Have You Tried Answering Your Customers’ Questions?
Have You Tried Answering Your Customers’ Questions?
When Marcus Sheridan’s pool-building business was in freefall, he decided to try a daring strategy he’d been taught to avoid. It saved the business and changed his life.
Good morning!
Here are today’s highlights:
The first lesson of the pandemic: There will always be a next time.
Ecommerce warehouses are transforming neighborhoods and landscapes.
Unprecedented delays in approving work-permit renewals are routinely leaving immigrants in limbo.
Even in Houston, office floors are barely half full. Has the remote hybrid future arrived?
Bring your own marketing questions for Marcus Sheridan.
THE 21 HATS CONVERSATION
About 10 years ago, I attended a breakout session that remains one of the most memorable presentations I’ve ever seen: The speaker was the owner of a pool-building business, Marcus Sheridan, who had thought he was going to lose the business during the Great Recession—until he tried some unconventional marketing tactics. He started writing blog posts in which he dared to answer the questions that his customers always asked but that he’d been taught to avoid, questions about pricing, about the disadvantages of the fiberglass pools he built, and even about the strengths of other pool builders in the area. Those posts—even though he didn’t tweet them, Facebook them, or Instagram them—generated enough traffic, credibility, and ultimately orders to save the pool business. (In 2013, I assigned an interview with Marcus for The New York Times.)
Marcus went on to write a book, to launch a second career in marketing, and to become an in-demand keynote speaker.
On Tuesday, March 22, at 3 ET, he’ll join me for a 21 Hats webinar conversation. Bring your own questions!
THE ECONOMY
One of the biggest drivers of inflation slowed dramatically in February: “The Producer Price Index rose 0.8 percent last month, the Bureau of Labor Statistics announced Tuesday. That came in below the median forecast for a 0.9 percent gain from economists surveyed by Bloomberg. It also showed the month-over-month pace slowing significantly from January's 1.2 percent uptick. PPI rose 10 percent on a year-over-year basis, edging just slightly higher from the January print.”
“The index tracks a collection of businesses' input costs ranging from raw materials to equipment.”
“That makes it a closely watched forward indicator of broad inflation, as higher input costs are typically passed on to consumers through higher selling prices.”
And while the February print still shows PPI at a historically elevated level, the smaller monthly gain hints companies could soon face less pressure from higher costs.” READ MORE
Despite higher fares, airlines say people are ready to fly: “Fuel is typically airlines’ second-biggest expense after labor, accounting for around 20 percent of their costs. That can jump to 30 percent or more when prices surge, according to government figures. With a few exceptions, most major U.S. airlines no longer use futures contracts and other financial instruments to hedge against price swings, and buy fuel just a few weeks in advance. To cover fuel price increases, airlines typically try to boost fares and cut less profitable flying, which results in fewer flights and in turn, higher prices for travelers. Some industry analysts have questioned whether those moves will work this time around, with price-sensitive leisure travelers accounting for the lion’s share of fliers now, and amid a rebound that remains fragile and prone to sudden reversals.”
“But airline executives said Tuesday they are confident that the playbook still works. Travelers are willing to pay higher fares, executives said, allowing carriers to raise fares to account for higher oil costs without undermining demand.”
“‘We can make money at oil prices of $100 a barrel or higher, and we will,’ American Airlines Group Chief Executive Doug Parker said.” READ MORE
OFFICE SPACE
What does it mean that even in Houston, where most companies are back in the office, the floors are barely half full? “Houston has set the standard for bringing workers back to the office during Covid-19. About 85 percent of its businesses have employees at their desks or have plans to do so, one of the highest rates in the nation, according to firms that track the return-to-office trend. But Houston office floors are barely half full. While the number of workers showing up at their desks has been steadily rising, the office crowds are far smaller than those showing up at restaurants, basketball games and other traditional gathering spots.”
“A big reason is that most Houston companies have implemented hybrid strategies, combining office and remote work. “
“As this policy has played out, the average worker is showing up at the office about 10.7 days a month, compared with 17 before the pandemic, according to an analysis from Central Houston Inc. ...”
“‘It’s hard to imagine, when you look at office workers who can do their jobs remotely, that those numbers are going to get above 60 percent to 65 percent nationwide,’ said Brian Kropp, chief of human-resources research for advisory and research firm Gartner. ‘This is just the remote hybrid future. We have kind of arrived.’” READ MORE
HUMAN RESOURCES
Unprecedented delays in approving work-permit renewals are routinely leaving immigrants in limbo: “The government doesn’t keep statistics on how many people have had their permits expire while waiting for a renewal, but officials estimate that, at its worst in January and February, hundreds per day were losing permission to work. Work permits, which generally last for two years, are automatically extended for 180 days once holders have applied for a renewal. That safeguard, put in place in 2017—at a time when it took an average of five months to process work permits—was supposed to avoid exactly this sort of problem. But it’s often now insufficient.”
