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In a Downturn, Find Another Way to Compete
By Denise K. Baker, President and CFO, DRB Electric, Inc.
This article was originally published in the March 3-8, 2012 edition of New Mexico Business Weekly.
Unfortunately, there is no cookie-cutter solution. We at D.R.B. Electric, Inc. have had to analyze our strengths and weaknesses. What were we really good and profitable at? The key is to be proactive and try to stay ahead of the market. In 2002 we added an IT division to our existing commercial, industrial and 24-hour service department. Our revenues increased and we doubled our employees. We had seen other companies leave market sectors that they were great in or expand to new areas, only to enter a new market they were not knowledgeable in during economic crisis or downturns, and that path has gotten them in trouble. We felt confident this was the right direction and until the recession it seemed to work.
As the recession continued around the country we saw many projects being pulled off the shelf and lose financing. Jobs which traditionally had 3-4 electrical contractors bidding were getting 10-15 bidders with quotes often far below cost. We were losing jobs to other companies that did not pay health insurance, provide retirement, vacations or holidays. The choice was to cut these benefits drastically or find another way of competing. In order to deal with this situation DRB focused upon areas that had always proved reliable: service work. We took a hard look at every line item on the financials making cuts in areas in order to reduce overhead. As employees left we did not replace them and combined duties wherever possible. We had to reduce the employee health care benefit from 100% to 70%, limit take home vehicles and drastically cut meals/entertainment expenses.
It is easier to keep customers than to find new ones, so this means customer service is more important than ever. Our CPA, Carl Londene, gave Randy two valuable pieces of advice when he started the company in 1986. First, “Your existing customers are your greatest asset so keep them confident in your work and look to them for business leads and referrals from them” Follow up on the leads promptly with your company’s information. Always have a card or flyer to give out to a potential customer.
Secondly, “Never forgot the “ABC’s of Business; Attorney, Banker and C.P.A.” These two snippets are as relevant today as they were in the beginning. In construction the value of current financials, a reliable line of credit and pertinent legal advice can be the difference of success.
Do not stop marketing. Make sure your ROI outweighs the cost and marketing opportunities are not wasted. We dropped several associations and sponsorships. Employee benefits always take precedence. Key factors in choosing which organizations to continue with includes an active website, publication of membership lists, and a maintained website with links to your company. A networking lunch versus a sack lunch at the office working on a bid or proposal may be more beneficial.
It is imperative that you pay attention to cash flow. Sales may be great, but it is cash flow that keeps the doors open. Get tough with accounts receivable. In good times, it is easy to overlook terms and let things slide so that customers who are net-30 are not paying until net-60 or later. During a recession you cannot afford to not collect because the profit margin on other jobs is minimal to cover such write-offs. It is critical to tell these customers that you love their business but payment is mandatory. You must be assertive about getting paid timely. Our toughest issue is as a subcontractor is we often do not get paid until the General Contractors receive their monies.
Our continued success in the industry has become more of a team effort with all of our employees - from the field to the owners. Everyone has had to make cuts in expenses, work twice as hard for the same dollar and be part of the marketing team. We have weekly staff meetings and have reinstituted the company-wide meetings quarterly to encourage participation. The success of a small company is to take the team approach and be open to new ideas with the philosophy that just because that is the way it has always been done does not necessarily work anymore.
Every industry goes through cycles. As those in the construction industry know, the ups and downs are often more pronounced and frequent than in other sectors of the economy. Unlike other industries the key factor for construction companies is to know how to deal with the inevitable ebbs and flows of the business.
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The Loan Fund Helps Clients Realize Their Dreams, Expand Services
By Jane Blume
This article was published in the January 20, 2012 edition of
"Portfolio Advisory Board Insights," published by the Adrian Dominican Sisters of Grand Rapids Michigan.
Hosanna, an Albuquerque-based, international nonprofit that
produces Bible recordings in over 600 languages, expanded its services because
the same alternative lender refinanced the mortgage on its building at a
markedly reduced interest rate.
The Loan Fund’s mission is to provide
loans, technical assistance and mentoring to businesses and non-profit
organizations to improve the economic and social conditions of New Mexicans. Now
the largest alternative lender in the state, it is also the only one that
assists the non-profit sector. Its successful lending programs have earned
significant recognition from the U.S. Small Business Administration, U.S.
Department of Commerce and the State of New Mexico.
Pacheco also points out that the
Adrian Dominicans stepped in to provide The Loan Fund with its very first
investment of $60,000.
“Because the Sisters were willing to take a risk
with us, other faith-based organizations, foundations and dedicated individuals
followed their lead. The very next year, 1990, our capitalization reached
$350,000 and we were able to make our first six loans,” he adds.
Since
1990, TLF has made a cumulative total of over $44 million in loans, has helped
create or preserve more than 6,500 jobs, and enjoys a 97.5% repayment rate from
its clients. The current loan portfolio exceeds $11 million.
