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Best Tips From Canada's Growing Companies Borrow the 9 best tips and tactics of the PROFIT 100 CEOs, and watch your company grow Snowbean Coffee Company recently had a job opening for a wholesale co-ordinator — a sophisticated marketer to deal with key customers. So why did president and CEO Jay Garnett end up hiring a counter clerk for one of his seven Vancouver-area cafés instead? Simple: Garnett believes in honing talent in-house. He promoted a junior customer service rep to the wholesale co-ordinator job. Then he gave the customer service gig to the receptionist. A café supervisor filled the receptionist position, seeing it as the gateway to a head-office career. And taking her first modest step into leadership, a counter person accepted the role of supervisor. In the end, Snowbean only needed to hire an entry-level counter clerk. Garnett believes all this shuffling benefits his company as much as it does the employees. Snowbean, the Canadian licensee for Seattle's Best Coffee, wins by having proven people, steeped in the company's culture and values, moving up the ranks. Sure, there will be some training to do, but that, too, sends a signal to his employees: this company wants you to succeed. Promoting from within may seem a trite strategy for one of Canada's Fastest-Growing Companies, but Snowbean (No. 74 on the PROFIT 100) knows what it takes to win. Like many growth firms, Snowbean depends on energized, creative and loyal employees who put customers first. In return, Snowbean rewards its employees through twice-yearly staff conclaves, a profit-sharing plan that can boost annual wages by 10% and a commitment to employee development, devoting 2% of its salary budget to staff training. "I like working from the known," says Garnett. "You can train people if they want to grow, but you can't train for respect, responsibility and attitude." Indeed, if there is one hallmark of Canada's Fastest-Growing Companies, it is their emphasis on building a culture that unites the company, its employees and its customers in one tight circle of aligned values and objectives. It's a goal many firms set but few achieve. Here are eight more tips from PROFIT 100 companies to help you build your own perfect circle. MANAGEMENT Seek out all the advice you need You already know that smart CEOs create advisory boards to help deal with issues that are beyond their day-to-day experience. But AC Technical Systems Ltd. (No. 70) goes that tactic one better. The Whitby, Ont.-based marketer of security systems has two boards to provide both strategic and operational leadership to CEO Sayan Navaratnam and his team. "It's always good to have a few more brains around," he says. AC's "board of industry" consists of five long-time veterans in the closed-circuit TV and access-control sectors. Meeting every six weeks as a group (and offering individual expertise from time to time), says Navaratnam, "they cover all aspects of technology, operations and sales that could help us in the day-to-day running of the business." The board is particularly adept at helping AC view its product line from the customer's perspective. When AC recently pitched an automotive client on its security systems, the board advised focusing on the prospect's return on investment — including the savings it would realize from lower insurance premiums. "That's not something that's obvious to most security companies," notes Navaratnam. The tactic worked: AC won a $70,000 contract, and now has the inside edge on extra business that could add up to $1 million. The second board, consisting of three entrepreneurial venture investors, meets twice a year to discuss high-level concerns with Navaratnam and AC president Dominic Burns. It critiques AC's financial forecasts, offers strategic growth advice and is helping the company position itself to attract a major equity investment in the future. "They see things we don't see," says Navaratnam, "because we're too close to the business." Although the boards serve different functions, the company learns from both. "The operational people think very differently from the investors," he says, "but they are equally important." Both boards receive compensation in the form of stock options, Navaratnam adds: "It makes them feel like owners." TECHNOLOGY Know your customer inside out Five years ago, the killer app of the Internet was to be the vertical e-marketplace — a hyper-efficient online business-to-business market through which companies could forge new supplier relations and reduce procurement costs. Most e-procurement companies are long gone, but one Canadian giant marches on: Mediagrif Interactive Technologies Inc. of Longueuil, Que. (No. 46). It survived one of the Web's most brutal shake-outs by knowing more about its customers than the customers did themselves. In 1996, when Mediagrif was building its first e-marketplace (for electronic components), co-founder Pierre Duval wished Mediagrif had a system to track client activities. This was before the days of packaged customer relationship-management software, so Duval spent nights building his own Java-based tracking system. He finished it in two months — and it began proving itself soon after. By 1997, Duval and co-founder Denis Gadbois had attracted 1,000 customers to Mediagrif's free marketplace. And thanks to Duval's system, the pair could see they had 500 active users. Figuring