A new restaurant opens near an office building and — hoping to get business from those offices — drops off coupons to be added to employees’ payroll envelopes.
Sales Building Systems facilitates that kind of relationship on a grand scale. With a $1-million-plus proprietary software program, the company geocodes databases so national restaurant and retail chains can determine employers closest to their stores. The company then builds relationships with those employers and asks permission to distribute incentives to employees.
Sales Building Systems works with more than 900,000 employers that provide access to more than 64 million employees. While other print media average 0.5 percent to 2 percent redemption of their drop-ship programs, last year, Sales Building Systems’ average was 11.9 percent, says chairman Tim McCarthy. This success rate has led to almost 350 percent growth over the past five years.
Smart Business spoke with McCarthy about how he manages creative and profitable growth.
How does innovation drive your company’s growth?
We’re the only ones in our business. We provide incentives to consumers where they work, as opposed to where they live. Our clients are normally people who invest an awful lot of advertising money to households (through) newspaper, freestanding inserts, direct mail and TV.
Being the only one in your category sometimes is both a blessing and a curse. If nobody’s ever done it before, then people tend to be afraid of it. Someone once said pioneers are those people lying face down in a puddle with the arrows in their back.
The fast growth comes from providing something that no one else has provided. That’s the key. We found a niche that was universally needed. Everybody needs traffic in their store; everybody needs to get people to come try their business.
How did you accomplish such rapid growth over the last five years?
You take a concept that’s unique and universally needed, and then you just talk to as many people as you can talk to. The eight people who we have selling, our CEO Pat White and I are in clients’ offices making presentations 150 days a year.
Everybody spends all their time saying, ‘That was a great concept but it was undercapitalized.’ Undercapitalized, my butt. You didn’t get out and sell the damn thing.
You had a great idea, great concept. It made sense for the market. They really worked hard coming up with something cool, and they forgot to put the elbow grease to it and just work. The really great stuff that happens in business is the stuff that’s just hard work.
What is your biggest growth challenge, and how have you managed it?
Work force is the biggest growth challenge. In our business, there are times when we’re overwhelmed with work and times when we don’t have enough work. When you’re growing at that high percentage, it’s very hard to predict how much of a work force you’ll need that week or that month.
We’ve developed a very flexible work force. We have 100 full-time equivalents this year, but our actual full-time permanent work force would actually be no more than 40. Everything else is done by some people we call temporary or part-time. (We had to) learn how to build a functional, positive environment for a part-time work force.
How do you do that?
That requires a number of things. It required paying well for part-timers and creating some pretty cool benefits for part-timers which are unique to us.
Since we can’t provide health care to a part-timer and yet we think that’s terribly important, we set up a (benefit) where any month, up to $150, a regular part-time worker can bring us any kind of a medical receipt and we reimburse them for that money. It could be for glasses, for their partner’s co-pay where they work in order for their family to be covered, from a doctor’s visit or prescription medicine.
We not only pay them $8 (an hour), which is way over minimum wage, we also share our profit with them. We’ve never heard of anybody who shares with part-timers.
At the end of each quarter, we take whatever profit we made, we put it into a pot, and obviously 45 percent goes to taxes and 40 percent goes to capital, but we take 10 percent and we simply distribute it in cash to everyone in the company, according to their percent of payroll.
Last year, temporary workers who were with us all year received 12 weeks of free pay.
How have these benefits helped Sales Building Systems grow?
We’ve got part-timers who have been with us for seven years. It’s an incredibly loyal work force. This sounds overly simplified, but I swear to God, things are this simple.
‘How do you get your people to be that way?’ Because we treat them well. It’s not more complicated than that. We came up with a way that would still be kind and thoughtful to them but wouldn’t bankrupt the company.
You stay profitable so you don’t get in trouble by having too many people, and then you share that profit with them because they’re helping you be profitable. How hard is that?
HOW TO REACH: Sales Building Systems, (800) 435-7576 or http://www.salesbuildingsystems.com
