At Vanderbloemen Search, Everyone Blogs. Everyone? Everyone.
Guests:
Jay Goltz is founder and CEO of Artists Frame Service and Jayson Home.
William Vanderbloemen is founder and CEO of Vanderbloemen Search Group.
Karen Clark Cole is co-founder and CEO of Blink.
Producer:
Jess Thoubboron is founder of Blank Word Productions.
Episode Highlights:
Jay Goltz: “In most businesses, you go to buy the premium product, you pay twice the price. I’m not even close to that.”
Jay Goltz: “You might think you’re doing fine, and then you get inventory at the end of the year, and oops, you’re off $200,000.”
William Vanderbloemen: “Sometimes competitors think that growth is the goal, rather than actually doing something that’s profitable. We’re just going to get the pay-per-click, pay-per-click, pay-per-click, but it actually loses money.”
Karen Clark Cole: “Everybody uses the web to find what they need. There aren’t a whole bunch of channels you need to focus on. It’s one.”
Karen Clark Cole: “There’s a lot of data out in the marketplace about what people in my industry make or what the averages are. The trouble is we have all the big tech firms who blow it all up, right? Amazon, Microsoft, you name it. They’re all in our backyard.”
Full Episode Transcript:
Loren Feldman:
Welcome to Episode Two of the 21 Hats Podcast. Let’s meet our 21 Hats Podcast team for this week. Back with us again are Karen Clark Cole, who is CEO of Blink UX, a digital research and design firm based in Seattle. William Vanderbloemen, who is CEO of Vanderbloemen, a search firm that’s based in Houston and specializes in working with churches and other faith-based organizations. With us for the first time is Jay Goltz, who has several businesses in Chicago, including the largest picture framing shop in the country, Artists Frame Service, and a popular home store called Jayson Home.
Jay, let’s start with you. Tell us a little about your businesses. How big are they? How many employees? How much revenue?
Jay Goltz:
There are basically four companies. I have framing, I’ve got the home store, I sell wholesale frames nationally to frame shops, and I have an art business. 115 people, approaching $20 million. I started 41 years ago, basically out of the trunk of my car selling to artists during art fairs. That’s where the name came from. I have grown organically through all these years. Some years, we grew with 30% in the beginning, and then it went to 20%, 10%. And then in 2008, it dropped 30%. So if you do the math, I’ve grown at about 10% a year for the last 41 years.
Loren Feldman:
Let me ask you the question that I asked everyone last week. Are you making as much money as you think you should be making?
Jay Goltz:
At the moment, no, but I’m going to fix it. I have a problem with inventory and knowing what my cost of goods sold are. We sell a lot of products, so I actually don’t know exactly how much money we make until we take inventory. I’m in a weird business. I’m also manufacturing. Framing is manufacturing, and it’s all custom. It’s very difficult to keep a hands-on every day as how much money you actually made. You might think you’re doing fine, and then you get inventory at the end of the year, and oops, you’re off $200,000.
Loren Feldman:
Why is it hard for you to know how much money you’re making every day?
Jay Goltz:
Because if I were selling TV sets, every time I sold a TV set, I could take out of inventory $914.32. When you’re framing pictures, you’re estimating how much time and labor and materials are going to go into the jobs, and when you’re doing millions of dollars, it’s easy for, oops, the molding quality’s a little off than it used to be, or one of your guys retired and the guy that took over is a little slower. You can’t look at how many widgets you produced every day, because it’s all custom. It’s very hard. You’re basically estimating what you’re making every week. But until you take inventory, and I don’t have a system that I know exactly what the inventory is every day, there’s an adjustment at the end of the period and I take inventory twice a year.
Loren Feldman:
This is an issue you’ve been dealing with for 41 years.
Jay Goltz:
Yeah, and the other problem I have is my businesses is way too big to use the canned software that’s available out there right now for picture frame shops. But I’m way too small—because I already tried this—to go write my own software.
Loren Feldman:
Canned software to do?
Jay Goltz:
From point of sale to production. I’m using the same computer system I’ve had since 1986.
William Vanderbloemen:
Jay, does that mean you’re staring at a screen that only prints green letters right now?
Jay Goltz:
Basically. Like I said, I’m working on converting out of it, but there are only two other guys in the country anywhere near my size and I’m probably going to go to one of their softwares. I’m waiting to see how theirs flesh out.
