A marketing epidemic, to put it mildly, has been impacting most businesses — and it’s time to think about keeping your message simple if you haven’t already done so.
The roots of this epidemic can be traced back to two events.
First, during the economic fall of 2008, as businesses looked for ways to preserve revenue streams, companies hunkered down and focused on sales to preserve existing customers. Many cutoff or significantly reduced marketing budgets, and others shifted to digital media as a “low-cost alternative.”
The second event was the rapid spread of social media and the skyrocketing use of smartphones and tablets, which provide instant access to relationships, information and communication.
The social media craze and businesses’ desire to market on the cheap led companies to flood the marketing channels with content. Sales sheets, photos, videos, web pages — companies were suddenly all things to all people because they could push content to digital channels for “free.”
The problem — our marketing channels are now very noisy. As consumers of information, we respond to this noise with limited attention spans. The result — companies have sent confusing messages to the marketplace and people aren’t listening.
This current epidemic of marketing noise distributed across all channels leads to a common marketing need for all businesses — simplification.
Keeping it simple
So how do you achieve message simplification? It all ties back to the business. Here are seven steps to help get you started:
1. Identify three to four key business objectives for the next two years. Do you want regional growth or growth in a new industry? Do you want to sell more to existing customers?
2. Prioritize your objectives by placing dollars or number of opportunities next to them. This will help you focus on the most important areas.
3. Brainstorm a list of marketing tactics that can help you achieve each objective. Can you generate more leads from trade shows, your website, your existing customer list? What tactics do you need to adopt?
4. Write a succinct summary, or “elevator pitch.” This should be one to three sentences on how you benefit the people you are targeting in your objectives.
5. Compare your elevator pitch to your marketing tactics and existing materials. Review your website, brochures, email newsletter, social media accounts, videos, trade show collateral, etc. Notice how many “extra” things you say in an effort to cover all your bases.
6. Rework your message. Focus on the audiences for your key objectives. Identify the benefits for these audiences. Your marketing message should speak directly to these audiences so they can understand your value and usefulness to them.
7. Prioritize your marketing tactics. It’s tempting to be trendy and market on social media or through video, just remember to consider which tactics will best reach your audiences. You don’t need to be in every marketing channel, just the ones where your customers and prospects will hear you.
Finally, once you’ve simplified your message, stick to it! It is important so that people understand the benefits and value that you deliver. While it might seem repetitive to you, your audience will appreciate the clarity and with time, will remember what your business does best. ●
Kristy Amy is director of marketing strategy for SBN Interactive. Reach her at mailto:firstname.lastname@example.org or (440) 250-7011.
Life has a way of presenting us with difficult circumstances. Sometimes it’s in our personal lives, and sometimes it’s in our business.
If the circumstance is severe enough, it can create a crisis, which can often cause a feeling of hopelessness. When things outside your control come at you in droves, it becomes difficult to cope with them. Entire organizations can be overwhelmed and pulled down by external circumstances, which if not dealt with promptly and correctly, can destroy the company.
The CEO’s role is to right the ship and rally everyone around a solution — and it most likely won’t be easy. People are always looking for the easy way out, but that path is rarely an option. When facing a difficult situation, you have to play the ball where it lies, which means the resources you have in people, dollars or equipment are all you may have to work with.
But challenges also present opportunities. Faced with a crisis, you and your leadership team will be forced to look at your assets in new ways. You’ll be required to take a careful look at your customer base, your market and your processes. This kind of in-depth evaluation may uncover not only a possible solution to your problem, but it may open your eyes to markets or applications you never considered before.
Take Netflix for example. The company was the king of DVD-by-mail, and had already knocked off the once mighty Blockbuster. With the increase in streaming video content, however, customers began moving away from DVDs, threatening Netflix’s main revenue channel. It reacted by creating not only streaming content, but also by creating its own unique content. Customers can stream video from many outlets, but it’s tough to beat Netflix’s reputation and ease of use.
Often, the resources you need are already at hand; they just need to be used in new ways. Netflix already had the capabilities; it just needed to apply them differently.
You may find that after assessing what you have, you have started to create a new path that leads away from the crisis.
At the beginning of a difficult time, you may not be able to see a way out, which can lead to despair. By starting with an initial step and continuing, however, you’ll soon see the light. Start by calling your bank or suppliers to ask for better terms or whatever it is you need, and then build from there.
No matter what you do, though, don’t compromise your integrity. Always do the right thing in the wrong circumstances, because depending on how severe your crisis is, your reputation might be the only thing you have to negotiate with.
