 and expanded for calendar quarters beginning after December 31, 2020, as follows: Employers who receive PPP loans can now be eligible for the ERC as well, provided that it only applies to wages that are not paid for with forgiven PPP proceeds. This provision is effective retroactively to the enactment date of the CARES Act. The ERC is expanded from a 50 percent refundable tax credit to 70 percent of eligible wages. The previous $10,000 annual wage limit per employee will now be a $10,000 quarterly limit. Thus, instead of a $5,000 credit per employee credit per year, it will be a credit of up to $7,000 per employee per quarter. Employers will be eligible for the ERC in 2021 if they have a 20% or greater decline in gross receipts. This is a lower bar to meet than the current 50% decline. Eligibility is determined for 2020 by comparing the 2020 gross receipts for a calendar quarter against the same calendar quarter for 2019. There is also a safe harbor allowing employers to use prior quarter gross receipts to determine eligibility. Employers can also become eligible if they were subject to a full or partial suspension of operations during the quarter due to a governmental order. For small employers (now defined as less than 500 employees, down from the previous 100 employees), wages paid to any employee during the quarter where the employer meets the gross receipts or suspension tests. By comparison, eligible wages for a large employer include only payments to employees in lieu of wages (i.e., employees not working). Business Meal Deductions For 2021 and 2022, the 50% deduction limitation on business meals is temporarily raised to 100%. Note, this provision only applies to food or beverages “provided by a restaurant” and isn’t retroactive to the 2020 tax year. FFCRA Paid Leave Credits Paid sick leave and expanded FMLA leave for which tax credits were provided in the CARES Act have been extended from their current expiration of December 2020 to March 2021. While the requirements to pay sick/FMLA leave for employers still expire on December 31st, if an employer chooses to pay benefits under these provisions, they will continue to receive a payroll tax credit through March 2021. Other Items of Note The 7.5% floor for unreimbursed medical expenses is now permanently extended, rather than increasing to a 10% floor. Through 2021, individual taxpayers can now take a $300 charitable contribution deduction ($600 for a joint return) even if they are not itemizing deductions. Cash charitable contribution deductions previously limited to 60% of AGI were raised to 100% of AGI for 2020 by the CARES Act. That provision is now extended through 2021. The Section 179D energy-efficient commercial building deduction had been made permanent. The Section 45D New Markets Tax Credit, employer credit for paid family and medical leave, and the exclusion for certain employer payments of student loans are all extended through 2025. Extension of various energy-related tax credits (generally through December 31, 2021). Payroll Protection Program We addressed many of the provisions related to PPPS loans in a separate article, Paycheck Protection Program 2: The Sequel, though there are a couple of interactions with some of the other provisions as outlined above.
Paycheck Protection Program 2: The Sequel
On Monday evening, both the House and Senate passed the CORONAVIRUS RESPONSE AND RELIEF SUPPLEMENTAL APPROPRIATIONS ACT (“The Act”) as part of the Consolidated Appropriations Act, which provides a wide array of COVID-related relief programs. Amid funding for virus distributions, multiple relief causes, an extension of unemployment benefits, and $600 per person stimulus money, the bill provides $285 billion of funding and direction for a second round of Paycheck Protection Program (PPP) Loans. These “PPP2” loans are again eligible for forgiveness, and the Act made some important changes to the program. PPP2 operates largely the same as the initial round, as created by the CARES Act, in that borrowers can get loans for 2.5 months of their 2019 payroll, and as long as the monies are spent on qualifying expenses – 60% on the payroll – the loans would be forgiven. However, there is some important difference this time around, with many of the adaptations being beneficial to borrowers: Deductibility of Expenses: While the loan forgiveness was excluded from income, the Treasury had issued guidance to show that under their view, the expenses paid with PPP proceeds were not deductible. Congress stated earlier this year that this was not their intent, and so they have included in this bill language to ensure that loan forgiveness is excluded AND expenses paid with loan proceeds are deductible. This applies to PPP1 and PPP2 loans. Maximum Loan Amount: For PPP2 loans, the maximum loan amount will be $2 million, as compared to the maximum amount of $10 million in PPP1. Extra “kicker” for Restaurants and Hospitality Businesses: Because they have been hit the hardest, borrowers in the restaurant and hospitality industries will be able to borrow (and obtain forgiveness) on a larger percentage of their 2019 payroll. The IRS classifies these industries according to the first 2 digits of their NAICS code, with those “NAICS 72 Entities” being eligible for 3.5 x monthly payroll amount. Eligibility: To be eligible for a PPP2 loan, the borrower must have 300 or fewer employees and a drop in gross receipts of 25% or more in any quarter of 2020, as compared to the same quarter of 2019. This time around, 501(c)(6) entities can be eligible for a loan, provided that they meet certain restrictions regarding lobbying activities. Expansion of Eligible Uses: The initial PPP program allowed recipients to spend loan proceeds on wages, rent, interest, and utilities. PPP2 has expanded the eligible uses to include certain supplier costs that were already under contract, modifications for COVID safety, certain “covered operations” that can include software and adaptations toward a remote workforce, and expansion of the real property to indoor/outdoor facilities. Also, borrowers can use loan proceeds to pay for repairs/restoration due to damages caused by “public disturbances” during 2020. Note: although there are newly allowed uses, the same 60% of payroll threshold still applies. Simple Forgiveness: There is to be a new, online, streamlined one-page application for forgiveness available for loans in the amount of $150,000 or less. The Act, has passed both chambers of Congress on Monday night, awaits the President’s signature, which is expected at some point this week. Selden Fox will continue to stay abreast of the Act and will post additional news as appropriate. If you have questions about the PPP or need assistance with another tax or accounting issue, Selden Fox can help. For additional information call us at 630.954.1400 or click here to contact us. We look forward to speaking with you soon.
Four Golden Rings to Re-Branding
Everyone is re-branding their business… new logos… new slogans… new business cards… the list goes on. But why are you ‘re-branding’ in the first place? The tens of thousands of dollars being spent are meaningless unless you have: 1) a firm grasp of what it really means to ‘brand’ and, 2) if the ‘rebranding’ isn’t founded on reimagining the customer experience. So, what is re-branding? You will find a plethora of definitions across the internet but the truth is, it’s like trying to wrap your hands around a loose glob of gelatin. It’s a slippery, yet submissive form changing concept. Yes, it may include new logos and marketing collaterals but the brand is an individualized fusion of varying elements based upon the specific needs of your organization. And ‘the specific needs of your organization’ must be catalyzed with how your customers conceive their experience. Here are the four golden rings you can wrap your hands around as you consider re-branding: Gold Ring #1 – Branding Who are you? Knowing who you are…and more importantly, who others think you are, plays a huge role in the success of any business. It’s the essence of branding …who… are… you? Do you know how you’re truly known in your community? What are your stakeholders saying to each other privately in their text messages? In their DM’s? How about in your sphere of influence? What do people really know about you and how your business operates? You can bet they’re saying something… but do you know what those ‘somethings’ are? It’s vital to the health and success of your business that you understand not only who you are, but what you’re actually selling. You’re not selling a product or service. If that’s what you think, your success will be forever stunted. The net result of every element of your operation is metric and is easily identified by your percentage of market share in your PMA (Primary Market Area). Read that again…more slowly if necessary. ….but we are in a recession …but our market has changed …but there was a global pandemic …but our industry had a fundamental shift …but interest rates increased …it doesn’t matter. Didn’t like that answer? Sorry, it’s the truth. Gold Ring #2 – Automate Hey folks, it’s the 21st Century! We’ve been sending people to the moon for 50 years…. half a century. Yet most leaders aren’t utilizing the available technology that tells us how long a customer has been on hold? We have automated our phones to the point it is rare to have a human answer the phone when they are calling your business… to give you money! Not to mention many organizations have team members scurrying about taking care of customers. Then….. someone at corporate raises concern because “the phones aren’t being answered in 3 rings” when a company consultant placed a mystery shopper call. Yet the same office pushes efficiency beyond realistic expectations. As leaders, we must take appropriate full advantage of all the advancements in technology available. Technology that would benefit not only your customers and other stakeholders, but which also ultimately