I Decided to Slow Our Growth

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Jennifer Karen tells sha busy and Jay goz that she finally managed to take her first real vacation since starting her business almost 20 years ago the vacation is part of a decision she made last year to regroup a bit in part by backing off on sales and marketing the goal is to give her team and herself a bit of a respit while they catch their breath and while Jennifer institutes processes that will imp improve operations of course that raises an obvious question will she be able to turn the growth back on when the time comes plus Sean and Jay explain how they've eliminated negotiation from their hiring regimens and the three owners debate who's really responsible when owners pay for a marketing plan that doesn't work is it the salesperson who pitched the plan or the owner who fell for the pitch even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report whichi magazine named the best newsletter for business owners and which you can subscribe to for free at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast are regulars Sean busy CEO of Kinesis which is based in Portland OR and works with small businesses on marketing culture and strategy Jay gos CEO of the gos group whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home and Jennifer Karen who is CEO of SB expos in events an events management business based near Baltimore the episode is titled I decided to slow our growth before we get started I want to play a snippet of an interview I did with Steve Baker who is a vice president with our sponsor at the great game of business I talked to Steve about what the great game does and what he's seeing out there as he works with businesses around the country for one thing I asked him why it's called the great game of business here's what he told [Music] me so the great game of business in a nutshell uh is an analogy that Jack Stack our founder and CEO to this day uh he came up with it 40 years ago with an idea of um hey I want to try to save some jobs as you recall in the early 80s the economy was in the tank and he was facing uh significant issues uh with a company he worked for International Harvester and instead of closing down his division uh he said well why don't we try to buy our jobs and save 119 folks uh you know that trouble and uh you know I'm I'm way under playing it here it's a great story and I'd highly recommend all the listeners uh check it out but the the bottom line is is uh what he learned from the banks was that uh if you've got a really tough situation uh and you're trying to save jobs or do anything else uh you're going to have to understand business and he didn't understand business Jack didn't he was uh great on a production line he was not great on business he was never taught that stuff so the banks 54 of them in fact turned him down for a ridiculous loan an 89 to1 debt to equity position um and he learned a couple things one is if you've got a terrible loan you need a terrible bank which is a lesson I've learned from Jack the other one is that you know you got to speak their language the problem is with both businesses is you know we are in different games than our employees and we speak different languages so he just wanted to simplify business to demystify it he used to say why does business get to be this Elite Sport for the select few that leaves everybody else in the dark and out of the money so when he went to his people and said hey I want to teach you business this is how we're going to survive what do you think great technicians say when you say I'm going to teach you business they go I don't want to become an accountant and Jack had to basically use the analogy of a game because business and games have all the same elements a team goal we have to teach around you know what game we're in teach them the rules of the game we behave differently when we keep score so we've got to follow the action and keep score and finally what's in it for me all encircling that one thing for them in the early days it was survival and then it became uh creating jobs and then creating wealth and finally sharing wealth with those who created it so we continue to use the analogy to demystify to make business approachable and invite people into the secret that has kept the halves and the have not separated for hundreds of years you can read a text version of my entire interview with Steve at 21h hats.com and now on to Today's Show welcome Sean Jay and Jennifer it's great to have you here Jennifer uh you're actually joining us from Spain where you're concluding a vacation uh I think it's the longest vacation you've taken in quite some time am I right about that yeah it's the longest vacation I've had I think since I started the company so that's I think a great sign uh I was very nervous about taking this but it's turned out great my leadership has done an amazing job I'm ready to come back I'm rested I'm relaxed I was strung out there for a while so it's been perfect absolutely perfect how long have you been gone uh I would say it's a 16 days now so I go back tomorrow and it's um I think after like N9 or 10 days uh I could have gone back it's that you know when you take a week vacation by day three or four you're already thinking about leaving the 10 to 11 days it really helped me settle right like it's helped me relax and just take the moment that I needed I had been pushing myself way too hard the especially the last four or five years and so now I'm ready I needed this vacation and I I feel rested and ready for the future you can only tell entrepreneurs well you know how you want to get back after for like normal people would look listen to and go what is she talking about but I know no I'm yeah I'm ready oh I got it I got it and I'm excited I know you talk about it like everyone thinks that way and I'm just reminding you yeah everybody doesn't yes that's true I had pushed myself so hard for so many years I lost that excitement I lost that desire to be an entrepreneur and now it's back right I got a lot of sleep I did a lot of hikes I drank some wine I had a fantastic time with my husband and so now now now I'm rested and ready and this podcast is like getting out of a submarine you got to go in decompression that's right Jay that's right you don't want to just jump right from that back into business you use podcast as the re-entry vehicle we're glad that we can help just a reminder to all the listeners out there entrepreneurs push themselves hard right we do and uh we are human and we need a break sometimes and taking that you know a half a step backwards can Propel you for the future