If you work hard, do the right thing and stay positive, a solution will likely present itself. It may not always be in a form that you anticipated — you may need to change your products or your market — but if you keep an open mind and work with what you have, everything will work itself out. ●
Most weeks I get on a plane and attempt to have an out-of-body experience to deal with all the hassles of flying as I travel from point A to point B. When flying, I have a few simple rules. One, I almost never eat the food. Two, I attempt to talk to no one other than obligatory hellos. Three, I never argue with or say a cross word to flight attendants.
One other very important practice I follow on land, sea and especially in the air is that I constantly scan my surroundings for potential troubles and new ideas.
On a recent flight, upon boarding, I quietly and obediently proceeded to my assigned seat.
As I began to sit down, a gentleman asked if I would mind trading seats with him so that he could sit next to his wife. Like most seasoned travelers I try to accommodate reasonable requests. In this case it seemed a no-brainer to agree to move.
Notice the details
As I started to settle in and fasten my seat belt I noted that my new seatmate was very hot. No, it’s not what you’re thinking. I mean she seemed to be flushed and radiating heat, ostensibly from a high fever. I’m thinking, this is not good, plus it proves the age-old adage that no good deed goes unpunished.
In the next minute I had an epiphany, which happens frequently as I believe that many problems come disguised as opportunities.
I rang the call button and, when approached, asked the cabin attendant to please bring me two cloth napkins. I stated that the purpose was to construct a makeshift face mask by tying the two pieces together to prevent possibly contracting some dreaded disease.
I feared that my intentions could be misinterpreted if I were to don a mask without an explanation; this could cause a well-meaning passenger to drag me to the floor thinking I had nefarious motives.
The stewardess smiled, nodding approvingly of my plan. She then summoned all her co-attendants to my seat and proceeded to whisper what I was attempting. Otherwise, she explained, they, too, could misunderstand my appearance and cause me bodily harm.
As founder and CEO of Max-Wellness, a health and wellness retail and marketing chain, I’m always looking for that next special something to share with my team. Therefore, while burying my now masked face in a newspaper so as not to frighten or offend the sick seatmate, I began dictating a memo to my merchandise product group proudly asserting that I just had another “aha!” moment, for which I am well-known, among my colleagues. For full disclosure, however, I am sometimes known for being a bit “out there” on occasion — but no one bats a thousand.
Turn an idea into a product
This particular predicament gave me the idea to develop a product kit that we could sell to weary travelers in our stores and in airports. I suggested a handful of complementary products, including a mask, a disinfectant spray and, if all else fails, relief remedies. I also noted that it probably would be prudent to include a cigarette pack-type “Black Box” warning stating that the mask is not what some suspicious flyers might think, but instead it’s for prevention of disease only. I even proposed we market these kits directly to the airlines to dispense as an emergency prophylactic for passengers exposed to airborne (pun intended) pathogens.
Fleeting thoughts have value
A key role for business leaders is teaching a management team to use fleeting thoughts as a springboard, to pair common problems with sometimes-simple solutions.
Just because it is a simple fix, though, doesn’t mean the idea couldn’t be a lucrative breakthrough.
When something sparks an idea it needs to be taken to the next level before being pooh-poohed. Most likely the vast majority of these inspirations won’t see the light of day, but that’s OK. Just think — what if one transient idea translates into the next Post-it Notes, Kleenex or bottled water?
The next time you sit by a masked man on a plane, it most likely won’t be the Lone Ranger. Instead, you might be witnessing the incubation of the next best thing since sliced bread. ●
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. “The Benevolent Dictator,” a book by Feuer that chronicles his step-by-step strategy to build business and create wealth, published by John Wiley & Sons, is now available. Reach him with comments at email@example.com.
The Kaiser Family Foundation recently released a study that stated premiums available on state-based health insurance exchanges would be lower than expected. In Ohio, rates cited were even lower than the national average, with costs for the second-lowest silver tier plan at $249 compared to $320 nationally.
However, Ohio Lt. Gov. Mary Taylor had earlier announced that individual premiums were expected to increase by 41 percent.
Smart Business spoke with William F. Hutter, CEO of Sequent, about whether the Patient Protection and Affordable Care Act (ACA) will succeed in driving down health insurance costs.
Do the rates cited in the Kaiser study mean costs are going down?
Possibly for a couple of years — we’ve still not seen the community rating prices for small group coverage, and just maybe the lowest prices were illustrated in the Kaiser study. The rates indicate a very low and attractive premium structure. It’s unlikely these rates will be sustainable after 2016 because carriers don’t know the real cost of insuring this group yet.
In addition, the paper didn’t address complex tax implications for both the company and employees that must be considered for total cost. For example, the new taxes on insurance premiums paid by carriers, but collected from employers, are a protection for the carriers. The tax will be set aside to help carriers offset the real cost of coverage for the first two years. After that, the exchange carriers will be on their own, with no government subsidy.
What impact will these rates have on businesses and their health care plans?