these companies had grown quite dependent on Mediagrif's exchange, Gadbois decided he now had the critical mass to move to the next step: charging exchange members to participate. Naturally, customers and even Mediagrif staff kicked up a fuss. But Gadbois persevered. He had a secret weapon: Duval's database. It reassured him that the most vocal complainers were also the system's heaviest users. He knew they were hooked. Mediagrif quickly converted 325 members to its fee-based system, the key first step on its course to building some of the world's strongest e-markets. Today, its electronic components network boasts 30,000 members, and the firm runs 10 other online markets, for everything from truck parts to wine. Collecting information on client behavior gives any entrepreneur the power to create stronger relationships. Take it from Gadbois: "We have so much data now, there's nothing we can't do for our customers." Network your employees Today's workplaces are more demanding than ever — and yet child care and other family duties make it tougher for people to work conventional business hours. How do you make life easier for staff, yet still satisfy the marketplace's demands? Delta, B.C.-based Cryopak Industries Inc. (No. 65) has boosted employee flexibility and productivity by investing in remote-access software that allows sales and administrative staff to work on their office files from home, or anywhere else they can access the network. "I've worked hard to create a culture that says it's okay to leave at 3:00 to pick up the kids from school," says president and CEO Martin Carsky. He knows that employees will catch up on the work they missed (and often more) later that evening. Carsky himself prefers the dawn patrol. "I can get up at 5:30, fire up my laptop in the study and work for an hour and a half, just as if I was in the office. Then I can get the kids breakfast and take them to school. That way I can have a productive morning and still be a good dad and husband." Cryopak, which produces ice packs and other temperature-control products, uses remote-access software from Florida-based Citrix Systems Inc. "It's not cheap, but it's absolutely worth it," says Carsky. "When you're talking employee productivity, I'm happy to spend money so that people are plugged in all the time." PRODUCT DEVELOPMENT Make customers your partners Edmonton-based BioWare Corp. (No. 84) is more than a successful developer of fantasy video games. It is also a direct marketer's dream. BioWare has the industry's largest (and probably most enthusiastic) customer database — 1.8 million people from around the world who eagerly seek out news about BioWare's role-playing games, and actually welcome the company's promotional e-mails and marketing materials. "We're probably the largest development community in the world," says BioWare co-CEO Ray Muzyka. BioWare's user community is part fandom, part focus group and all prospective customer base. By encouraging their gaming interests and promoting future products, BioWare can count on most of them buying its next big game, Jade Empire. At any given time, 500 to 1,000 or more users may be on its website, downloading "expansion packs" (more characters and situations for existing games), viewing the Hollywood-style trailer for Jade Empire or sharing hints and gossip-often with BioWare staff — on the chat boards. "The community is really important to us," says Muzyka. "They allow us to market our projects and promotions to them, and they let us do marketing surveys to find out what they think of our ideas." Now BioWare is also looking at finding ways to sell products directly to its fans. A recent poll found that 59% of BioWare.com users have bought software online, and 31% more said they might in future. Talk about your green empires ... MARKETING Get influencers on your side How do you sell innovative products in traditional industries? Learn from the health-care business: bring opinion leaders onside. Medsurge Medical Inc. (No. 63) is a North Vancouver distributor of niche surgical products. Founder and president Marc Morin is pinning his hopes for the future on an innovative, disposable device for treating hemorrhoids. To persuade surgeons and hospitals to dispense with their old, more cumbersome techniques, Medsurge has partnered with the two top specialists in the U.S.: New York-based Marvin Corman, professor of surgery at Albert Einstein College of Medicine, and Steven Wexner, chief of staff and chairman of colorectal surgery at Cleveland Clinic Florida. Rounding out Medsurge's advisory board is Ian Cleator, a Vancouver surgeon who conducts some 3,000 procedures a year using Medsurge's solution. Medsurge approached these specialists for marketing advice and product endorsements. In return for stock options, they now advise the company on how to enter new markets, give talks on its product and instruct other surgeons in the procedure; Dr. Corman will also be citing the device in the next edition of his definitive book, Colon and Rectal Surgery. Although the makers of breakfast cereals and sports equipment have long exploited endorsements by qualified experts or celebrities, business-to-business marketers may find an opportunity here. As Morin notes, drug producers regularly use partnerships with medical professionals to promote new products. The benefit works both ways, he says: "Of course, we want to be associated with the best surgeons. But the best surgeons want to be associated with the best products." Fish where the fish are Everyone knows that your best prospect is a current customer, but Daniel Urbani believes the greatest challenge in retail is to give customers a reason to come back. That's why the president of Canadian Petcetera Limited Partnership came up with Petcetera Plus, a loyalty program that brings customers back the way Fido fetches Frisbees. With 33 stores across Canada, Richmond, B.C.