Loren Feldman:
What do you need, as a picture frame shop in software, that someone else doing another retail business—
Jay Goltz:
You go buy something at a retail store. Barcode, click, done. Here, we’ve got to measure the art, we have to figure out how many feet of molding it’s going to take. Is it custom, is it regular? What kind of glass is it? There’s literally 1,000 different choices to make or 5,000 different choices and it needs to calculate the cost. It needs to figure out how long is this going to take and then it’s got to go into production. I’m framing hundreds of pictures a week. It’s not like the little frame shop where the person can just keep it on a pad of paper. It works.
Loren Feldman:
Karen, you’re our software expert. Any thoughts for Jay?
Karen Clark Cole:
Software creates efficiency and efficiency creates more money generally. I’m a big fan of having really efficient software that’s easy to use that anybody can use and gets you what you need. So if it’s doing that, then I wouldn’t change a thing. But if it’s not, then it needs to be changed.
Loren Feldman:
Do you think there’s a solution out there for Jay?
Karen Clark Cole:
I don’t know, it would be hard for me to say because we’d have to look exactly at what the specific scenarios are, the use cases for the different people interacting with it. Honestly, most big enterprise systems, they can’t possibly be perfect for every company, so you really need to customize.
Jay Goltz:
Here’s the reality. If I decided, “Oh Jay, you’re big enough, you should just go write your own system.” Not only would I be spending hundreds of thousands of dollars to write this, but who’s going to be the one internally who’s going to oversee this whole thing? It’s a major undertaking. While I’m way bigger than most frame shops, I’m also not a $50 million company. I’m just kind of caught in between. The fact is, what I have is working well enough until what I’m going to go to is one of my other friends in the business. They’ve got like 12 stores each of them, and they’re already doing it. They’re adapting existing software. I’m just going to take that one over. Doing it from scratch would just be a nightmare.
Karen Clark Cole:
Yeah, that’s always my advice. If you can use what somebody else has done, you should do that. Good idea to take over your friends.
Loren Feldman:
Jay, let’s go back to the original question. Like everyone else on this podcast, you expressed some disappointment in your recent profit numbers. I think you said that the issue at hand is inventory.
Jay Goltz:
No, that’s just one of them. One of the issues is the real estate taxes in Chicago just took a huge hit this year. So all of a sudden, that’s right out of the bottom line. Then they’ve been raising the minimum wage in Chicago $1 every year for the last five years. I’m not complaining about it, because people need to make more and it was ridiculously cheap before, but that adds some money, and then they just decided you’ve got to pay five sick days to everybody. Every time you turn around, there’s another 50,000, 100,00, 20,000, and it adds up. I probably should have raised my prices quicker and I didn’t. That’s just one issue.
The inventory problem is in the last 20 years, the quality of the materials we’re buying—everything from matte board to molding—the quality is not the same and it’s taken longer to give a good quality product because there’s more scrap. It’s like a moving target and if I make the adjustments I need to make, it will be fine. I’ve been through this 10 times.
Karen Clark Cole:
What are your annual revenues?
Jay Goltz:
Approaching $20 million. But that’s for all the businesses. My frame shop is literally 20 times the size of the average frame shop in the United States. It gives me buying power.
Part of the reason it’s so much bigger is I’ve got good people here that hang around, and they know what they’re doing. That costs more. You can go to one of these stores that does the 50% off sale thing and you’re going to be dealing with someone making 13 bucks an hour, and they’re going to have very little idea of what they’re doing. There’s a good chance it’s not going to turn out like you think. I’m paying more and it’s a more professional level and it costs more, so I have to constantly make adjustments to what we’re charging. Right now, my prices are pretty competitive. I might be a little more than some places, but in most businesses, you go to buy the premium product, you pay twice the price. I’m not even close to that. Maybe I’m 10% more.
Loren Feldman:
Are you thinking about raising them?
Jay Goltz:
Absolutely, I have no choice. And then I’ve got the tariffs to deal with. We import some stuff from China. The biggest thing at the moment—well, there are lots of big things—but this health insurance thing is a big problem. Every year you take another hit for 10%. Okay, well alright, we’ll deal with it. You do that for three, four, or five years in a row the health insurance thing is a huge issue, and I’ll tell you where the hole is. When they come up with these mandates with raising minimum wage, I pay for health insurance. There’s a big difference between forcing someone to pay someone more money who doesn’t give any benefits and someone who does give benefits, and that’s not factored in. I’m certainly not saying I want to pay everyone minimum wage, but it has pushed up the wages, which is okay, but I do pay benefits on top of that, and many companies don’t pay benefits.