One of the leading actuarial firms, Milliman, has an analysis tool to help any company dig through the ‘play or pay’ considerations. Having completed more than 250 separate analyses, Milliman reported it made sense to ‘pay’ for only two of those companies. However, it’s difficult to access the individual total costs relative to plan designs.
What do the delays mean for 2014?
This is a practice year for everyone; 2014 is a penalty-free zone. With the rollback in enforcing penalties and a delay in reporting incomes for the affordability test, people think they are off the hook regarding ACA requirements. But everything else is going forward, including a big increase in taxes.
Unfortunately, the early testing on the exchange, scheduled for early September, was delayed. The Department of Health and Human Services also delayed the deadline to sign final agreements on health plans that will be available to consumers on the exchanges, which might have occurred because some insurers have been hesitant to sign up.
Many people anticipate there may be massive technology glitches relative to the exchanges, including a brewing concern in the technology arena about confidentiality and Health Insurance Portability and Accountability Act (HIPAA) compliance. The system is going to be large and unwieldy.
Who is going to buy insurance from the exchanges?
Even with the individual mandate — which still could be delayed by the government — beginning next year, most people will not be making changes regarding their health care, whether they have insurance or not. If you haven’t purchased coverage because you’re young and invincible, you’re not going to purchase coverage now with minimal individual mandate penalties in the first year.
The people who will be truly interested in participating are the most needy — those who cannot afford other coverage because they are ill and not working.
As for businesses, depending on the average income per worker, some might drop plans and let employees go to the exchanges. Businesses with fewer than 50 full-time equivalent employees will not be penalized when penalties are assessed in 2015. So, they could drop coverage, give everyone a $4,000 raise and let employees buy their own insurance. But companies need to remember that giving a raise to buy exchange coverage causes everyone’s taxable income to increase. Therefore, the employee pays more in taxes, the company pays more in taxes and the increase might bump income over the subsidy limits.
It’s still very difficult to predict what exactly is going to happen because there are so many unknowns. ●
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On Mondays, many high school, college and professional football teams all get together in a dark room and do the same thing: They break down game film. It’s often not a pleasant session after a team has lost. Their performance is under a microscope. Many plays are paused, replayed again and again in slow motion. Actions are scrutinized at a hyper level.
Because comments like, “I dropped that pass coach, but I want you to know my intention was to catch the ball” or “I did miss three easy tackles, but my plan was to not miss any,” would not be met kindly, they’re seldom heard. Why? It’s what you DO that counts most.
People do not judge you by what you think or feel, only by what you say or do. While your intentions may be in earnest, it’s your impact that is evaluated most. Impact comes through action, action through behaviors.
The following are four leadership qualities that require specific action for higher effectiveness:
The Teaching & Mentoring Leader
- Determine motivations of top talent by asking them about their passions and professional goals and follow up to stay aligned.
- Take time to teach, explain and confirm that understanding has occurred, (because we all learn differently).
- Make certain that grooming future leaders is a non-negotiable calendar commitment.
The Responsive & Reliable Leader
- Live your word: Do what you say you’re going to do WHEN you say you’re going to do it, without excuses.
- Cultivate trust via prompt responsiveness and respect others through acknowledgement of their inquiries.
- Follow up with staff and colleagues to ensure alignment and healthy communication is a front-burning priority.
The Service-Focused Leader
- Make individual meetings a standard to customize your connections and build trust.
- Even in stress or work mode, demonstrate courteous actions to team members.
- Designate “what service will each of us focus on most?” in weekly meetings and get 30-second comments from each attendee.
The Recognizing & Rewarding Leader
- Evaluate effectiveness not just by numbers or business output, but by the impact of how team members connect with colleagues and clients.
- Determine what recognition looks like from person to person by asking what he or she is incentivized by.
- Don’t just think about the positive qualities of others. Take time to express specific appreciation to staff and clients.
If you are currently in a leadership position with people under you, how would your direct reports and team members say you measure up to these? How well does your boss demonstrate these with you?
The “thought-leader” becomes a better performer and contributor to organizational success, ultimately through proof of observable behaviors. That’s what success boils down to in anything we do, but it begins with giving yourself an honest assessment. Perhaps Peter Drucker said it best:
“Follow effective action with quiet reflection,” Drucker said. “From the quiet reflection will come even more effective action.”
Joe Takash is the president of Victory Consulting, a Chicago-based sales and leadership development firm and a keynote speaker for executive retreats, sales conferences and management meetings. Learn more at www.victoryconsulting.com
Fleet tracking and management, if correctly implemented, can provide a business with a number of procedural, safety and cost efficiencies, says Noah Goodwin, CPCU, a commercial risk manager at RiskSOURCE® Clark-Theders.