“We are
grateful to the Adrian Dominicans for continuing to renew their investment with
us,” Pacheco says. “We use the funds to make loans to hardworking people like
Raul Aboytes - who have skills, passion, and a drive to succeed – and to
non-profits like Hosanna that want to make the world a better place.”
As
a boy, Raul helped his mother feed hungry customers in her one-room, home-based
restaurant. The food business was not on his radar when he moved to the U.S.,
married and started a family. But noticing that his fellow immigrants were
flocking to Mexican-owned food carts, Raul secured financing from The Loan Fund
to purchase one. When his home-made tortas began “selling like crazy,” he became
inspired to dream bigger. A second loan helped Raul pay off the first one in
full and launch Jalapeño’s, which features his mother’s old recipes. He is now
thinking about buying another cart and starting a second eatery.
Loan Fund financing freed up
funds to allow Hosanna to take advantage of new technologies to expand Bible
listenership. Digital recordings and microchips inspired the invention of the “Proclaimer”
and the “BibleStick.” Half the size of a shoe box and powered by both solar
panels and batteries, Proclaimers are brought to groups of listeners in
extremely remote locations. The size of a pack of gum, BibleSticks have been
widely distributed to members of the U.S. military – especially in combat zones
– and are now available to the general public. And the innovations don’t stop
there: digital print, audio and video files have been converted into
downloadable “apps” from the Cloud for mobile devices.
Hosanna’s Vice
President, Clay Jackson, says he values Hosanna’s association with The Loan Fund
“because our two organizations share similar values: changing people’s lives and
giving them opportunities.”
Raul Aboytes is grateful that The Loan Fund
supported his dream of financial independence. “We were broke when they gave us
the loans, and we’ve paid them back. Without them, we wouldn’t be here.”
Sister Marie Luisa points out that she remained on The Loan Fund’s Board of
Directors for two decades not only to represent the interests of her Order, but
also because she was “very convinced in the vision of The Loan Fund; we always
did what we said we were going to do. We’ve given a lot of people a start in
doing something for themselves and others: they start a business, and then they
hire employees.”
“We were becoming the truly public servant that we were
called to be.”
For more information about The Loan Fund, visit their
website, www.loanfund.org, or call President/CEO Leroy Pacheco at
505-243-3196, ext. 25. Jane Blume, owner and principal of Desert Sky Communications, is a marketing consultant to The Loan Fund.
Because an award-winning New Mexico alternative lender was willing to take a
chance, Raul Aboytes, an immigrant from Mexico wanting a better life for his
family, left his hourly-wage job at Wal-Mart and opened Jalapeño’s Mexican Grill
in Santa Fe.
“We owe everything to
the New Mexico Conference of Churches and the Adrian Dominican Sisters,” says
Loan Fund President/CEO Leroy Pacheco. “An Adrian Dominican Sister, Marie Luisa
Vasquez, was one of several people from NMCC who formed our organization in
1989. She joined our Board immediately, and provided 20 years of dedicated
service and guidance until she retired.”
Hosanna
was founded in 1972 to provide a library of religious recorded material on
cassettes. Its high-quality Bible recordings became so popular, that American
and international Bible societies started asking for recordings in different
languages for the huge numbers of people who are unable to read. Hosanna hires
native speakers to make the recordings.
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Sawmill, Barelas Neighborhoods’ Collaboration a Promising Model
By F. Leroy Pacheco, Executive Director,
The Loan Fund
This Letter to the Editor was
printed in the Friday, August 6, 2010 edition of the
Albuquerque Journal.
I found it most heartening to read the July 27th Metro Section story, “Lease is
Up,” describing how Barelas Community Coalition and Barelas Neighborhood
Association are teaming up with Sawmill Community Land Trust to demolish a
rundown apartment building and, in its place, construct affordable homes in
Barelas near Sixth and Iron Southwest.
My staff and I at The Loan Fund feel a strong connection to this project because
it is being developed just a few short blocks from our office on Fifth and Iron.
Furthermore, Sawmill Community Land Trust is one of our successful long-term
clients.
Since 1990, The Loan Fund has made loans and extended credit to Sawmill and
other vibrant non-profits from Santa Fe to Sunland Park, all of whom are
dedicated to developing affordable housing for low-income New Mexicans. Sawmill
has been asked to lend its expertise to Barelas precisely because it has
succeeded so well in its own neighborhood.
Consider this: since 1999, Sawmill has built 93 homes and two apartment
complexes with 106 rentals and 60 lofts – and 46 senior housing units are
currently under construction.
We applaud Sawmill’s new partnership with Barelas Community Coalition and
Barelas Neighborhood Association, anticipate a very successful collaboration,
and hope that this model can be extended to other neighborhoods in Albuquerque -
and beyond.
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"[The editor] was excited about the article and wants me to contribute quarterly or semi-annually on training subjects... Thanks for helping make me look good."
- Mary Lou Dobbs, July 2010.
Overcoming Roadblocks to Customer Service
By Mary Lou Dobbs
This article was printed in
Claims Magazine’s on-line edition, July 6, 2010.