benefit staff burnout and turnover as well as your bottom line. So where do you begin repairing and realigning your original mission? After looking at the tools you have for your team you must then consider your staff. Gold Ring #3 – Hire the fire. Fire the mire. Hire the fire…what does that mean exactly? It means you should seek out and hire the individuals who show you the fire in their spirit. Those who aren’t afraid to step up and take action when it’s called for. Fire the mire? Huh? That means don’t be afraid to get rid of the ones who are miring your organization down in ‘mire’. The ones whose laziness or negativity is keeping your firm from achieving the utmost potential. Those who foist their misery on others, like your team members and even worse, your customers. You’re a leader. Leaders take action. True leaders aren’t hesitant about using their critical thinking skills to make decisions that quickly lead to accomplishment. That means seeking out individuals who do not fit your newly envisioned culture and rapidly walking them through your entire disciplinary process. Rapidly means, fast! Once you’ve ‘fired the mire’, moving forward, you will only need to concern yourself with hiring the fire. Get that part right and you’ll have no ‘mire to fire’. Gold Ring #4 – Overlap & Overtures An important concept for you and your staff to embrace is that everyone… …is either part of the problem and/or part of the solution. From the top leadership position to the ‘janitor’ …so yes, this even includes you, the esteemed leader. Yes, sometimes you have to be detached enough to realize you are the problem. Ouch. So how do you begin? In the same way, you eat an elephant one bite at a time. You overhaul your organization one department at a time, starting from the smallest department with the greatest impact. Other tactics that advance improvements within your firm should include community involvement, as that creates ‘top of mind’ awareness. Reach out to schools, dance studios, community choirs, and theaters, anyone who can help you enhance the environment for your team members and customers. A critically important component of a totally successful, off the charts profitable firm is the leaders. Leaders have true compassion. They will take the blame in a heartbeat. They know how to say ‘I’m sorry’ and they do so. They truly value the input of their team, and beyond valuing the input, they implement in the input. Quit micro-managing your team. There’s no place for a pompous ass at the top of any successful firm, including yours. Conclusion: So, engage your gears to really explore who you are as an employee and as a company. Then you can begin the journey of identifying how your customers perceive you and how their perception aligns with your goals and vision. Only then do
National Association of Wholesalers-Distributors makes members aware of the new COVID-19 Relief Bill
The National Association of Wholesalers-Distributors made their members aware of the new legislation that can assist their members during the COVID-19 pandemic. After months of failed negotiations, the House/Senate/White House agreed on a COVID-19 relief bill late Sunday night. The legislation is awaiting President Donald J. Trump’s signature. This is a HUGE piece of legislation—more than 5,000 pages—combining the year-end government funding bill with an almost 1 trillion-dollar COVID-19 bill. But the parts of it in which NAW members and the overall business community were most interested have all been resolved surprisingly satisfactorily. Specifically: Second draw PPP loans are permitted, provided the business can demonstrate a revenue loss of at least 25%; Full deductibility of expenses paid with a PPP loan is restored; Additional expenses have been added to those that qualify for PPP loan forgiveness; The employee retention tax credit is increased and extended into 2021; The barrier between the ERTC and PPP has been removed, so a company can take both the PPP loan and claim the ERTC provided that the funds are not used for the same purpose; and For NAW member associations: 501(C)6 organizations are now eligible for PPP loans provided that not more than 15% of their gross receipts/activities are lobbying and no more than $1,000,000 spent on lobbying. The new legislation would give the Small Business Administration (SBA) only 10 days from enactment of the bill to write rules for the revamped small business rescue provisions. The short deadline reflects a sense of urgency to get help to struggling employers, but the timeline — over the holidays and in the midst of a presidential transition — raises many concerns. After the passage of the CARES Act earlier this year, there were dozens of interim rules and updates to agency FAQs that left many struggling employers confused. NAW will continue to monitor any new federal agency developments. MHEDA will send you critical updates as they occur. To read a summary of the PPP provisions, click HERE. To read the full bill, click HERE.