“Fleet management can improve driving safety habits, which can reduce auto and workers’ compensation claims, and subsequently lower insurance costs. Morale can also be improved through increased safety,” Goodwin says. “Fleet tracking can help reduce fuel costs by increasing route efficiency, reducing idling time and impermissible usage.”
Smart Business spoke with Goodwin about how to effectively manage your fleet.
What exactly is fleet tracking, and how does it work?
The industry term for fleet tracking is vehicle telematics. In most cases, the system plugs in to your vehicles’ computers and provides a company with real-time data regarding each vehicle’s usage. Not only does it provide satellite vehicle positioning, but also it can provide instant notices for excessive acceleration or braking, or if someone is speeding. The GPS system will route the drivers in the most efficient manner and alert the company — the owner of the company or whoever is deemed responsible for the system — if its drivers are going out of the acceptable routes. You can identify which alerts you want to receive and set the threshold limits.
If you have a driver who tends to drive too fast or brake too hard, you can require additional training for that driver. If the poor habits continue, you could move him or her into a nondriving position.
Illustrating the effectiveness of such a system, a company installed vehicle telematics in its fleet and discovered one of its senior operators was 20 miles away from the job site where he was supposed to be. It turned out he was doing a side job with the company’s equipment and vehicles. Making employees aware of your ability to monitor their use of company vehicles can prevent this sort of behavior.
What are the keys for effective fleet management?
While it’s important to have a written program, the key is enforcement. Many companies will develop the program and not enforce it. By not enforcing the program you are incurring costs without realizing the potential benefits.
It can also get sticky in a couple areas. First, for human resources purposes, if you don’t follow the disciplinary procedures for one person but try to enforce them for another, you’re going to have a lawsuit. You need to be consistent.
Second, if your procedures say a driver who gets two speeding tickets within three years must be moved to a nondriving position, but you let that driver back on the road and he or she has an accident in a company vehicle that results in someone’s death, the company is going to be held liable. That’s not going to look favorable for your company in the eyes of a jury because the driver shouldn’t have been on the road per the company’s own procedures.
What are some common fleet management mistakes?
One persistent fleet management mistake is not following a maintenance program. If a vehicle isn’t being maintained properly, it’s more prone to loss. Without good brakes or tread on the tires, there’s an increased likelihood a driver could rear-end another vehicle.
Personal usage of company vehicles is a problem area because many contractors have a truck that is their main mode of transportation. Insurance rates and job bidding are based in part on how far your employees drive every day. Allowing extra driving increases your fuel and maintenance costs, as well as your liability exposure.
Prescreen drivers before you hire them. It costs just a few dollars to run a motor vehicle report, but it’s not always done prior to hiring. If you’ve hired a driver then find out he or she doesn’t have an acceptable driving record, you may need to find the person a different job in your organization or terminate his or her employment.
Noah Goodwin, CPCU, is a commercial risk manager at RiskSOURCE® Clark-Theders. Reach him at (513) 779-2800 or firstname.lastname@example.org.
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Enforcement of the employer mandate has been delayed until 2015, along with the annual limit on out-of-pocket costs a patient pays above what insurance covers, but the rest of the Patient Protection and Affordable Care Act (PPACA) is still scheduled to proceed as planned — although it’s uncertain whether that schedule will be kept.
“Right now there’s been two official delays announced. In theory, all other elements of the PPACA are coming into play. But this is so fluid and volatile that we could see the Department of Health and Human Services (HHS) announce that the federal exchange is not ready,” says William F. Hutter, CEO of Sequent.
Open enrollment for the health insurance exchanges, aka marketplace, is set to start on Oct. 1 and continue through March.
“They’re trying to build awareness through a marketing campaign but aren’t sure what to do because they haven’t seen how it is going to work,” Hutter says.
Smart Business spoke to Hutter about the upcoming timetable for PPACA implementation and what to expect regarding scheduled deadlines.
What do these delays mean to the implementation of the PPACA?
Pieces of the PPACA are already in place. The Medicare tax is increasing, the decline in flexible spending dollars have come into play, and the underwriting criteria for carriers is going to change how they underwrite and create similarities in pricing models because plans have to be pretty consistent. The age compression standard — rates can only be three times as much because of age — has been set.
Additional taxes also have kicked in, including the Patient Centered Outcome Institute fee. Employer requirements to notify employees have increased, as well.
Major changes are occurring; no one knows how they are going to pull it off. There are so many variables at this time that no one can predict what’s going to happen.
There’s also the question of whether the exchanges will be ready to go on Oct. 1. As of now, only one is ready — California. There’s also Massachusetts, if you consider that an exchange. The HHS has been quiet following a flurry of releases months ago. Something was leaked that the federal exchange might not be ready and since then there’s been no information, which means they might push it close to the deadline.
