Volume 35, Number 10, October 2000

Lawrence Logic

Are We Training Our Future Competitors?

the employee deficit continues

by Bob Lawrence

 

What motivates really sharp individuals who’ve been employed in our industry for years to quit and start up another glass company, or to simply move on? Could the answer be that quality employees feel their dreams will not materialize if they stay where they are? Why is it that the float glass manufacturers are the only ones consistently able to attract quality recruits? Do the next levels of the glass industry not offer the pay and benefits of float manufacturers and other trades?

It wasn’t too long ago that our economy was in the dumper. Selling jobs became survival, profits deteriorated and a lot of good people lost their jobs. Without other skills, many elected to open their own glass shops. This created a glut of new shops that chased and devalued what business there was.

Times have changed. The vastly improved economy has matured enough to finally absorb the over-capacity. Now everyone is talking about needing experienced people, with none to be found. So why is the glass industry having a more difficult time than other industries recruiting qualified employees? Probably because it never fully recovered the profit margins of pre-dump times, and is not in a position to make competitive offers to sharp individuals.

 

We’re at the Crossroads

Industry leaders all agree that there is a desperate need to improve the return on investment. We’ve seen reports of record earnings recently, but comparing numerous years of weak performances with profits buoyed by today’s high volumes makes for true, but pitiful, record profits. Costs are going up faster than can be passed on. In many markets, the typical glass shop owner cannot be satisfied with the pay and profit earned in exchange for all the risk, all the hours, sweat and money invested and the shortage of people to get it done.

So, what are we up against? To solve the personnel shortage problem, the industry has to address: 1) quality benefits necessary to recruit and retain quality employees; 2) better sales margins to pay for this; and 3) emphasis on a more effective, professional marketing effort to establish and sustain any gains.

 

A War

If you were to take a vacation for a few weeks, or a couple of months due to health reasons, are key people in place who can effectively make decisions and keep your shop open? Will these employees eventually leave because there isn’t enough profit to offer security and benefits beyond the owner’s interests? What about the needs of key personnel who are just as ambitious as any business owner?

The glass industry needs to regard this as a war for refreshing our troops with quality employees. One of the most important factors in recruiting and keeping good people is benefits. An excellent program typically would include the following: quality health insurance (fully-covered employee with increasing dependent coverage subsidies for years of service), paid compensation for vacations, sick days, holidays and a 401-K retirement plan with a percentage of matching funds paid by the company. Additionally, profit-sharing makes an employee feel he has a vested interest in the company’s success. These are the benefits the new young guns are offered to go to work in other industries. Are you shocked? Are you thinking: how can we pay for this; how can we help ourselves?

A few good glass fabricators and installation shops already provide these benefits, evidenced by the really good people they’ve been able to recruit. Owners and managers who’ve embraced this line of thinking also have learned that quality people are much more productive and efficient, helping to offset benefit costs necessary to employe them—without jeopardizing the bottom line.

 

The Clown

Let’s first identify the culprit who is in a position to undermine any positive changes—if we let him. There are a few businesses, with whom we all compete, that have a very different operational mindset; they want and do everything cheap. Because they sell cheap, they are forced to provide the cheapest product with not-so-dependable service. They will scratch and claw with customers, vendors and employees to steal a profit, and they are never going to change. Quite frankly, many of these cheap sellers are ethically-challenged. A glass company that is building a reputation for integrity, service, quality, excellent employees and community support cannot compete with this cheap mindset competitor, whom we will refer to hereon as The Clown.

 

Selling

Customers have multiple personalities consistent with those of us in the glass business. Let’s first consider the cheap customer. No one ever makes a decent profit on really cheap customers, so forget trying to get a premium. Let The Clown have this customer—they deserve each other.

Because it’s busy, consider turning your sales efforts to responsible customers who will appreciate a professional installation of quality products. A responsible customer really wants products and services done right. On occasion, however, you will still encounter The Clown on a potential job. Worse still, the responsible customer may be clueless he’s getting a quote from someone he may later wish he’d never met. A responsible customer doesn’t want to do business with an ethically-challenged cheap vendor who is not dependable. Responsible customers often need to be reminded that quality vendors, in order to perform to a satisfactory standard of service and quality, will need a reasonable price, too. This is where effective sales representation means selling the company, as well as the product.

I Have More to Offer

In efforts to differentiate your company from all others, be specific about exactly what you are providing, including benefits and quality. Also, share information about the tricks you’ve learned and integrated in your jobs (such as keeping installations from leaking); make recommendations for substituting something that would make a better installation or operation; and, enlighten them on the new generation of high-performance products (such as sealants, glass, metal, etc).

A portfolio of jobs and letters of recommendation from previous customers, vendors, banks, etc., is probably the single most ignored advantage a quality company could use in its promotion efforts. The portfolio, including photographs, is important in earning a customer’s confidence and moving to the next level of quality sales.

 

The Close

Once the quotation process is complete, you may face the fact that you are not the low bidder. But the customer is talking to you because you’ve gained his confidence. Be aware that this customer really wants you to do the job. However, there still is the matter of The Clown’s price. You should also know that your customer has changed his or her focus to finding out the best price you are willing to offer.

What are your options? Your price is fair, and with the available manpower, you’re busy, so why let The Clown determine where your margin needs to be? This is where you need to earn your pay. Confirm the merits of what you are offering and be willing to say NO—and mean it. (This is the hardest lesson to learn for people in sales. Those that do learn this lesson often see their companies move on to a more successful future.) Now the customer knows the best price you are willing to offer.

To earn this premium, serious effort must be put into closing the sale. Customers who are willing to pay more need justification for the price you are asking them to pay. They are looking for reassurance that quality products and installation, quick response with warranties and service-after-the-sale are what you’re providing at a reasonable price. Without these assurances, paying a premium would make them feel like idiots. They want to be sold.

These concerns may be reminiscent of thoughts you’ve had about your business. If you have no immediate plans of implementing change because you’re still waiting for the competitor down the street to make the first move, you may very well be employing and training a future competitor! The alternative solution is to focus on building a quality organization with whatever plan you feel will work.

With good benefits, decent pay and profit, you can recruit good people. For your professional representation and a satisfactory installation, customers are more likely to repeat, and the next sale will be a lot easier.

With a quality program, quality employees will stick around—and you can start enjoying your vacations!

See you on down the fairway!

Bob Lawrence serves as president of Glass Wholesalers Inc. in Houston. His column appears quarterly.


USG

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