otherwise we're all going to burn out how much uh did you keep in touch with your office I would say the first 10 days not at all not at all I made one person who was basically my second in command anything that was an emergency could go to her and she could text me she didn't at all and then we actually had an event here from a client in Barcelona the last 4 days so I stopped in to to see them uh but no issues whatsoever it's been fantastic the only thing I had to do which I got to figure out how to get off my plate is I had to run payroll twice but other than that I didn't have to work do you run the payroll because you don't want everybody there's no way you would be comfortable knowing what everyone else makes is that one of the isues yes Jay and I think this is purely I have a person now who does finances and she's like Jen you got to learn to trust somebody to do payroll it's exactly that Jay it's the last thing I'm holding on to as a CEO uh everything else I've sort of given up but that's not irrational it is a potential problem if somebody knows what you're not necessarily wrong you got to be careful who you give that to because that is information that somebody go oh I can't believe she makes more than I do I've been here longer I mean it's not that simple it really isn't that simple comp is something that is not just skill set not just experience it's what the market value is for that skill set for us how many times do you travel if you only travel 5% versus 25% right there's so many variabl with compensation and I'm just not ready to give it up yet and you're assuming that the word would spread I know and maybe it wouldn't Lauren I don't know you're not necessarily wrong listen when you when you actually grow and you have a CFO or controller that makes more money okay that's not a problem because they're making more money but when you've got someone on there who is not necessarily making more money than the other people and they might think it's It's Tricky I I don't blame you for being hesitant to give that up and it's a different culture you know people under 30 are much more likely to share their salaries than that's what I was going to say they they all may already know some of them do yes definitely under 30 they've shared it I don't know if the people between 40 and 60 if shared it with the under 30s right and giving up I don't know it's the last the last vestage of me holding on that I think in probably less than a year I'll be ready to let it go Sean did you worry about that at all was it hard for you to let that go no I that was quick yeah I mean you know 2008 was a a really big reset for my company kind of forced upon me by the you know recession and and I I made a lot of really big decisions that were made easier because I kind of had nothing to lose and so when you're in that kind of mind space I think it's liberating and so one of the things I decided to do was to remove all the low value activities from my life and also Outsource as much as possible so it helped in that we outsourced things like payroll which eliminated some of that friction back in that time um and then since then we've gone to you know open book management and I've talked it quite quite length at this you know in terms of my belief on compensation philosophy and and making it far more transparent to eliminate a lot of those hidden frictions and kind of backdoor conversations that are bad for culture so for me it's been very liberating to not be focused on that for I don't know 14 years or so but that's that's part of my just sort of ethos and mindset of you know a not wanting to work on things that are low value and B eliminating things that are potentially um Troublesome for the culture so that's just been my Approach and I know that doesn't work for every business no Sean I hear you and I'm very open book transparent about the books of the company uh you know the financial aspects of the revenue and and profit and stuff but the last vestage again I I know it's just sort of holding on to me it's controlling me rather than me controlling it MH and I think part of it which I fix but part of that because when we grew so fast we had Legacy employees that I had to figure out how to catch up to new employees with the salaries so that was hard now I fixed it I fixed it across but I need to get to one your mind set are transparency where I can justify I don't want to be like the government right like step one you get this incr whatever but to add the the compensation to a higher level of transparency and let go of it you're at the higher level plane of Consciousness that I aspire to so well I I I should caveat this that the development you're talking about took place more recently so you know we did just like you we went from Close book financials to open company financials and then the second phase was to move to a more deliberate transparent um Compensation Program that transformation happened I think starting around 2018 so it took a little while to get there too so in many ways I think you're on the same track that I was on and I will say the for me at least in my experience it was so liberating especially in the hiring process because we have absolutely eliminated negotiation as part of the hiring process I fully I fully agree with that yeah it's it's super empowering because it shifts the employees um brand experience from the hiring process is often really good and affirmational and then you give them an offer letter and then it becomes adversarial right because then they're negotiating with you because generally the market is unfair to employees and so they know they have to get as much as they can in that moment of hiring because most corporations will take advantage of that employee uh recruiters will do that and so forth and so you take a really positive experience and then it shifts to a negative experience not only for the employee but also for the employer there's no question I'm 100% with you on that and I'll tell you what just happened now that I've accepted the fact you got to put the price in the ad now no problem so you put an ad out and you say this job the price you have to put the salary in the edge salary yeah just put the salary 50 to 60 and then someone comes to you and says I've got no experience doing this but I would really like to have this job okay this is what really happened to me and we offered her 55 which she has no experience so that was a very fair and generous and good faith offer and she comes back and says gee I'd like to get 58 and we said you've admitted to us you have absolutely no experience in this job we gave you the span I'm starting to get uncomfortable maybe this isn't the right job for you because I don't want you to work for less than you think you're worth and to her credit she immediately responded and said you know what I'm really sorry I thought that was a very generous offer my mentor quote unquote told me I should ask for more money and I wasn't comfortable and I took their advice and what I learned from that I've got an easy solution to this you tell people we're going to give you an offer and I just want to tell you UPF front it's non-negotiable if it isn't work for you don't take the job and that way everyone's off the hook they don't have to feel the responsibility for trying to get more and it makes it clean and that's what we're doing and I think a lot of companies do that now just tell them up front I have a ttin a tin a tiny tweak to that um in general I'm aligned with you Jay that's been very successful for us one of the things I have to remind myself is that people are getting that advice in good faith and that they are getting that advice because 80 to 90% of the marketplace they actually should do that especially if they're women if they're people of color they've been historically disenfranchised and so they're being told you need to you need to negotiate for yourself because there's wealth inequality uh depending on your gender and race and that is real and so the piece that I've that that I've kind of changed that's a kind of nuance to what you're saying is we have a very specific framework that we use for throughout the company and we explain to the candidate we cannot uh make an exception for you if we give you an offer we will not make an exception for you because it would it would disrupt the fairness that we have created for everybody else in the organization so we give a little bit more context as to why we're not going to negotiate with them but in in premise we're doing the same no no I'm 100% with you that's a nice tweak no no that's a nice tweak to just explain why in recent episodes I've been asking everyone how their business has been doing so far this year I've already asked Jay and Shawn how's this year looking for you Jennifer uh I think good I actively TR uh slowed down Business Development last fall my sales cycle is uh 6 to 9 months and I slowed it down because we had grown too fast and I needed to take this year to solidify management solidify our processes and our handoffs and I I made a for us it was it's a healthy budget increase I think it was uh 15% and so far we're on track budget so it's I think good it's not crazy great but what we're doing is making sure that we have a firm foundation to SC up for next year and the year after so I would say good how did you slow down your growth what what was the mechanism for that I would answer proposals either deny a proposal or I would put a price that was impossible for us to turn down you know we weren't competitive or I didn't actively go out you know if someone reached out to me for initial call we might do the initial call but then it would be slower response times it's hard because you don't want to do too much because you want it to come back I don't want to turn the faucet off completely but I can't have my staff drinking from the fire hose 3 years in a row right we did it for two years and we all knew it was an incredible opportunity but I needed to slow down the fire hose so um I tried to do it where it was still a stream of water but that I I had a lever to turn it back on last fall and I've done very little marketing last fall I actively engaged a Content marketing firm to help me that's you're going to see more of it it started already in Spring and more of it throughout the summer and fall to hope that the sales you know uh the pipeline will pick back up you left the biggest part out you went to Spain for two weeks yeah I needed it Jennifer in any of those cases where you raised prices in a proposal to a point that you couldn't say no to did anybody bite that's a great question Lauren uh one person did and it was instead of being um a proposal from Like A to Z they said okay we'll just hire you for X Y and Z because we can't afford a to z so one did but they took out the scope so it lowered their price and they did a lot of the work internally and then we just did it and to be honest that sparked some ideas internally that maybe we don't have to do a to z maybe we can be just as profitable if we do X Y and Z and we could turn out more of them so we are thinking internally whether that's a possibility so one out of several I like that I like the idea of giving clients choices um you know instead of a binary yes or no you know sometimes it can create new opportunities that you um don't always anticipate that's really cool what are you thinking in terms of like specifically what what would you give up potentially give up and what would you keep yeah we try to do that Sean a lot with our customers to say we have a very intimate relationship with our clients um and there's a lot of handoffs in convention planning a lot and so there's a lot of things that we have to ask questions on scope like are you going to do that or we going to do that and we can say look if you want to save money you guys should do X and you know or a and c and we can do X Y and Z sometimes they'll say to us why don't you do ab andc and we'll do x y andz and I'm like that's not going to work because we need to do certain things or it doesn't make sense for us to be involved and that's why our our proposal process takes a long time it is a very long time to go through a scope of services uh for a fixed fee takes us a very long time yeah that's kind of been my experience as well when you shift away from like obvious product solution answer to more of a consultative sale and custom solution you have to have a lot more conversations the Sal gets longer the variability on price is higher so there's just there's just a lot of different Dynamics to it absolutely was a customer I would be impressed if somebody came and pitched me on whatever services and said listen if you like you might have some internal people that could do some of this you know lower level stuff and you could just pay us to do i' would be very impressed if they were thinking out of the box and you know giving me options we try to do that a lot our association clients these are long-term relationships and so sometimes you know it's an association we have identified that'll be a perfect fit for us for our abilities our staff our culture and maybe we need to start with just a a basic sort of handoff we help them but we just do it in a small level that makes sense for their budget makes sense for their staff and then