Meanwhile, companies are left to fend the best they can in anticipation of open enrollment starting.
Are repeal or defunding possibilities?
The repeal votes are all pomp and circumstance. Defunding is possible, but unlikely. The real problem is that no one can figure out how to make the PPACA work. That includes insurance agents and carriers, enforcement entities and employers.
What difference does delaying the employer mandate a year make?
All it means is that employers don’t have to worry about fines or penalties for a year. We’re recommending that companies proceed based on what they think is the best course of action. Companies need to design solutions to fix some of the exposures of the PPACA; it doesn’t matter what type of business you have, what makes a difference is your financial wherewithal. It’s a matter of coming up with a basic solution to address PPACA requirements and deciding how much you want to spend — like getting a combo meal and choosing between small, medium and large. That decision will be based on factors such as company culture and environment.
One emerging tactic is to seek early renewal of plans because of the uncertainty surrounding the PPACA. If you can get your carrier to renew starting Dec. 1, 2013, then you don’t have to worry about the PPACA and its impact until December 2014.
Right now, there’s no breathing room for companies. What happens if you anticipate that the federal exchange will be ready and the HHS announces on Sept. 10 that it will be delayed? Then there are all of the challenges associated with technology, billing and verification of wages. There’s going to be a whole new system that will handle protected health information, is it going to be secure?
There are so many things to be considered; it makes sense to try to schedule your plan year to avoid the inevitability of the PPACA until there is more certainty.
William F. Hutter is CEO at Sequent. Reach him at (888) 456-3627 or email@example.com.
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Statistics from the National Council on Compensation Insurance show that 38 to 50 percent of all workers’ compensation claims are related to the use of alcohol or drugs in the workplace. According to the U.S. Small Business Association, on average, employees with inappropriate substance use cost their employers $7,000 annually. Many Ohio businesses are turning to the Bureau of Workers’ Compensation’s (BWC) Drug Free Safety Program (DFSP) for assistance to address this issue and reduce their annual premium.
“A well-designed DFSP will help an employer deter substance use on the job, create a safer workplace and impact the bottom line by providing a discount to the employer’s premium,” says Cassy Taylor, senior risk services analyst at CompManagement, Inc.
Smart Business spoke with Taylor about the main components of Ohio’s DFSP.
What discount levels are available and when are enrollment deadlines?
DFSP offers basic and advanced discount levels that provide a 4 and 7 percent discount, respectively. Public employers wishing to participate may start their program Jan. 1 of each year. However, private employers have the opportunity to begin on either Jan. 1 or July 1. Applications for programs beginning Jan. 1 are due to the BWC by the last business day of October while those starting July 1 must submit their applications by the last business day of April.
What components does a DFSP require?
Basic and advanced levels of DFSP require:
- Annual reporting.
- Annual online safety assessment.
- Accident analysis training for supervisors.
- Use of online accident analysis on the BWC website for each accident/claim.
- A written policy in place.
- A minimum of one hour annual employee training.
- A minimum of two hours first year and one hour refresher supervisor training.
- Pre-employment, post-accident, reasonable suspicion and return to duty follow-up drug/alcohol testing.
- A cut off level of .04 blood alcohol content.
- Zero tolerance (basic level only).
- List of referrals for employee assistance.
In addition, the advanced level program also requires 15 percent random drug and alcohol testing, a second chance agreement for employees, a substance assessment for employee assistance and an annual safety action plan.
How does Ohio’s rebuttable presumption law factor in?
The rebuttable presumption law puts the burden on employees to prove that alcohol or drugs found in their system were not the proximate cause of a workplace injury. It also allows employers to ask for a disallowance of a workers’ compensation claim for an employee who tests positive on a qualifying chemical test. The law also is applied if an injured employee refuses a test. For a workers’ compensation claim to be allowed the injured employee must prove that being intoxicated by alcohol or under the influence of any controlled substance not prescribed by the employee’s physician was not a factor in the accident that caused the injury. Employers must post a written notice provided by the BWC to alert employees that they may not be eligible for workers’ compensation benefits if they are injured while intoxicated or under the influence of a controlled substance.
What impact would the DFSP have on a midsize company’s premium?
Assuming the eligibility and program participation requirements are met, a midsize service company could expect the following in annual premium savings by implementing the advanced level program, assuming the employer is participating in no other alternative rating programs:
- Payroll — $3,990,000.
- Individual discount — 16 percent.
- Individual premium — $14,683.
- 7 percent advanced level DFSP discount — $700*.
*Based on pure premium, which does not include assessments for DWRF and administrative costs for operation of BWC/IC.
