‘My Salespeople Have Become Order Takers’
‘My Salespeople Have Become Order Takers’
As rates rise and a period of record profits comes to an end, car dealers try to regain their edge.
Good morning!
Here are today’s highlights:
As a company grows, can a co-founder still be the voice of the company?
If you charge by the hour, you punish yourself for doing the job well.
There are tax breaks and other benefits for businesses that operate sustainably.
Gen Z expects mental health to be a normal topic of conversation.
PROFILE
A co-founder, whose voice helped build the business, is trying to step away from the mic: “When the potter Alex Matisse, 38, started East Fork with his wife, Connie Matisse, 37, and the potter John Vigeland, 37, they had aspirations for the business to become bigger than throwing pots in a rural studio. ‘We both wanted to do something ambitious,’ said Mr. Matisse, a great-grandson of the artist Henri Matisse. In 2017, the year before its factory opened, East Fork produced some 19,000 pieces; in 2021, it produced about 327,000. ... Since the company’s inception Ms. Matisse, who for the past two years has served as its chief executive, has played an integral role in how it communicates with the world.”
“A mother of two children under 8, she has written or signed off on blog posts that note exactly how the Mug is made and explain why, in a state with a minimum wage of $7.25, East Fork’s salaries now start at $22 an hour. She has written email newsletters, including one about how to clean dishes, in which she also grappled with her work-life balance. She has posted selfies taken in her bathtub to East Fork’s Instagram account.”
“As East Fork grew, Ms. Matisse narrated its evolution in candid blog and Instagram posts that explained why its pieces can technically no longer be called ‘handmade’ and how, by making more ceramics to sell, some profits can go toward higher wages.”
“When the company has stumbled, Ms. Matisse has put out fires with the same approach. In November 2019, a website glitch gave customers a double discount during a sale, causing East Fork to lose thousands of dollars in revenue. Ms. Matisse wrote about the mistake in an Instagram post, admitting how embarrassing it was and explaining that the company would bill customers who were undercharged. (It did not force customers to pay those bills, however.)”
“‘We’ll continue to have a crack-shot creative team,’ Mr. Matisse said. But ‘the brand voice will change,’ he added. ‘It’s not going to be Connie sitting in the bathtub.’ At least most of the time, Ms. Matisse added. ‘Maybe I’ll do a once-a-month bathtub post.’” READ MORE
MANAGEMENT
A Richmond restaurant cancels a reservation for a conservative Christian group: “‘We have always refused service to anyone for making our staff uncomfortable or unsafe and this was the driving force behind our decision,’ read an Instagram post from Metzger Bar and Butchery, a German-influenced restaurant in the Union Hill neighborhood whose kitchen is helmed by co-owner Brittanny Anderson, a veteran of TV cooking shows including ‘Top Chef’ and ‘Chopped.’ ‘Many of our staff are women and/or members of the LGBTQ+ community. All of our staff are people with rights who deserve dignity and a safe work environment. We respect our staff’s established rights as humans and strive to create a work environment where they can do their jobs with dignity, comfort and safety.”
“The group, the Family Foundation, was set to host a dessert reception for supporters on Nov. 30, the group’s president, Victoria Cobb, wrote in a blog post describing the incident. About an hour and a half before it was slated to start, one of the restaurant’s owners called to cancel it, she wrote.”
“The Family Foundation is based in Richmond and advocates for ‘policies based on biblical principles.’ It has lobbied against same-sex marriage and abortion rights.”
“In her blog post, Cobb likened the restaurant’s move to establishments that refused to serve Black customers in the 1950s and ’60s, and she decried what she called a ‘double standard’ by liberals who think a Colorado baker should not be allowed to refuse to make a wedding cake for a same-sex couple.” READ MORE
RETAIL
As rates rise, car dealers are turning gloomy: “For nearly two years, car dealers have been focused on getting more cars onto their lots amid a severe inventory crunch. Now, some are worried about how quickly they will be able to move them off. Slim selection at dealerships since mid-2021 created a backlog of consumer demand. At many dealerships, that trend has meant most vehicles arriving from the factory are pre-sold, often at prices well above the manufacturers’ suggested retail price. But as new-vehicle stocks are slowly replenished, some dealers say there are signs that an uncertain economic outlook and higher interest rates are starting to dampen demand.”
“A quarterly survey of more than 1,000 U.S. dealers, conducted Oct. 25 to Nov. 7 and released this week by Cox Automotive, shows their outlook for car sales is the gloomiest it has been since the research firm first began the poll in early 2017.”
“‘This incredible period that has produced record profits for many dealers is quickly turning into a more worrisome period,’ said Jonathan Smoke, chief economist for Cox Automotive.”