it can grow I've seen that many many times with our clients where we pitch them they ask us for a toz we give them that but we say option two is we just do this or option three is even less than that and they've taken us up on that offer and then they come back to us a year later two years later and have us do more and more uh I'm wondering if you know you kind of have a similar Dynamic so often the things that we do will overlap with an in-house marketing person and the the issue with the in-house marketing person is the skill level is all over the map you know so yeah yes is that the same for you like abely they might have somebody who's fresh out of college to very experienced absolutely and and the time frame of how somebody works how they the nuances of how they like things an experienced person they can get things done faster but they also might understand how to work with a vendor a newer person even if they take a little longer doesn't understand an you know a vendor how to have that partnership relationship right and so yeah we definitely see that a lot Sean and those handoffs let's say there's 10 steps and we're doing steps two and three and four and then also n and 10 well once I finish my step I need you to go back and do some more or I need you to approve it or I need you to do something I'm wondering in your industry you probably interface with multiple people but is there fairly High turnover are they pretty longterm you know in terms of those front level Frontline employees that you work with um I I wouldn't say there's High turnover no okay but I'm not sure I'd also say that people have been there for a long time because it's based on the size of the association uh for us if it's a smaller Association they don't really have hardly anybody working on the convention right but that person who's ever in charge has probably been there a while where if you're a larger Association you might have a couple people that are internally and they actually might turn over more um it it's you know yeah that's similar so we work with owner operators so if there's no marketing person then that owner is often carrying that or maybe their business development person is getting a portion of that and there's a lot of institutional knowledge and then sometimes if they're larger they'll have some junior level people in there but the problem is is junior level people in a marketing role I think I saw once the average tenure is like 18 months you know it's like super super short wow marketers turn over like crazy at all levels so that's a that's sort of a hidden cost a lot of people don't understand is in the marketing sphere that marketers are impatient and want new things all the time and so they tend to hop jobs um so so it's that can be a real challenge for an owner um when we come into a face they might have somebody who's like been on the job for two months and knows nothing and very rarely is there somebody who's been there for a long time and Sean do you find that one of the issues is your staff has more institutional knowledge of your client than the in-house people do oh 100% it's awkward right and it's awkward to say well you tried that two years ago and it didn't work so are you sure you want to do this yeah what do you do if you've got someone that's in houses you're dealing with in that side and they're really either just incompetent or they don't return phone calls and emails do you hesitate to call your your your the owner and say listen Bob I hate to tell you this but yeah I hear the o i to know cuz I would totally appreciate it if somebody was honest and still listen Jay I'm not there all day long I just have to tell you so and so she doesn't get back to us on time the stuff she sent the stuff with three misspellings in it I just feel like I owe it to you to tell do you stick your neck out and do that rarely Jay for us if it's a coordinator level person who's our client no that coordinator is putting a position that needs help right and so for me I'll say to the boss like hey this coordinator is doing a great job trying trying they might need some training in XYZ but their personality is fantastic so depending on the level if it's a higher level person or like a sort of a senior manager or above that really just is not capable you got to walk a really fine line um no kid and I I would say it's probably only 10% of the time that I've ever said to their boss I might leave a few hints if we're at a reception having drinking like oh what's their plan for their career right how many drinks two drinks three drinks right right I might say oh so what what do you think going to happen to this department what's going to be with that person do you think right but um it's rarely I would get on the phone and call them and say they competent because almost my experience is ultimately the loyalty is going to go to their staff not to a vendor at least that's my experience Sean you may have something different it's really interesting the parallels um we've had really wonderful success coming into clients when they've either just recently hired a coordinator level person or we help them hire one that's another role we'll play is helping them figure out what is the right person to hire for the job so that they can get the work done and not pay a fortune for it when the real problem happens for uh usually a senior level incompetent person isn't going to hire us because a senior they're going to sabotage us even in the hiring process because what they're going to want to do is they're going to want to create sort of political power and the way you do that as a senior level incompetent marketer is you fragment your vendor um pool so that it's it's basically you're in charge of everybody and the owner has no insight into kind of how bad it really is because they never let an outside vendor gain that level of trust with an owner that's the most dysfunctional situation I've ever seen in my career and it's pretty rare but I do see it so that's the worst the second worst is when an owner really should be hiring a coordinator level person or an early career manager and then they hire somebody who claims to be sort of a mid to senior level person and then that becomes really difficult for us because they then start to kind of engage in that sort of political power Gathering and they want to separate us from the owner you know because they don't actually want they don't want the truths to be told so that's a really challenging situation that I don't see very often I'm very fortunate in that in that case that's why we've helped clients hire people but every once in a while I've seen a dynamic where an owner