There is a tale of a medieval monk who persistently spoke a phrase in Latin Eucharist wrongly
- the correct word was “sumpsimus”; the monk’s version was “mumpsimus.” As a result, the word came to be applied to someone who sticks obstinately to his or her old ways, in spite of the clearest evidence that this behavior is stodgy and antiquated.
In the business world, some customer service representatives make blind choices to continue to operate with stale, dated attitudes and behaviors, such as “customers don’t really count” and not really listening when dealing with customers concerns. The danger of clinging to an obstinate behavior is that it blocks the development of customer loyalty; destroys long-term customer relationships, and prevents businesses from achieving their full potential.
In my experience, “mumpsimus,” is rooted in fear. At birth, everyone is born with two fears: the fear of loud noises and the fear of being dropped or falling. All other fears are learned and then developed over our lifetime. Fear can be the most negative force in our lives, creating unintended consequences. Its many forms can include situational fear (such as fear of failure) or emotional fear (such as fear of being judged). Over time, this sense of dread is hotwired to our brain as an automatic disconnect.
Fear: No One Will Listen
The consequences of an old mumpsimus behavior are that disgruntled customers stop doing business with your company without ever conveying their disappointment. It’s also true that claim adjusters have their own set of fears: of a hostile customer or one who may be unwilling to listen or respond to attempts to help resolve a stressful situation.
Claim Adjuster Attributes
For this article, I spoke with Jose Cornejo, an Allstate market claim manager who lives in Albuquerque. Jose said he had been with Allstate in New Mexico for 25 years and was clearly enthusiastic about his opportunity to serve customers. Here are some of the questions I asked him:
Q: What has kept you motivated for all these years?
Q: How do you accomplish staying tuned to their needs?
Cornejo is in good company. Psychologists from Freud to Jung have observed that people who listen past the words to uncover hidden messages gain greater insight and understanding of not only the self but also others. Cornejo also makes use of what I refer to as “power phrases.” This entails framing a request in a way that makes it easy for others to give you permission to get what you want.
Would You Object?
“I know how frightened you must have felt with a brick hurtling toward you on the freeway as your car was going 60 miles per hour,” he said to the customer. “I ‘m really happy you weren’t hurt, and that the damage to the bottom of your car wasn’t serious. Would you have any objection to sharing exactly what happened, in your own words?
Cornejo then listens; his “would you have an objection” power phrase question allows the customer to relay his or her experience of the accident, with the fear, relief, and all of the other emotions attached with such a distressing occurrence. Only after actively listening is a claim adjuster able to assist the customer through the claim process. The expression of appropriate empathy instills customer confidence.
The “objection” phrase provides the claim adjuster with a communication tool that builds a bridge of connection and a bond of loyalty that can last a lifetime.
You may say that a power phrase such as this one is not for you. However, it’s important to remember that mumpsimus feels like being-stuck in an obstinate, antiquated behavior. When we instead set out to learn and implement a new skill set, we start to move in the direction of long-term, loyal, and committed customers.
Mary Lou Dobbs is owner of Executive Benefit Strategies. This article is
adapted from her book,
“Repotting Yourself, Financial-Emotional-Spiritual Flow” (London: O
Books, 2010). Before establishing Executive Benefit Strategies, Dobbs spent
eight years working for Wells Fargo, coaching and training bankers on customer
service. She may be reached at 505-688-6703; also visit
www.repottingyourself.com or
www.maryloudobbs.com.
How many times have you started to share an experience of a difficult time with someone only to be interrupted, even before you finished your explanation? One of the most significant fears your customers have when filing a claim with your company is that you will interrupt them without allowing them to express the concerns and issues relating to their experience. If this does occur, then their fear of having their claims rejected will escalate. They may be reminded of other uncaring people in their lives or of a previously rejected claim.
To answer this question, I cite the example of a company with which I have had personal experience: Allstate Insurance. I have purchased six different kinds of policies over the years from Allstate. It is the nation’s largest publicly held personal lines insurer and a Fortune 100 company with $133 billion in total assets, so I feel I am with doing business with a quality company. Of the company’s 70,000 professionals, 7,500 are claim adjusters.
Cornejo replied that a claim adjuster’s day spikes when there is a hail storm, snow storm, wind storm, automobile accident or death of a loved one. “My customers at the time of a claim are tuned to the radio station WIIFM (What’s In It for Me),” he said. “But I know that my focus and message need to be tuned to WIIFT (What’s In It For Them).”
“I listen,” said Cornejo, who believes that paying close attention and understanding the power of words enable him to put his customers at ease.
In the Allstate family, power phrases are used to enhance relationships with customers and co-workers, provide superior service, and even coach new claim adjusters to develop the skills to elevate the level of their customers’ experience. Cornejo uses power phrases to demonstrate his empathy to customers, and asserts that “it is a privilege” to do so because it puts him in the position of being a helpful advocate. He recounts a recent car incident with one of his customers:
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