Making money Featured

8:00pm EDT June 25, 2008
Quantity, quality and frequency are critical factors at Network Communications Inc., says Daniel R. McCarthy.

As chairman and CEO of the $203 million publisher of printed and online magazines for the real estate market, McCarthy has to make sure that all of his 45,000 monthly advertisers are getting the right amount of traffic from the ads they place and that it’s high-quality traffic. It’s a lot to manage, especially when he also has to ensure that his sales force is happy and can effectively continue bringing in advertising customers. Despite the challenges of this balancing act, McCarthy knows it’s his job to create alignment and direction and to ensure everyone is moving steadily forward.

Smart Business spoke with McCarthy about how he creates alignment and about the business lesson he learned from packing his kids’ lunches.

Follow through. When I’m making lunch in the morning for my kids to take to school, and I put it in their lunchbox and hand it to them to put it in their school-bag, they trust the sandwich is in there. They don’t open it up.

If I give them the lunchbox once without the sandwich, they may laugh at me and then ask me for a couple days, ‘Hey Dad, is the sandwich in there?’ but they’re going to trust me when I say, ‘Yeah, I did it this time.’

But if they get a lunchbox three or four days in the space of two weeks where there’s no sandwich, they’re going to start opening that lunchbox, and they won’t trust me.

That’s why delivering on a product-promise is absolutely critical. You can make one mistake, and as long as you correct and acknowledge it, the people you’re delivering the service to will trust you, but if you make a handful, they’re going to doubt you.

Business is no different than any part of life — it’s structure with a set of rules, but at the core of (those) rules are accountability, trust, credibility and consistency.

Trust your salespeople. If your salespeople aren’t doing anything, then more often than not it’s because you’ve put the wrong incentive in front of them.

The sales organization is a lot like water. When you pour water, it seeks the easiest path — it doesn’t try to go through a rock — it goes around a rock. A sales organization will do the same thing. They want it to be as simple and as quick to make money off of it.

Engage the sales organization in conversations constantly because you can’t let the sales organization feel they don’t have accountability. If the organization says, ‘Oh, management will trust us no matter what,’ and they want to find the easiest way to make money, and if they know all they have to do is push in one direction and their compensation will get changed, so it’s easier to make money at the expense of the company, that’s a mistake.

But if you’re saying, ‘My promise to you is I’m going to give you something to sell, and I’m going to come out to the market to see if it works or not, and if it doesn’t work and I see you doing the things you need to, I’m going to trust you,’ then you have a powerful sales organization.

Create alignment. It starts at the core and at the perimeter — simultaneously.

At the perimeter, the customers are outside, and the first thing you have to determine is, do we have a clear understanding of who our customers are and what we’re trying to do for them and whether we are effective in doing that?

At the core, look internally and say, ‘What are our processes, and what processes do we have that are consistent and work and can be replicated and can help us be effective in producing what we want to produce and that can be profitable?’

Then trace those toward each other and make sure the two things meet. A lot of times, companies don’t meet halfway. They have a good understanding of who the customers are and the processes they use, but in the long trip that occurs between business processes and the experience the customer has, sometimes it just never gets linked up.

Communicate with customers. The relationship between the customer and the person they do business with in the company should be the single most honest and consistent relationship.

It’s asking each of the people out in the business who are talking to customers to be responsive when the customer is giving them feedback, and it’s also measuring. We do that by tracking the phone calls we generate, the e-mails we generate, the people who print a map off a Web site so they can go visit an establishment, and then we engage the customers in a conversation about that business activity.

Customers have to make money first, salespeople have to make money second, and then the company will make money third. If that gets out of sequence, then we’re not going to have a good long-term business.

If customers aren’t making money, they’re not going to have more money to give us later, and if my salesperson doesn’t see they’re making money, they’re not going to be motivated to go out and talk to the customer to get more money, and those two processes have to happen before the company can make money.


HOW TO REACH: Network Communications Inc., (770) 962-7220 or www.nci.com