really doesn't know the differences at these different levels and it's really hard for them to sus out legitimacy so is this person a director level or are they a manager or are they a coordinator you know is do you find that too like people can kind of mask their skill set within your definitely space absolutely yeah and and Jay I would say for you as if you're hiring a vendor if you think I want to ask my vendor if if one of my staff members great the better question is not to make it so emotional but to say hey is my staff getting you what you need on time is my staff meeting their deadlines for you you know ask questions that you'll find the answers from yeah I'm not using I don't use any outside thing so I it's a good it's a good question it really is I mean I think jennif fire and I are often in that position of like we really want the owner to know the truth we're not sure how they will respond to truthtellah what percentage of the time do you sense the owner does want to hear it uh or doesn't want to hear it oh man I I mean I think like Jennifer you have this is probably one of the most difficult situations to be in you know when you want to have that candid conversation with an owner you just it's hard to know um because it's so hard when you have internal politics to to know where you stand in that hierarchy I think you have to build a lot of trust before you can have that conversation agreed and I think you have to I am doing a lot of work to sort of talk to my staff about client management what I always say is you have to take emotions out of the situation and you have to pinpoint just some items on it so if if one of my staff members is frustrated with something what is it don't don't put any emotion to it what is it and it usually has to do with like approvals someone's late to get something or something's late with approvals okay well let's talk about that you know is there a misunderstanding that we can't move forward unless it's approval is there we're asking for approval and we don't really need to can we go back to the client and say hey client do you really need to approve if you approve the first one or the template do you need to approve everything else can we just move forward hey client um it seems like we're taking a while with approval is how can I help move this fast or whatever taking out emotions because they are also times that I've seen my staff they don't understand all the things that are happening at least in our world that that person's also responsible for um they could be overseeing the convention but they may have 20 other tasks that we don't see and so we may not be understanding what's happening in their world so it is for anyone that does customized proposals of of sort of skilled work like this client management is one of the biggest issues and trying to diffuse like I said just putting it down into project management and understanding expectations are the two most important things at least for my side yeah I think the thing that the strategy that's worked for us and I I claim no credit for this it's my team being way better than I am is um because I I'm way too emotional about it I'm like this person's incompetent we need to get rid of them like just like you know I'm an owner it's funny I'm the exact opposite Sean I'm always like oh this person just needs clear expectations or parameters and they'll be okay yeah see this is why you're better at this stuff than me where we run into problems is like say an internal person wants to embark on a strategy that we're like that's a bad strategy like we've either seen it not work multiple times or we just know the client well enough to know it's not a good idea but they want to like die on that hill and so what the team has done really effectively is they've gone to the owner and said hey it seems like Bob really wants to do this thing let's give Bob all the tools we can for him to be successful and then we go do other stuff like that Bob is not interested in but we know we'll help the help the owner so we really separate like what Bob's doing and what we're doing and then Bob does his thing and then we just wait you know we just like wait because eventually Bob will move on or the thing will fail one of those two things will happen and and then we're not in that kind of like Battle of trying to get the owner to see that Bob is doing the wrong thing saying we just let it become self-evident and that's that's been affect it's not how I would rather say to the owner we had a mish hire with Bob you need to get rid of Bob but it's hard to have that relationship that's uh that takes time okay I want to ask the opposite question now have you had a customer call you and say Sean I feel bad saying this and you know Jim's a nice kid and everything but I don't think he knows what he's doing have you had people give you honest feedback that has been helpful about our team or about their about their team yeah about your no about your about somebody that works for you oh I've never let a client Down Jay I mean in 24 years of course yeah of course I've had those I'm on the other side of that and I've had some really bad experiences with complete incompetence and I've had to tell the company and and frankly it was an accounting firm they don't really do anything they don't really want to hear it I find yeah so so we had some of that problem and it would be like I call it kind of like the left hook we're like whoa we just got fired what happened right and this is some years ago so we realized that we needed to actually build a process to offset that problem and so the process we built starts in the sales delivery where we say this is what's going to happen here's who you're going to be working with and also here's your system of finding resolution when there's a struggle so the system is you go to the person you're working with directly you're honest and candid with with them you tell them what the problem is if they aren't listening or they're not fixing it now you go to our director of strategy and have that conversation and if for some reason you can't resolve that here's my cell phone we'll have a conversation so we set the framework there and then we also build a backend system so we put into into new engagement a calendar of client check-ins from people who are not working on the account so you know six months in you know Andrea will call up the client and say hey client let's go to lunch they have a lovely lunch they get really candid hey we really want your feedback we want to know how things are going good bad and other and then uh we do that again at a year and then then you know so we just keep that flow going so