Expose yourself to No and Not Now to get a Yes
97% of all sales are not made on the first call. It takes five to ten exposures (follow-ups) to a prospect to make the first sale. The prospect may not actually say “no” each time, but each time you follow-up and the prospect doesn’t buy, he’s saying: “not now, buddy; do something else for me; I’m still shopping around; I haven’t met with my partner; try again later; in short, you haven’t sold me yet”. As a professional salesperson, you better have what it takes to persevere through the follow-up process and not quit. Be willing to put forth the effort to get to the last “no,” or consider taking a job in a warehouse with a salary. Here are some follow-up guidelines to ensure early closing success… Know the real reasons your prospect wants your product. Know the real reasons your prospect does not want your product. Know your prospect’s hot buttons (things you think will make the prospect buy), and work with them in constructing your follow-up plan. Present new information relative to the sale each time you call or visit. Be creative in your style and presentation manner. Be sincere about your desire to help the customer first, and earn the commission second. Be direct in your communication. Beating around the bush will only frustrate the prospect (and probably cause him to buy elsewhere). Answer all questions. Don’t patronize the prospect. Be friendly. People like to buy from friends. Use humor…Be funny. People love to laugh. Making your prospect laugh is a great way to establish common ground and rapport. When in doubt, sell the prospect for her reasons, not yours. Don’t be afraid to ask for the sale each time. If there were a formula for following up, it would be… their reasons + new information + creative + sincere + direct + friendly + humor = SALE…but there isn’t an exact formula. Every follow-up is different, and elements from the above guidelines must be chosen as called for. Here are a few lead-in lines you might try so that you don’t feel uneasy about how to start the conversation… I discovered something that I believe to be an important factor in your decision… I’m just emailed you a note from a customer who had an experience like yours… Something new has occurred that I thought you would like to know about… There has been a change in status… I was thinking about you, and called to see if you found about… Don’t say, “I called to see if you got my letter, proposal, info, or sample…”, it sounds dumb… and it gives the prospect a way out. If he doesn’t want to talk to you, he’ll say, “No, I never got it.” Where does that leave you? Nowhere. Why not try: “I sent you some (name the stuff) the other day and I wanted to go over a couple of things with you personally because they weren’t self-explanatory…” Some salespeople fear that they’re “bugging” the prospect if they call too often. If you feel that way, it’s for two reasons: You haven’t established enough rapport and have limited access. Your follow-ups are about selling and not about helping. It’s likely you won’t bug the prospect if… He’s a salesperson himself; you have something new, creative, or funny to say; you’re short and to the point; he’s genuinely interested in your product or service; he returns your calls right away; or, he likes you. It’s likely you will bug the prospect if… You call more than three times without a returned call; you ask dumb or pushy questions (probably because you didn’t listen well in the first place); you are perceived as insincere; you exert pressure too soon or too often; or, you are in any way rude to the prospect or anyone on his staff. Follow-up is another word for sale. Your ability to follow-up will determine your success in sales. Ask any professional salesperson the secret for success, he or she will answer… persistence. Jeffrey Gitomer is the author of twelve best-selling books including The Sales Bible, The Little Red Book of Selling, and The Little Gold Book of Yes! Attitude. His real-world ideas and content are also available as online courses at www.GitomerLearningAcademy.com. For information about training and seminars visit www.Gitomer.com or email Jeffrey at salesman@gitomer.com or call him at 704 333-1112.