Savings reflected above do not include the additional savings that can be realized by also participating in programs compatible with DFSP such as Group Rating, Destination Excellence, Small Deductible, and Safety Council to name a few. Always have your third-party administrator conduct a feasibility study to evaluate the best savings options available for your organization.
Cassy Taylor is senior risk services analyst at CompManagement, Inc. Reach her at (800) 825-6755, ext. 65434 or firstname.lastname@example.org.
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Shortly after he began with First Financial Bank some nine years ago, Claude Davis felt so strongly about building brand awareness that each year he and his team engaged a study to measure the awareness of the bank in each of the states where it operates. The year-to-year report showed the progress — and the momentum the bank was achieving.
“We did a lot of work,” says Davis, who is CEO, president and chairman of the bank. “It has been about constant marketing, constant awareness building and the consistency and the look and feel of the brand.”
The payoff has been impressive. The bank has locations in Ohio, Kentucky and Indiana. With 1,400 employees and company revenue of about $300 million, Davis has been leading a significant expansion for the bank since 2008. In Indiana, awareness has increased from less than 10 percent to 53 percent. It’s a similar story in Ohio where the bank went from less than 10 percent awareness to almost 50 percent.
Here’s how Davis builds awareness for First Financial Bank in a highly competitive industry.
Go for innovation
With 20 local banking centers, 90 consecutive quarters of profitability and the continuation of a 100 percent dividend payout ratio, it’s no surprise that Davis’ leadership has garnered praise across the banking industry for his efforts to grow the bank despite an economy in the doldrums.
If you had to pick the “must haves” to grow your business, innovation has to be among them.
“One of the real changes in the business is that you have to be focused on really being more innovative as a company,” Davis says.
That focus, which is becoming more 24/7 every day with the Internet and smartphones, has been spawned by the rapid advances in technology. While you can keep up with competitors and offer every product they do, it only goes so far.
“You always have to be in touch with what the competition is doing,” he says. “We certainly don’t have a lock on good ideas.”
There are a lot of people in the industry who are very innovative and develop interesting ideas that you may choose to follow.
“You have to think about it and look at all aspects and say, ‘What is the best thing for our client, and what can we offer?’
“The challenge is also being in touch with the technology companies that serve the banking industry,” Davis says, “and to make sure you are drawing the connection between your client and what is being developed in the industry — and deciding when is the right time to offer that as part of your product suite.”
It’s not a good idea to second-guess consumers on the subject of technology and online banking.
“Our younger clients start out very electronic-based and just grow with that,” he says. “But what we are finding with our more mature clients is that they are adopting the electronic form of banking more quickly than I would say is common wisdom — and it is because of the ease-of-use. Secondly, with the introduction of mobile banking and smartphones, we are all very comfortable now making transactions online. The rate of adoption is increasing among all our clients.”
Adopt a ‘client first’ model
If innovation is among the “must haves,” another requirement involves exceptional customer service. To stand out against your competitors, think about how you base your decisions.
“All our decisions have to be based on the client,” Davis says. “We believe we have to be a client-intimate oriented company. We call it being ‘client first’ in our operating model.”
It means taking care of all your customers without any favoritism. It has to cut across every business line.
“For us, that’s from small business to large corporate clients to individuals and in the individual states from those who were maybe just establishing bank accounts and bank business to those who are high net worth and who really need investment advice and stated advice,” he says.
“You try to serve that full-spectrum and serve all of them in a very personalized way.”
To stay in touch with both consumers and developers, it takes doing your own research and tapping into industry research.
“Talk to your own clients about how they want to be served, what products they would like and more importantly, what delivery channels they want to use to interact with you.
“So if you are a consumer client, you want to be able to interact with your bank whenever and however you want to interact,” Davis says. “We have every touch point covered as well as we are continuously asking consumers what do we not have in our products that they would like to see.”
First Financial launched a product called Panorama by which users can assemble their accounts from all their banks and credit cards on one online site.
Such a step requires some stepping out of the comfort zone for a company.
“It is our recognition that while we would like everybody to do business only with us, we understand that that is not the case with most consumers,” Davis says.
Blend the cultures in acquisitions
A third “must have” to employ during the growth efforts pertains to acquisitions. While such growth was often thought to be only in the realm of large companies, small and midsize companies are taking successful ventures into the once-exclusive territory.
The focus, not surprisingly, is that the cultures of the two or more businesses are aligned.
First Financial Bank has had five acquisitions since 2009, three in Indiana and two in Ohio. The company also has a long history dating back to the 1980s of doing more than 20 acquisitions in Indiana and Ohio.
“Cultural integration is the most important part of that process,” Davis says. “It is not the data processing conversion. It is not the financial metrics. It’s how well you integrate the associates of the company you are buying and how well you integrate the clients that are a part of that company you’re buying and making both feel like your company is a better place for them to be.