that we don't get the left hook and it's been amazing what that has done for client retention we haven't had a left hook in years no I tell you very impressive I'm not amazed that works no that's smart because that's the way it works Sean that's what I do a lot of and I I'm trying to figure out a process because right now there's not a process in it I just check in with clients and then I'll go to their meeting tell me what's going right okay what's what's what's a pain point for you what are we doing maybe not at the B minus level or the C Level that you want to see at the a level tell me what's going on to have an honest conversation but it's not processed enough I need to get to that system now um and like that's another reason we slow down growth is because I need to put some of those systemic issues in play because I can't I now can't keep track of all the clients I can't keep track of all what's going on and so you need to have put those systems in place so it's good you say that because I I that's definitely my my bucket list not bucket list my checklist to do in the next year six months we're running short of time and there are a couple of things I want to hit before we go you told us recently Sean about your experience at a big trade show in Chicago I think you expressed a little bit of frustration although it was a positive experience for you I'd love to have you bounce that off both Jennifer it's her industry and Jay who's a big proponent of trade shows can you tell us quickly what your experience was in Chicago sure yeah I mean it was a a huge show I mean I mean maybe there's bigger shows but it was huge there were I think 800 um you know folks who had rented booths it was an automation show you know there were the booths that probably Sean yeah was this the automate show yeah yeah yeah you know that show I was there what do you run that show is is that your is that your jam no no but I was checking it out oh my gosh that's so funny Jennifer do we go to dinner while you were in Chicago I don't remember well the funny part is they have a student day and I flew my son in because he's a mechatronics major and they had a student day and to go around and meet exhibitors that are hiring how funny all right Sean I can't wait to hear the issue go ahead I wouldn't say it's an issue it was just a more of like my observation that it's a kind of halves and Hales not have not um environment so there are very very big large players there's some midsize people that I recognize from my hometown and then there's a lot of little booths you know and it just made me realize that if you are a small business and let's say you can only afford $10,000 to go display man you better go in with with a game plan and if you just show up and have your little booth with your card table and your objects on the table um it's going to be an expensive adventure and then the you know the inverse of that it was what I watched my client do which was freaking genius um he's actually building an associate you'll appreciate this he's a private company who's building a a uh Association they had like a happy hour he gave a talk you know it's a pay to play too right so you had to pay for the talk you had to pay for the booth but it's a it was really interesting watching that work so effectively and create community and I think that was a really great place to be for him because there's so many people there and a lot of people looking for a home like looking for their people so to speak and so I'm just contrasting you know he's a small business you know less than probably less than 10 million and there were other small businesses less than 10 million and like what a what a contrast to see like good Str strategy planning ahead of time pre-marketing postmarketing content thought leadership versus I show up I have a card table and I put my stuff on the table and so that that was basically my in insight for small businesses it's like this is this is a world of big big freaking white sharks as someone who was going to hundreds of trade shows I can tell you these people that go to the trade shows and don't put time and energy into doing a good-look booth with something that says something when you walk by and then what are they doing in the booth they're either sitting on their cell phone or they're eating lunch and it's just really easy to walk by people when they're eating lunch and not bother to go hey what do you do so I'm always amazed that they spend all this money and you can't even tell what they do for a living and this all the time like you know it takes some it takes some real expertise to do a booth that got one thing on it that when you walk by you go oh you do blankety blank and then have a person stand there saying hey can I talk to about what we do instead of eating launch trade show is is one aspect of a marketing campaign right and I would say the same thing to someone who let's say wants to do print advertising or social media advertising or using influencers or social media is you have to think of the strategy first before you just start throwing things against the wall right so if you're going to invest in a trade show really figure out what your goals are and plan it and I think what happens is um no one would think to just or maybe they do I guess to start a huge marketing campaign of print and digital advertising and not think about it right not think about where who the right people are to see this what the messaging would be how much the budget's going to be what's the follow-up going to be what's the call to action going to be and yet sometimes trade shows get a bad rep because people think well you can just put out a table and people will come and that's not the same you need to have the same strategic thinking about your trade show the way you do it with other marketing campaigns and with trade shows sometimes the the goal might be lead generation fantastic but that's just one possible goal for a company another one could just be that they need to show their presence there um to current clients to show that they're a player now right that they're not too small they can afford to be there and they're a player another one is they just taking exhibit Booth because they want to speak and maybe the the trade show won't allow them to speak unless they have a booth and so their whole point is thought leadership to get out there there's lots of companies that do booths because they hope to get purchased by larger companies and so they need to have a booth there and they walk the trade show to find the big fish to buy them right um there's many different reasons oh here's another one important you get reps you