“The lucky ones ... are placed on unpaid leave, losing their income and also their driver’s license.”
“The less fortunate ones are fired and must resort to working off the books to make ends meet.”
“The people most affected by the work-permit cliff are immigrants waiting for decisions on their applications for asylum or green cards—for which there are also long delays.” READ MORE
MANAGEMENT
Friend of 21 Hats Harry Elston has written an after action report of how his consulting firm has survived the pandemic: “Twenty-four-plus months into ‘two weeks to flatten the curve,’ and it certainly looks as if there’s light at the end of the Covid-19 pandemic tunnel. Professional and leisure travel is opening up. Business is getting back to a level of normalcy that we haven’t seen in two years. It’s time for an after action report on the small business lessons learned for Midwest Chemical Safety.”
“This is the first lesson learned: There will always be a next time.”
“Preparation is the key. There will always be some kind of downturn in your business and knowing that you have dry powder on hand (i.e. cash reserves) will greatly reduce anxiety. MCS’s rule: two years of operating expenses in the bank.”
“Use down time wisely: Update company organizational process assets. Find ways to use this time to create and brainstorm new projects.”
“Keep your mental and physical health high on the to-do-list. This, by far, is the most important lesson learned during the pandemic. Connect with colleagues, even if done virtually.” READ MORE
ECOMMERCE
Shopify is exploring ways to help merchants into the metaverse: “Shopify may be an early innovator in the developing space of Web3 and the metaverse, even as debate continues over the role that these emerging technologies may play in commerce. Shopify's most decisive Web3 move yet was its late 2021 beta launch of an NFT program. But it's also growing its dedicated blockchain team and exploring more uses for augmented and virtual reality, signaling a strong interest in how these technologies can be used to help merchants.”
“It may be too early to know how big of a factor non-fungible tokens, the blockchain, VR, and the metaverse may be in the future of e-commerce.”
“But analysts say that Shopify needs to be wherever merchants are, even if analysts are skeptical about the revenue potential these emerging technologies offer the company in the short term.”
“Shopify's new NFT beta program allows merchants to mint and sell their own NFTs using blockchains such as ethereum, polygon, near, and flow. Unlike many other NFT marketplaces, merchants don't need to accept cryptocurrency as payment.” READ MORE
COMMERCIAL REAL ESTATE
Ecommerce warehouses are transforming the landscape: “Every day, more than 2.4 million packages are delivered just in New York City, an online-buying mecca in a region of 20.1 million people. The feverish activity has already transformed the landscape of city neighborhoods and rural towns, transforming Red Hook in Brooklyn into a bustling logistics hub and replacing farmland in southern New Jersey with sprawling warehouses where packages are sorted, packed and delivered, often within hours of being ordered. Just 1.6 percent of all warehouses in New York City and only 1.3 percent in New Jersey are available for lease, according to the real estate firm JLL; only the Los Angeles area has fewer warehouse vacancies in the United States. Some companies are converting buildings never intended to be warehouses. Amazon turned a shuttered supermarket in Queens into a makeshift package hub.”
“UPS is building a logistics facility larger than Madison Square Garden on the New Jersey waterfront near Lower Manhattan.”
In Brooklyn, Queens and the Bronx, 14 huge warehouses to help facilitate e-commerce operations are rising, including multistory centers previously found only in Asia.”
“The warehouses in Red Hook are reshaping the tiny neighborhood, whose narrow, two-lane streets and low-rise buildings date to an era when longshoremen toiled on its docks.”
“Vans line up early outside one new Amazon facility, double-parking and causing congestion, said Jim Tampakis, who owns a marine equipment store in Red Hook. ‘The whole neighborhood is up in arms,’ Mr. Tampakis said.” READ MORE
THE RUSSIAN INVASION
THE 21 HATS PODCAST
We Are Survivors: This week, two years after the pandemic first hit, Shawn Busse, Jay Goltz, and Liz Picarazzi talk about what they’ve learned, what they’re doing differently, and whether their businesses have gotten weaker or stronger. Leading up to the pandemic, Shawn—still carrying scars from the Great Recession—did a series of workshops on how to prepare for the next recession. “And so in that regard,” he tells us, “we were really well prepared” for the pandemic. Plus: public companies are increasing prices aggressively and then bragging on earnings calls about the extra profits those increases are generating. Is there a lesson in this for privately owned businesses? Also: why does Jay seem more invested in his picture frame business than in his home furnishings business?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren
Thanks for the highlight, Loren!