“Be open and willing to say that they may do something better in one or more areas than you do, and you decide to adopt that practice,” he says. “When you take that attitude, then you create a foundation and a trust level between the two organizations that says you really do value the merger process and it is not just a function of you want to buy their assets and move on.
“Begin with openness: ‘Look, we’re going to take the best of both and not make assumptions, just because we may be the buyer, everything we do may not be better than what the seller has been doing.’”
It takes time. It can sometimes take a few years to work through that process to really have everyone feeling like they are equal partners in the newly combined company.
“It takes a couple of years typically for that process to occur and to leave behind what that company used to be,” Davis says. “There is typically a lot of loyalty and pride that is built up in that prior company that doesn’t just leave you in three, six or nine months.”
How to reach: First Financial Bank, (877) 322-9530 or www.bankatfirst.com
Some four years ago, Tom Daulton was given $250 million by GTCR Golder Rauner LLC, a private equity firm that specializes in the health care industry, and was told to purchase a medical device company that had the potential to be turned into a public company. Fortunately for Daulton there was such a company for sale, and it had everything he wanted.
That company was called Biopsys, which had been acquired by Johnson & Johnson’s Ethicon Endo-Surgery for about $310 million 12 years prior to Daulton’s search. Ethicon renamed the business Mammotome after the company’s breast biopsy system, which was the first vacuum-assisted, minimally invasive system for determining breast cancer.
Over the years additional image-guided products were introduced and the Mammotome brand became the market leader in breast biopsies. More than 4 million women worldwide have had an image-guided, minimally invasive breast biopsy using the Mammotome Biopsy System.
“Mammotome is like saying a generic term like Kleenex — that’s how well-known the name Mammotome is,” Daulton says.
Eventually, the biopsy procedure moved out of the hands of surgeons and into the hands of radiologists due to the extensive imaging used. Since Johnson & Johnson was focused on the operating room, it decided it was best for Mammotome to find a new home.
“That’s right about the time I was looking,” says Daulton, CEO of Devicor Medical Products Inc., the parent company for medical device businesses such as Mammotome. “GTCR and I had been talking for years and said, ‘Let’s go see if we could build, through a series of acquisitions, a $500 million revenue, $100 million earnings medical device business.’
“I said, ‘OK, let’s try it.’ They gave me $250 million and told me I could borrow additional money and wanted me to find an excellent business to acquire as a platform to build a much larger company so that GTCR could take it public.”
Daulton looked at 125 businesses before he found Mammotome.
“I narrowed it down using a thesis for what I thought was the best type of business that included being physician specific, the reimbursement pathway was clear and it needed a regulatory path that made sense,” he says.
With those three criteria serving as a crude filter for what company would be acquired, Daulton purchased Mammotome in July 2010 and headquartered it in Cincinnati.
“This was a great business to acquire,” Daulton says. “It’s in a very, very important clinical space of breast cancer, which has no cure. It’s worldwide, and the product is excellent for the patient, hospital and doctor.”
Now, three years later, Mammotome is growing at a blistering pace. There are offices in France, Germany, Italy, Shanghai, Tokyo and the U.S.
Here’s how Daulton redeployed Mammotome and gave the business new life.
Turn assets into a business
Daulton was searching for much more than just a company to acquire and grow. His search was for a business that could become much larger by acquiring additional businesses and going public.
“I was looking for a platform,” Daulton says. “When you look at the company does this thing have water coming over the fourth bulk head and there’s no way, or if you just turn on the pumps and build a better mouse trap will you have a good fighting shot. We felt Mammotome was an excellent business.
“It was in a wonderful market space, a global market space, in an important clinical area that wasn’t going to be fixed soon, and a little bit of innovation was going to go a long way.”
The type of acquisition Daulton did with Mammotome is one he calls an “uber carve out.” Everything, short of some employees had to be created.
“A carve out is a place to create tremendous value,” he says. “Anybody that can take assets and turn them into an operating business with revenue, gross profit, cash flow, and net earnings, that’s pretty hard to do.”
Daulton’s first step after acquiring Mammotome was to bring in a team of eight very experienced people. His goal was to hire by function, with each function serving as a spoke on the wheel.
“To run a company like Mammotome we literally brought in a CFO, a corporate strategy M&A person, a head of HR, a head of sales, a head of marketing, a head of regulatory and quality, and a head of manufacturing,” he says. “We literally set up each one of those functions, and each one of those functions built their infrastructure. Had we not done that, we would have gotten lost.”
Once a team was in place Daulton had to put a lot of focus on what would build value for the company.
“If you’re going to take the company public one day, what builds value?” Daulton says. “We were pretty ruthlessly focused on those two or three things, and in our world that was quality, cost and people.