want to get some new reps and the reps are all to trade you absolutely Workforce Development absolutely abely and and if you don't have a trade show boot there you're not getting the better rep so like it's been a huge piece of the puzzle for us I've got 17 independent reps around the country selling to frame shops and I've got the best reps in the industry and you got to have a trade show boot that they want to come visit and see some customers at yeah they you're 100% right it's way even more complicated than putting an ad in a trade publication or anywhere it to your point there's lots of pieces to this puzzle that I don't think they're thinking out before they get there okay so this is is a great a wonderful Insight you just share with me and I think about my experience years ago when I was at an ad agency and these poor small businesses would one of these like TV reps or newspaper reps or Yellow Pages reps were paid on commission they'd get their hooks into this small business and make this compelling argument for how they should have an ad in their publication and it was probably the worst thing that that small business could spend their money on but they didn't really know any better and so they would drop $10,000 or $5,000 on this ad nothing would happen because they actually need a different Channel or more repeats or better message or all manner of problems they Dro their money it wouldn't work and then they'd be like you know blah blah blah doesn't work and it's was like well actually it starts with this rep being motivated to sell on commission and not have your best interest in at heart and I'm curious do you think that also exists in the trade show world like are these trade shows selling small businesses who don't know what they're doing to me it doesn't start with the sales rep on commission it starts with the owner who should take a moment and say what should I be doing for marketing right that to me is we're all responsible for our businesses and okay so maybe they did the Yellow Pages for a couple years eventually that person figured out I hopefully that that was isn't working but they should have taken a moment before they were because anybody out there can sell anything for marketing you as the owner need to take responsibility and think what is my strategy here there's plenty of books plenty of podcasts you know that you can learn some basic marketing strategy or there's Consultants out there who can help you and you say Okay I want to Target this client demographic I I here's my sales cycle here's and think through it and and at the end of the strategy say Okay trade shows is the best or not even make sense like if I'm a I'm a local ice cream shop Tik Tok might be the best way for me to get my message across trade shows not so much right whereas if I'm um an automation company probably Tik tok's not the best maybe I don't know but uh the trade show might be better so I think it starts with the responsibility of the company owner with strategy it has nothing to do with how advertising sales are commissional or not because it doesn't matter it's your responsibility as an owner to figure out I what I was saying is there are a lot more Consultants out there for advertising than there are for trade shows and that's an issue to me yeah I mean that's that's the issue so it's essentially the whole I think it's like the Warren Buffett quote right I should I should never ask my barber if I need a haircut and so like essentially so this is my this is my thing that I I try to communicate to business owners I agree with you uh Jen that it it is their responsibility but I think a lot of times they don't know who they should be talking to and so the media rep from the Yellow Pages will come with all this information about how this is the right thing but it's a biased perspective it's probably the same for trade shows right they shouldn't necessarily be talking to the trade show exclusively in terms of whether they should do the trade show or not they need to find other sources of truth right Sean we just like the the Yellow Pages ad rep or a trade show sales rep we're not the marketing consultant for that company right our goal see a lot of businesses think that is that a lot of businesses use those vendors that oh absolutely why would they think that why would they ever tell you why you're both right I'm going to explain to you why most retailers don't have a clue where do they ever IED it's exactly what what Sean just said whoever called on him that's where they adverti and I never I always think wow I wonder if I should be doing it over here or doing there most retailers or a lot of businesses the salesperson calls on and I would tweak Sean what you said just a little bit it's not that the commission's the problem the problem is they have no expertise they couldn't help you if they wanted to they're just selling that's not the job is a marketing consultant if you are unsure as an owner of where to spend your dollars or where to Market your services or products then you should get a consultant to help you on strategy yeah and I'm yeah I'm telling you the problem it's in the name of this podcast 21 hats the problem is the other 20 hats are more screaming in their face we've got to get more Insurance the delivery van broke down the customers made the marketing piece gets pushed all the way to the back of the of the line and they're and they get attention when the sales shows up and you're you're totally right should be spending big issue to me is so many and I see this a lot is small business owners confuse marketing and sales they think that they can leap frog over marketing and jump into just selling and that's why trade shows sometimes they think they can just sell at a trade show and I'm like you got to take three steps back three steps back four steps back and say marketing goes first sales is a tactical maneuver that supports the marketing strategy do not jump into sales tell me what the marketing strategy is first and go forward and I'm sorry but that's not the responsibility of the salesperson whether it's the ad sales media sales or or trade shows here's another problem and you you know so you're highlighting why this happens I've seen this a ton is a owner hires somebody who's a well call them a VP of Business Development or VP of marketing and sales which is almost always means there salesperson yes and so what happens is is that salesperson will come to the and be like hey I think we should totally go to XYZ trade show and the business owner is like well you're my VP of Business Development and then they spend a bunch of money I've seen this happen this is like a broken