Leveraging our most important assets
Let’s face it. We all are ready to bid goodbye to 2020. With the obvious exception of 2008-2009, this year has created the highest level of disruption not only to our economic well-being, but more notably to our personal relationships, and social equilibrium. By the time you read this, election results will hopefully be behind us. Half of the country will be celebrating while the other half mourns. The resulting fallout may be the catalyst for yet another period of disruption. Let’s hope we can all just move forward. With all of these obstacles clearly in view, how can we ensure that 2021 is a year of recovery? Health and social issues notwithstanding, if we want 2021 to represent a turning point, our businesses need to come out of the gate in January with new targets, fresh value propositions, and innovative offerings. So, how do we build new value for customers while we are still climbing out of a damaged economy ourselves? Improving customer interactions without the benefit of accumulated resources is difficult indeed. There are ways however to improve our customer interactions without spending another dime. Adding Value – Team Selling We tend to operate our customer-facing sales departments based on interactions between two people. The customer and the employee (usually a salesman) are the only ones involved in the exchange. There are times however where we might invite other participants into the conversation. This usually happens however as a result of a request or concern that requires expertise or input from another source. A second voice brought into customer interaction, however, can create a unique opportunity for you to build additional value in the eyes of the customer. As a rule, we seldom do this without a “reason”. We also tend to limit customer interactions to only salespeople (Equipment Sales, CSR, or Vendor rep). I’d like to propose that we adjust our customer contact planning and practices, to include a wider range of personnel, who can add both perspective and value to the interactions. The key here is actually providing value. We can’t just drag another employee along unless they are prepared to add something meaningful to the conversation. Team selling is powerful ONLY if the partnership addresses the customer’s objectives. CSR-Equipment Sales These two roles many times work the same field sales territory. The equipment salesperson tends to work on “projects” while the CSR works to manage the customer and his fleet on an ongoing basis. Although they are known to occasionally work together, most of their activity is performed individually. The biggest opportunity for these two to “add value” is in “mid-contract” time frames. The equipment salesman, many times has little motivation or verifiable reason to visit customers between equipment replacement cycles. Unless the customer needs additional equipment, the CSR capably handles most of all other customer issues. What would be the impact, however, if the CSR made it part of his ongoing value proposition to include the sales rep in a once or twice-yearly call, where they both performed an audit of the customers’ material handling activities? They could generate a report that might suggest process improvements, fleet rotation, allied products, or other valuable measures. This does two things. It provides a point of value to the customer that is NOT currently being offered. It also raises the personal stock value of BOTH of the field reps. I am not suggesting that they walk through every door together. I am suggesting that for customers with larger fleets (5+), this type of team partnership is one that engenders customer loyalty. The CSR is seen as part of a broader TEAM put in place to ensure customer satisfaction, and the equipment salesperson has a high-value reason for mid-cycle visits even in the absence of any known equipment needs. Management (Parts, Service, Rental) Many managers in our industry leave the selling to the field reps and focus only on operational efficiencies. If this explains your business model, I think we are missing some big opportunities. Once again, paired with a field rep, managers can add context, vision, and perspective to a customer visit. In my opinion, the service manager should personally visit the top 10% of service customers at least once annually. Accompanied by the CSR, they should arrange and execute a fleet management call and chat about the customer’s level of satisfaction on PM’s, repair calls, dispatch effectiveness, and invoicing. The same type of joint calls should be made by parts managers and rental managers on their top 10% of customers. Training department, Dispatcher, Shop Manager When we are involved in an equipment proposal, there is always a timeline that may include: Discovery of customer objectives Equipment Demonstration Proposal Creation and Presentation Waiting for a decision Getting the Decision The hardest part of the process is the fourth bullet point listed above. We have demonstrated our product; we have presented our solutions and associated costs. Now we wait while the internal conversation takes place without us. In my years spent as a commission salesman, I always hated the waiting and was always on the lookout for how I could influence the transaction during this timeframe. It never occurred to me that I could enhance my offering by continuing to schedule visits during the “waiting period”, only for the purpose of introducing high-value members of our customer-facing team. How valuable would it be for the potential customer to have some face time with our corporate trainer, our field service dispatcher, or our shop manager prior to making a decision? Properly prepared, these employees can add their experience and expertise to our offering, in order to broaden the customers perspective of why our dealership is the right choice. These employees will need to be prepared with something meaningful to say, but their input may be critical in the final analysis. Very few dealers do this. In most cases, these employees are delighted to be part of the process. The same type of value can be built when the