“We hired 300 people in 24 months. There was a tremendous focus on finding people that could deal with a blank sheet of paper. A carve out is not a place for someone who hasn’t done the job you’re looking for.”
Now that he’d purchased Mammotome and found his executive team, Daulton’s hard work was just beginning — he had to build up and grow the business.
“We started with about 120 people and today we have about 560,” Daulton says. “We have grown substantially. That’s a blistering pace in those 24 months and we had to do everything.
“What I essentially bought was assets. I didn’t get a building, a computer system, all the employees, accounting, a factory, nothing. In 24 months I took the Johnson & Johnson folks and some other people that we brought into the company and literally built a $200 million company.”
Daulton built a state-of-the-art medical manufacturing factory. He and his team put in all the systems — marketing, finance, regulatory, etc. While all that was being done, there was a second thing that had to happen — the products within the company were starting to get old and updating was in order.
Update the business
The original Mammotome, while state-of-the-art when they launched it, was now old, outdated and losing competitive share.
“I think people get way too excited to make stuff that no one wants to buy,” Daulton says. “In our world it’s much easier. Is it faster, safer, less expensive, gets a better diagnosis? It has to do something better or you’re wasting R&D dollars. If you can’t answer those kinds of questions crisply, you’re wasting money. We spent a lot of time answering those questions.”
Two things happened that necessitated innovation for Mammotome. No. 1 was concern in hospitals around minimizing exposure to blood and blood-borne pathogens. No. 2 was doctors wanted the procedure to be faster because the patient is awake, has anxiety and the needles look pretty big.
“Even though everybody was trained on it, it worked incredibly well and it made the best quality sample, these other two things started seeping their way into the technology and Mammotome slowly started losing sales in the U.S.,” Daulton says.
“Our device, while still the worldwide market share leader, was a little like the Sony Walkman. When it first came out it was awesome, but other ways to do it started coming out.”
A development program was started in 2004 to see if a new product could be made that not only fixed its two issues, but also added a whole new clinically relevant feature. Mammotome had started that project, but Daulton inherited the business halfway through the project.
“It cost me $40 million to finish it,” he says. “There was a clinical need in this new ultrasound space, so we took some really bright engineers and marketers and talked to a lot of customers and made a product that fit that and reintroduced it.
“The new product not only addresses the speed and the closed system, but what’s most important now is how fast you get the patient in and out without compromising anything in the procedure.”
Daulton’s $40 million investment in R&D happened in the first two years of acquiring the business and it got the company a new version of Mammotome. The company also developed a whole new product called Elite, which is a tether-less, self-contained, battery-powered biopsy device.
“That was a massive undertaking between getting the old products to grow and then moving puzzle pieces around to build and grow the business,” he says.
Don’t rest on your laurels
Despite all the growth, innovation and success Daulton and Mammotome have seen in the first two years plus, there is no time to relax. Daulton is focused on introducing new technology and further growth opportunities.
“We’re very interested in acquisitions that make logical sense to the customers we call on,” Daulton says. “We’re not interested in acquiring things just to generate revenue or profits. We’re interested in things that our sales people know how to sell and that our exact same customers already buy and we can add some value.
“What value do we bring to them and what value do they bring to us? If you can’t answer those two questions crisply, you should not make the acquisition.”
The company also plans to expand further globally.
“Our Asia business in three years could be larger than our U.S. business just based off the sheer growth of the population and the trajectory of the business,” he says.
To accomplish all of that, it is very important that Daulton and Mammotome have the right team in place.
“You’re not going to be successful unless you’ve got a bunch of people that are really motivated, really smart, know what to do, and feel like they can make a few mistakes and they won’t get in trouble,” Daulton says. “Those people have to be led by people who have enough experience that we don’t drive this thing into a ditch. There will be guardrails so that we can take a few chances and a few risks, but still get down the road in the right direction.”
How to reach: Mammotome, a division of Devicor Medical Products Inc., (513) 864-9000 or www.mammotome.com
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The Daulton File
Mammotome, a division of Devicor Medical Products Inc.
Born: Ames, Iowa
Education: He went to Arizona State University and received a degree in marketing.
What was your first job and what did you learn from it?
I worked at a camera store. I started when I was 14. I learned that working builds character.
What is the best business advice you’ve ever received?
Focus on the customer and really give them what they want. Also, call them proactively, even if it’s bad news. People want you to be truthful with them.
Who is someone you have looked up to in business?
My father, Merritt. He was a very successful, local, small-town merchant who had a great reputation and worked really hard.
What are you excited about at Devicor/Mammotome?
I think we’re going to have a very sizeable company. Things are going incredibly well with the new products and the employees are really excited and the customers are excited. If I cast forward three years, I think we have a good opportunity to build this to the $500 million mark.