record they spend a ton of money they go to the trade show they come back nothing happens and they're wondering why does it happen it's because they go to the trade show thinking that like sales will magically happen because they have a booth there and then eventually salesperson gets fired I would say for a small business owner if they are not 1,000% sure who their potential customers or clients are the the demographics of that how they're going to sell it and where they're going to sell it then they should not be hiring a Director of Business Development they should be hiring a marketing strategist to figure that out first and then they can do the sales and execute on it I have a different Theory most companies are not big enough enough to pay a competent business what is someone who's really smart cost it's a it's a well into the six figure thing my argument is like it or not the owner probably needs to be the chief marketing officer because I don't think they can afford if if they're in business and they can't figure out who their customers are really they need to go hire a business development person to do it the reality is most companies are not big enough to afford a business development person making you tell me Sean how much is that person cost 250 right you think most companies owners aren't making two the owner might be making $200,000 a year that's the reality of business most companies aren't big enough to do that here's what I would say is when you start a business you have a product or service that you're selling and if you're still an owner after a couple years that means you found somebody to buy your product or service right I think the issue comes into when they want to grow so let's say 0o to couple hundred thousand right they they found enough people to buy it it's then when they want to grow they need to take a moment and not just push on the gas on sales but to take a moment say am do I understand my marketing strategy and if I don't I need to hire a strategist to help me figure out to get to two million let's say right because I think what happens is I think that the first couple hundred thousand maybe up to half a million in Revenue they think they know it and if they do great but if they don't then they rely way too much on sales and not marketing you're right the problem is in the real world the typical person that's doing a million and a half dollars making a nice living doing two million does not have the resources to and or wouldn't know how to find that person I'm going to say in the real world what usually happens is the owner needs to lead that because it's expensive it I don't know that a million and a half dollar business can afford to go find that person they can afford a marketing strategist can absolutely afford a marketing Str how much is a marketing Str they can only Outsource it yeah not not as a role they should not hire that role right what does that cost I mean you could Outsource it for I don't know 20,000 120,000 I mean anywhere in between depending on what's being done yeah I mean it it it it varies widely but you could get some great advice you know for 20 grand all right and and that would be like things like customer segmentation offering pricing you know like that would be a start they're not going to like do the work it's going to be more of a like assessment and validation and then that's why I have this big range of 20 to 100 you know once you start to get into like we need them to do work right we need them to develop the brand they need them to create assets we need to create you know a thought Leadership Model like now you're getting the more expensive stuff but you're combining lots of different roles too so you should not hire it in-house to me I agree with Sean it's not a full-time employee at this point you just need to wear to direct your resources yeah that's fine it's a Theory you're totally right in theory and I'm sure in a lot of cases that works but most entrepreneurs in the growing stage are too small to spend that kind of money so need to read some marketing books right absolutely and yeah yes no I fully agree yes sometimes you just have to learn it yourself I mean that's why I wrote the book you know marketing From the Inside Out is basically I saw a problem for the subm million dooll businesses to Jay's point it was really hard for them to hire us to do the level of work that we need to do to move the needle so I just like put it all in a book I'm like here you go it'll be hard but you can DIY it here's all of our proprietary stuff so when I meet those business I just give them the book and you know maybe one day they'll come back and you know be $3 million or $5 million and then like do it at the level that we're working at um but but there is some truth in that uh that Chasm from like 200,000 to a million or 2 million is really really hard yeah often you don't have enough Mar you haven't charged enough you haven't learned that you're undercharging you know to one of Jay's favorite themes and so it's you're kind of stuck I don't disagree I just think overall at that level too many company owners are thinking sales will solve the issue sales ex execution yes and I want to say to them sales goes second marketing goes first you're not wrong you're not wrong at all I'm just suggesting in the real world I've got PTSD from I think of the people I've hired over the years one bigger disaster than the other I think what that Sparks for me as a thought and also what sparks me what you said Jennifer is the skills that owners need to develop in these early stages are one an appreciation and value for marketing positioning and customer and then two discernment the ability to find people who can help them who are going to really move the needle forward and that's super hard you know to your point Jay you know you wasted a bunch of money on these hacks right that's discernment and as you get more experience you get better at that absolutely but I think that's where you know listening to shows like this is really helpful or you know getting mentors if you're if you're in that early stage getting folks who you can kind of shortcut to discernment skills because I've hired terrible people too we've all hired terrible people my thanks to Shan busy Jay go and Jennifer Karen and to our sponsor the great game of business which helps businesses use an open book management system to build healthier companies you can learn more at Great game.com thanks everybody wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's L ren at21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess Theron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]