Seventeen years ago, Andrew Berlin made a life-changing decision he quit his job as a lawyer for a large Chicago firm and bought a packaging company with his father.
When the Berlins bought Alco Packaging, now Berlin Packaging, the company had $69 million in sales. Today, it has grown to more than $250 million in sales and has nearly 300 employees.
The company has designed packaging for companies including Coca Cola, Keebler, Crayola and Tylenol.
“It’s been a lot of hard work but it did not come about without a plan,” says Berlin.
He believes his success is a result of his competitive employees, as well as of his unique selling strategy. Both factors helped lead Berlin Packaging to become the country’s largest supplier of plastic, glass and metal containers.
Smart Business talked with Berlin about the importance of his employees and how he makes his customers more money than the competition does.
How is the company different today from the one you bought in 1988?
It is more than four times the size. Our net earnings have grown over 24,000 percent from 1988 to 2004.
The big difference, which is less quantifiable but is every bit as important, is our people. Our secret weapon, our No. 1 competitive advantage, is the culture that we have.
That is not just my culture, but the culture that is prevailing throughout the entire organization and all of our employees.
How do you find the right employees and create that culture?
We have an unusual recruiting expertise in our company where we are able to not only hire people with the right skill sets but we hire people with very similar traits. The personality traits that we have in our company are a very strong, aggressive, can-do attitude.
This is summed up in our company motto that you will see in our advertising, on our business cards and on our Web site. ‘Anything is possible’ is the motto, and that really embodies everything that we do in the company.
The people we hire seem to derive joy from crushing competition. That’s more than just being a competitive person. That’s a person that wakes up every morning looking for ways to beat the other guy.
When you get several hundred people operating that way, you are going to grow your company by serving your customers better, taking care of the suppliers and customers and taking care of each other.
In addition to finding the right people, what are your business strategies?
Our main business strategies are to focus on global sourcing. We bring in anywhere from 15 (percent) to 20 percent of the product that we sell from overseas. You have to be so careful about where you buy from and how you do business overseas.
There are so many potential pitfalls. It could be with the transportation the associated costs of bringing the ware over. You have to be careful about the quality. What if something goes wrong after it has been shipped here from China or India?
There is a lot of work to be done on the back side before you start bringing in ware and product from overseas. That’s something we have been getting good at. We’ve actually established a global sourcing division that is focused on helping our customers achieve lower costs by buying overseas but doing it in a way that avoids the pitfalls.
Another business strategy that is gaining tremendous momentum now is our design division, called Studio 111. Studio 111 is a design studio and its mission is to increase our customers’ sales by helping them with package design. The whole idea is that if we can increase our customers’ sales by giving them better package design, then they are going to buy more packaging from us.
We’re also adding geographical locations. Today we have 23 locations. We’re hoping by the end of the next 24 months that we will have over 30 locations.
What is your philosophy of quid pro quo selling?
Why does anybody do anything that you want them to do? They do it because they think there is something to gain. To be more specific, why does a company buy from another company? The idea is they buy from another company because they think that company may be able to do something for them.
In many cases in business, the main goal is to make more money. If the No. 1 goal of a company is to make more money, then you have to ask yourself, ‘How can I help the customer make more money?’ If I help the customer make more money, then they will be more thrilled to do business with us.
There are three ways to help a customer make more money. You can help lower their costs. No. 2, you can help improve their productivity. For example, if we’re always delivering on time, then they don’t have to take the time to find out why the shipment is late. Then they use that time more productively.
The third way is to help increase their sales. If you can quantify those three ways to help a customer make more money and you put a calculator to how much more money they’ve made in the process of doing business with you, then they will end up doing more business with you.
The whole quid pro quo phrase (means) I’ll do something for you if you do something for me. The customer is going to buy more from you if you can help them meet the No. 1 goal. I presume the No. 1 goal any company has is they want to make more money.
A customer is going to do business with us versus one of our competitors if they feel that we are going to make more money for them than the other guy.
How do you use that to create a brand for yourself in the marketplace?
The way we present ourselves and the way we go to market is we believe we are a supplier that is going to help you make more money than any other supplier. That is a very different approach to selling.
Most companies will try to give (customers) the lowest price. In my mind, the lowest price only gets you one of those three ways to help a customer make more money – lower expenses. But, as a supplier, what are you doing to help them be more productive? What are you doing to help them increase their sales?
That’s why we’ve been excelling. The packaging industry only grows about 3 percent a year. Yet, Berlin has experienced double-digit growth every single year for the last 14 or 15 years.
This year, we are 33 percent ahead of last year. We’re obviously taking market share from our competitors. We do that through quid pro quo selling or, in my mind, good selling.
HOW TO REACH: Berlin Packaging, (800) 7-BERLIN or www.berlinpackaging.com