“The possibility of an economic downturn has caused some dealers to pay closer attention to keeping their sales staff sharp. Earl Stewart, who owns a Toyota dealership in North Palm Beach, Fla., recently expanded training sessions for his workers, pushing them to respond to customers quickly and ranking them in comparison to their peers.”
“‘I’m disturbed because my salespeople have become order takers,’ he said.” READ MORE
PRICING
Maybe you shouldn’t be charging by the hour.
SUSTAINABILITY
What are you doing to make your business more sustainable? “In The Hustle’s survey of 181 entrepreneurs, only 23.2 percent reported sustainability as a top priority — with 18.2 percent admitting to doing nothing. But small businesses stand to benefit from implementing sustainability initiatives, economically and environmentally. For example, by reducing your energy consumption, you can save money while improving the environment. There are many ways to implement sustainability — from reducing water waste to investing in renewable energy — without sacrificing profitability.”
“Economically, businesses with sustainability initiatives tend to outperform non-sustainable rivals. Companies who reduce their resource costs, such as raw materials, can improve operating profit by up to 60 percent. Consumers also report being willing to pay 5 percent more on green products.”
“Governments and nonprofit organizations offer tax breaks and grants for businesses with sustainable practices. For example, the Business Energy Investment Tax Credit provides companies that purchase renewable energy equipment with a tax credit. Other opportunities, such as the Environmental Protection Agency’s Small Business Innovation Research Program, help environmental tech businesses build their ideas.”
“Online retailers offer exclusive privileges to small businesses with climate certifications. For example, Amazon’s Climate Pledge Friendly and Wayfair’s Shop Sustainably initiative provides sustainable businesses with a platform to sell directly to climate-conscious customers.”
“Almost 8 in 10 consumers consider sustainability when making a purchase. Reap reputational benefits by publicizing your sustainability efforts. For example, you could dedicate a month of the year to discussing your firm’s initiatives and why sustainability matters to your organization.” READ MORE
HUMAN RESOURCES
This is what you need to understand about Gen Z: “Gen Zers have officially entered the workforce, and they’re here to stay. Not just as interns or entry-level employees, either. Some entrepreneurial twentysomethings are already bosses, and they’re running their companies in accordance with their generation’s core values. ‘I think Generation Z understands that we’re entitled to equality and freedom,’ says Kelsey Davis, the 25-year-old founder and CEO of Cllctve, a portfolio platform for creators. ‘The culture is starting to switch, and you’re starting to see Gen Z make certain demands,’ Davis says. ‘We want autonomy. We want trust. We want the freedom of choice.’”
“Over 81 percent of Gen Zers have left a job for mental health reasons, so it’s essential to get ahead of it to maintain a strong team. Gen Z, in particular, has ‘grown up with mental health support in high schools, colleges. It’s mainstream to talk about your mental health,’ explains [Kona co-founder Sid] Pandiya.”
“‘We expect this to be a normal topic of conversation and get the right level of support from the right people wherever we go, and we come to the workforce and don’t get it.’”
“One way Kona puts that into practice is by enforcing its employees to take a minimum of 15 days paid time off.” READ MORE
Elon Musk defends turning empty offices into bedrooms for Twitter employees: “San Francisco’s Department of Building Inspection said Tuesday it was investigating a complaint that Twitter had created makeshift bedrooms at its headquarters in the city, as new owner Elon Musk seeks to instill a ‘hardcore’ culture at the social media company. ‘We need to make sure the building is being used as intended,’ Patrick Hannan, a spokesman for the department, said in an email. ‘There are different building code requirements for residential buildings, including those being used for short-term stays. These codes make sure people are using spaces safely.”
“Musk appeared to confirm the report, writing on Twitter: ‘So city of SF attacks companies providing beds for tired employees instead of making sure kids are safe from fentanyl. Where are your priorities @LondonBreed!?” He tagged San Francisco Mayor London Breed, whose office did not respond to a request for comment.”
“Just weeks after he took over Twitter, Musk tweeted to a then-employee that he would be sleeping at Twitter, Insider reported. ‘Will be working & sleeping here until org is fixed,’ he tweeted Nov. 14 in a now-deleted post, according to an archive of Musk’s deleted tweets.” READ MORE
THE 21 HATS PODCAST
I Want to Double Sales Again Next Year: This week, Shawn Busse, Paul Downs, and Liz Picarazzi talk about their plans and goals for 2023. Shawn, whose marketing efforts still haven’t recovered from the pandemic, is hoping to build on the success of a recent event. Paul, coming off his best year ever, is investing $150,000 in a marketing campaign, including a new website targeting a different set of customers. And Liz, too, is attempting to shift her customer base, in her case from residential to municipal work. More immediately, however, Liz, who does not relish dealing with legal issues, has to decide how to confront a copycat competitor.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren