Your business should always be urgently chasing growth, because if you’re not growing, you’re at risk of failing, says Cindy Monroe, founder, president and CEO of Thirty-One Gifts.
She learned this firsthand when her direct-sales company’s annual revenue peaked at $700 million around 2015. Then, revenue fell to around $400 million before stabilizing and flattening three years later.
During the high-growth years, it was such a struggle to get orders out the door that Monroe and the company’s management team didn’t spent time figuring out how to continue to grow. They weren’t planning, and eventually that caught up to them.
“You have to be intentional about continuing to focus on the growth and not just reacting to it. That’s what I would tell myself, if I could go back five years ago,” she says.
The challenge, however, was also an opportunity to add efficiencies to the company’s day-to-day operations and execution, in order to make it a better business today.
Monroe’s recent adversity hasn’t been limited to falling revenue. In February 2018, she learned the company’s lease wasn’t being renewed, which led to a decision to move fulfillment service to Texas, while keeping the corporate office in Columbus.
“We started immediately looking for what the next chapter of our home office would look like,” she says. “We looked at several cities. We looked at our building being together, our building being separate.”
There weren’t many facilities in Columbus that could support the size that Thirty-One needed. If the company had to separate fulfillment and corporate anyway, it made sense to look for a location out west to better serve and grow that market.
Again, an obstacle was turned into an opportunity.
Shepherding in change
Monroe says the company ultimately purchased Bob Evans’ New Albany building to house 300 front office and call center employees, while leasing space to the Bob Evans restaurant team. (Bob Evans Farms, which sells frozen foods, built and moved to a new location.)
With the relocation of the fulfillment center, approximately 650 employees will eventually work out of Flower Mound, Texas, a suburb of Dallas. This is down from the 800 who worked in the Easton-area facility as a result of efficiencies gained from new equipment.
The change wasn’t easy, and it included the cost of overlapping supervisors and building leases, as well as some tears, Monroe says.
“There were emotions, but you also show up in a leadership role and you cast your vision of where this company is going and the lives that it impacts every single day,” she says.
Thirty-One held job fairs for the employees was letting go — and attracted so much interest that it had to turn some companies away.
“All of our employees are asking if they can come back and work our conference with us in the summertime,” Monroe says. “They love working at Thirty-One, so it’s kind of bittersweet, but most of them, no matter where the distribution center would be in Ohio, wouldn’t have been able to make the move. A lot of them would have lost their jobs, whether it stayed in Ohio or Texas.”
About 30 employees are relocating to Texas, which should help transplant the company’s culture into the second location.
“It’s an investment. Just like any other initiative, you do your ROI and you look for how long this is going to take,” she says. “And with the growth that we will be able to tap into for not only Texas, but also other states out west, we do feel like it’s going to be a really good investment for us,” she says.
Both the Ohio and Texas facilities have space to host sales events with some of its top-level consultants, something it wasn’t able to previously do.
This past year isn’t the first time Monroe has had to let employees go. During the revenue decline, Thirty-One went through a few rounds of layoffs to decrease expenses. Monroe and her team also found ways to increase productivity because, when the company was growing rapidly, they didn’t have time to focus on those efficiencies.
The company increased its units per hour, tightened its operational processes and worked smarter. Monroe says Thirty-One went back to some of its key vendors to ensure the company was getting the best prices in areas like shipping and software licenses. They took a close look the products themselves, examining things such as zippers and the material that pockets were made of, while improving call center efficiencies with new software.
In addition, Thirty-One worked on its product planning efficiencies, buying inventory differently.
“Whenever you slow down, you have to get tighter on what you’re ordering,” Monroe says. “We also shifted, which I think all of retail shifted, being OK with running out of a few items.”
A data warehouse system helped the company measure which products were selling in which regions of the country.
“We were able to buy our inventory better, and that is huge,” she says. “Our inventory is one of our No. 1 expenses.”
Today, some of the direct sales consultants use the scarcity of items as a marketing point: Get the product now before it runs out.
“We had a couple of years of decline, so we definitely rallied together as a team and we’re able to right-size the business, right-size our expenses — very difficult things to be able to do when you’re in a decline,” Monroe says.
Faster and smarter
Once Thirty-One stabilized, Monroe continued to encourage the innovation that the decline helped engineer. New product lines including pillows and home décor generated interest, helping evolve the brand and keeping it relevant for consumers.
“One of the things this last year we’ve been focused on is, how do we make sure that we turn the categories and turn the inventory a little bit more frequently,” she says. “We have gone to a quarterly model.”
Previously, Thirty-One introduced new products twice a year, along with a few seasonal items.
“Now every quarter, we have a launch of new categories or a new line. That has been just in this last year, and that has continued to help with our stabilization,” Monroe says.
This summer, the company also rolled out a new digital training platform.
Traditionally, new consultants are matched with a sponsor who shows them how to do business. Over time, however, people have begun marketing and selling the products differently.
“We still have women that get a group of ladies together in a living room,” Monroe says. “But now we have women that get a group of ladies together and they go to the wine bar, or they go to the pool. And then we have so many that don’t get a group of ladies together, they will just sell through their friends and family through social media, or they may have an online party.”
If a sponsor is following one method, but a new consultant wants to try something else, the new training platform will help with that.
“You’ll be able to select what is best for what you’re trying to accomplish, whether it’s the amount of income that you’re trying to earn, or the style of the party or platform that you want to use,” she says.
Monroe and her team are also closely watching the economy. They’ve learned that when the economy is strong, Thirty-One can see a bit of dip. Young moms always need extra income, and there are always women looking for the flexibility and freedom Thirty-One commissions bring, but when the economy is good and consultants don’t need the extra income as much, the total number of consultants and the effort they put into their sales decrease, she says.
“Our business definitely ebbs and flows with the economy. Whenever people experience layoffs, or whenever people are unsure about their income, then they come to Thirty-One wanting that extra stability and that extra income,” Monroe says. “So we’re trying to make sure that we’re watching that and that we’re ready to support them whenever they need that extra income.”
- Find the opportunities in the midst of challenge.
- Use adversity as a rallying point for innovation and change.
- Learn from the past, but always be casting a vision for the future.
Name: Cindy Monroe
Title: Founder, president and CEO
Company: Thirty-One Gifts
What was the hardest management skill for you to learn and why? Having clarity around what needs to be executed and following up on the execution, because I’m a visionary and I’m always ready to move on to the next thing.
That’s why I love my CEO title. Whenever I have to put on the president hat, I will, but managing the day-to-day business is definitely not my strongest area. Whenever you go through a decline and you have to right-size the business like we did, I tell everyone I earned my president’s title.
Do you have a favorite vacation spot? We love to ski, so we go out to Utah quite a bit. And then we love the water, so we will go down to Florida on the Gulf side.
Where do you like to spend your weekends? I’m always outdoors. So, it’s skiing, hiking, paddle boarding, boating — it’s anything outdoors.
If you weren’t a CEO, is there another job you’d like to try? Maybe coaching businesses. I like to serve and care for other people, and I like to solve problems.