-based Petcetera (No. 43) now has a database of more than 600,000 customer names and addresses. Even more impressive, the average member shops at Petcetera every two weeks and spends $30. Compare that to non-members, who spend $20 once a month. Tracking customers' buying habits gives Petcetera valuable clues for boosting sales and consumers' loyalty. It can target special thank-you offers to 30,000 elite customers, or nudge infrequent shoppers by offering them special deals. Petcetera can survey customers on their product preferences or shopping experiences, and even offer them store credits for their help. "You've got to listen to your customers and find out what they're really looking for," Urbani says. "They can give you strategic direction." The benefits go on. When sales in one category sag, Petcetera can identify former purchasers of that product and ask them why they're not buying it anymore. And when a shopper with a complaint claims to be a long-time loyal customer, point-of-sale staff can quickly check her buying history and decide how best to make her happy. "That's what a loyalty program is," claims Urbani. "It's not just about finding ways to get customers to come back, but helping them when they've had a bad experience." Why do 75% of Petcetera shoppers sign up for Petcetera Plus? For every 10 bags of pet food they buy, members get another bag free. To woo customers who don't own cats or dogs, Petcetera Plus offers its members two fish for the price of one — a deal that not only doubles the amount of food customers will need to buy, but stimulates sales of fish starter kits and aquariums. Best of all, the database creates opportunities for Petcetera's suppliers, who tell Urbani that no competitor has a list like his. A manufacturer of specialty cat food might send a free sample to owners of older cats, while one supplier recently offered free coupons to Petcetera members in Victoria and Kelowna, B.C. While Urbani guards his lists carefully, he is happy to link members and suppliers when the offer is right: "It has to be win-win," he says. And when customers and suppliers both win, the business in the middle scores a double. HUMAN RESOURCES High-percentage hiring A three-month probationary period for new hires is a commonly used human-resources tactic — but Graeme McRae won't do it when filling a high-level position. The CEO of Belleville, Ont.-based Bioniche Life Sciences Inc. (No. 88) says that in his experience, co-workers are often uncomfortable sharing information with workers on probation, and he doesn't like the idea that an unsuitable worker has "failed" probation. When recruiting for higher-level positions, he hires new employees on six-month contracts, giving him plenty of time to assess their potential. At the end of that time, he either hires the person permanently or agrees that the contract has expired — which makes candidates feel better and looks more positive on their resumes. "You shake hands and say goodbye," says McRae. "It's a much more respectable way of parting company than saying, 'You didn't make the grade'." Hire in groups — and with an open mind Vy Hoang is tired of spending $20,000 to $30,000 training new salespeople who end up quitting or not working out. So the vice-president of sales at Toronto-based IMC International Inc. (No. 30), which sells digital-video security systems, came up with an innovative solution: he hedges his bets by hiring three salespeople at a time. IMC can count on at least one recruit dropping out in the first three months, says Hoang. The remaining two, learning together and helping each other, will probably generate enough sales to pay for themselves for the first year. After that time, if one is still struggling, he or she will probably leave voluntarily, says Hoang. And if both are doing well, no problem, he says: "You can never have enough salespeople." The company has another human-resources trick up its sleeve: Hoang says IMC has been quite successful hiring newly arrived immigrants for both skilled and unskilled jobs. One programmer, for instance, is the son of one of the leaders of China's space program, while a Russian scientist is working on algorithms for identifying shapes on video. IMC's opportunity, says Hoang, is that many immigrants who don't speak English well have trouble finding jobs in their field. So IMC hires them "at a discount" and pairs them with another staff member who speaks the same language. In a year or so, the recruits have the experience and confidence to demand higher pay — and the company, having had time to assess their potential, obliges whenever possible. Hoang and his brother Jack, IMC's president, come by their sympathy for recent immigrants honestly. They arrived in Canada nearly 25 years ago as "boat people" from Vietnam. Says Vy: "Someone gave us a chance." © 2008 Rick Spence Reprinted from PROFIT Magazine, June 2004 |
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