Ten Stupid Things You Have Seen (or Done)!
by Stephen Lett
Over the years, we have all done dumb or stupid things which I’m sure didn’t seem so at the time. I can certainly look back over my 33 year career as a cataloger and think of things I did that were really dumb! To a large degree, this is all part of the learning experience. I know it has been for me. This month, we are taking slightly different approach writing from the front-line. At the suggestion of my friend and client, Shep Moyle, President and CEO of Stumps, I have put together a list of the 10 stupid things you have probably seen (or done) over the years. By writing about these “dumb” things hopefully you can avoid making the same mistakes others of us have made. Here is my list of the ten most stupid things I have seen or done over the years!
- Hiring (or Firing) the Wrong Person or Not Hiring at All – An example of this is, successful catalog companies have strong financial controls and disciplines and perhaps you didn’t hire a Controller or strong financial person when you should have. This is a common mistake. Well run companies with strong financial orientation issues have financial statements by the fifth to tenth day following month end (or certainly on a timely basis). They prepare cash flow statements. They obtain bids, issue purchase orders, approve invoices, etc. A common mistake catalog owners/Presidents make is not hiring a strong finance person to work as partner with them. Often times, the need for a financial person is not recognized.
Or, perhaps you should have hired a person with catalog experience rather than promoting from within – Too many times, catalogers think they can save time and money by promoting a person internally (without prior catalog experience) rather than going outside for the “best” and most experienced person. Promoting from within is certainly a good thing to do as long as you are not making a compromise just to fill a position quickly and to save a few bucks. It is always best to fill key positions with the best people you can find even if it means spending money to hire a professional recruiter and paying a few more bucks for proven experience. Don’t just promote or hire to fill a slot. Wait on the best person you can find for the job.
Not firing people soon enough is also a common mistake. Generally the employee knows the job is not right for them. You know it too. But you wait too long to do something about it. Do the employee and yourself a favor by asking them to move on. You don’t have to burn bridges. Just face it. You cannot wish a misplaced manager into success. Take action now!
- Tried to Grow Too Fast – This is a common mistake for sure. Trying to grow too fast generally results in mailing too many catalogs which can lead to financial ruin. Trying to grow too fast can also put stress on operations which can do your company and customers a disservice. Balance growth within your ability to service the last customer you serve as well as the first one.
- Didn’t Solicit Professional Legal Advise Soon Enough – It has been proven many times that it is less expensive to invest in solid, legal advise in order to avoid a problem. No one likes to pay $400 per hour for legal advice. When legal questions arise, it can be much less expensive in the long run to obtain an opinion from a lawyer before the matter ends up in court. Legal action of just about any kind will result in thousands of dollars of expense. Invest in great advice upfront. It will be cheaper in the end.
- Put the Top Line Ahead of the Bottom Line – We tend to want to put the top line, i.e., sales, ahead of profits on the bottom line. Your house file is up and so are your sales therefore everything must be okay... not necessarily! The fundamental measurement of success of any catalog company is their cash flow and bottom line profitability. This is what creates shareholder value. Trying to grow your way into profitability requires very deep pockets!
- Tried to Get by Without Hiring a Consultant – Use top-notice consultants when you can. They can generally save you money in the long run. Find the right “fit” and make certain there is a payback on the investment. Avoid those consultants who have conflicts in their advice and the services they provide. Find the experts in the field who can help take your company to the next level whether it is circulation, merchandising, creative or operations you need. Consultants can be the rocket fuel to help take your business to the next level if you find the right one. Look for a good personality match. This will be important in building a sense of trust and confidence in the relationship.
- Not Paying Attention to the Details – As your business becomes more successful, there is a tendency to pay less attention to the details. This too is a mistake. You will tend to focus on the “bigger” issues while leaving details like RPC (revenue per catalog), 12-month buyer counts, etc., to others. Be sure to pay attention to even the smallest detail.
- Failed to Obtain Competitive Print/Paper Bids – Thousands of dollars can be saved by obtaining competitive paper and printing bids. Yet, too many times, catalogers are complacent and tend to remain with their current printer. Over the years, I have seen a certain comfort level and resistant to changing printers. There are a lot of good printers in our business. Market conditions change, however. Do the right thing and obtain print/paper bids at least annually in order to be certain you are paying a competitive price. Be prepared to switch printers for any variance 5% or greater. Only obtain competitive bids from catalog printers you would seriously consider going with. Don’t obtain prices from other printers unless you are prepared to make a change. Printers will begin to realize that the only reason you are requesting a print bid is to get your current printer to lower theirs. This is never a good thing to do! It is not good to jump from one printer to another and then to yet another just for a lower price. However, when you are spending up to 30% of sales on direct selling expenses, the dollars involved should not be ignored.
- Lack of Focus; Pursued Too Many Things at Once – Focus is the key. Don’t try too many different things. I know a catalog company who feels growth will come from having multiple catalog titles. While this is often true, it is best to focus on those catalog titles that will yield the greatest return. Maximize your existing titles before starting new ones. It is always best to put your valuable labor resources and precious dollars in what works before you try other things. Don’t spread yourself too thin!
- Tried to Develop Your Own Operating Software Instead of Purchasing a Mail Order Software Package – There are several good mail order software packages on the market today. Large and small catalog companies can benefit greatly by purchasing a package as opposed to developing their own operating software. Every time I have seen a catalog company attempt to develop their own software, they end up spending more and getting less.
- Not Being Realistic About Growth – I once had a client, a seasonal food mailer, who wanted to grow to $50 million in annual revenue. They expected to accomplish this growth with a limited number of SKU’s (Stock Keeping Units). Their prospecting universe was simply not that large and at best, they were a solid $5.0 to $6.0 million dollar business. Profitable too. Just not very realistic to think they could achieve this amount of growth from their core business. Be sure you know your true potential. Expect a lot but be realistic. The market, your market, is only so large and just about every business has their limitations.
Perhaps you can think of other “dumb” things you or others have done? Maybe some of dumb things you have done will duplicate my list. I probably could have listed more dumb things I have done over the years. The point is we have all done dumb or stupid things! It’s okay. We learn. We move on. It is all part of growing and building a successful catalog business!