Loren Feldman:
Are you talking about companies that you compete with?
Jay Goltz:
Yeah, that I’m competing with. We’re still dealing with some of these people are still in 1963. They’re paying cash to their employees. At the frame shows, I do speaking there all the time. I asked people, “What are your gross revenues?” Half the people in the audience don’t even know what they grossed last year. It’s like they’ve got the cigar box with the cash in it and they’re paying for their kids’ shoes out of it. They don’t even keep track of what their sales are and who knows if they’re paying taxes. It’s a small industry, and I pay taxes.
William Vanderbloemen:
When you say you’re paying benefits, what does that mean?
Jay Goltz:
I pay for over 50% of the health insurance, and the family, they have to kick in more. Even just paying for the individual, it’s just getting more and more expensive every year.
Loren Feldman:
Let’s move on to another topic now. I want to talk about marketing. I’d love to hear from each of you something that’s working something, something that’s not working for you. It seems like the playing field changes so often. What works one day doesn’t necessarily work the next day. Karen, let’s start with you. What’s working or not working for you in your marketing?
Karen Clark Cole:
For us, the biggest problem is resources because we bill time at our company, so a marketing department is non-billable. For us to make it a priority in terms of how we spend our profits on marketing, it’s a little bit of a catch 22. We need to do it, but at the same time, it’s really hard for us to justify too many overhead positions in the company. Our biggest constraint is just resources—people. But what what we largely do is web-based: SEO, SEM. That’s where we spend most of our money in marketing. It’s all about content. It’s about driving content to our website so that people find us. That’s the biggest thing and that works really well for us. We come up quickly in web searches, which is really important.
Loren Feldman:
Who’s your target? Who are you trying to reach?
Karen Clark Cole:
It varies. Product owners all the way up to the C suite. Sometimes the CMO, sometimes our clients come from the technology side of a company. Largely they’re the product type of people. They’re sometimes in the innovation space. We span all verticals.
Loren Feldman:
You’re in the tech industry. I talk to business owners all the time who are not, who are just at loose ends over the SEO issue trying to figure it out, trying to figure out who to trust.
Karen Clark Cole:
You want to hire really reputable firm and there are plenty of them out there.
Loren Feldman:
How do you know? How do you find the right one?
Karen Clark Cole:
You call, you get references, you talk to people who have worked with them who have had really good results, because it is constantly changing. It’s possible you have one or two people where that’s all they do is they understand Google, they understand how it’s changing, they understand what’s happening today and tomorrow. The best thing is to hire a specialty firm where that’s all they do and they’re very good at it.
William Vanderbloemen:
Karen, not to interrupt, but a cheaper alternative that we found is just have a really weird last name. That works great.
Karen Clark Cole:
Well, my name is a little bit weird, but they’re not searching on me. That’s the problem. They’re searching on user experience. They’re searching on usability, service design, digital transformation, all that kind of stuff. We have to show up there.
William Vanderbloemen:
I bring it up because it’s what I bang my head against, is how much we have to continually accelerate the amount of money we’re spending with Google, or with Facebook, for SEO results. I’ve told this story before—but I think I bought 300 domain names from GoDaddy. I think I have lifetime platinum status with them forever.
Jay Goltz:
Me too, me too.
William Vanderbloemen:
I mean, it was kind of ridiculous. Then I hired an SEO firm and said, “Okay, here’s the one thing we’re not going to do. We’re not going to name the firm after me, because I don’t want to be the limiting factor.” They came back and did all their magic and said, “Well, here’s the thing: good news, bad news. Good news: we found the right domain name. Bad news: it’s your last name.” I’m like, “What?” They said, “Well, your last name is so screwed up that you can misspell it into Google 100 different ways, and it’ll lead you there.” So we went with that, and it worked.
Loren Feldman:
Given that advantage, what are you spending money on? What is the challenge that you face improving your SEO?
William Vanderbloemen:
Two things come to mind. I’m sure there are more than that. My marketing person could tell you a longer list, but one, we’re non-geographic. With Facebook ads particularly, you can do geographic targeting. We’re all over the world, and so that makes it a little tough. Secondly, the word for people that we generally place—we work with all kinds of Christian organizations, whether they’re schools or relief organizations or even for-profit businesses—but the backbone of the business is churches hire us to help find their pastor. Well, not everybody calls it a pastor. You go to the other words: minister. Well, minister is also a political term for Minister of Defense. They’re just so broad and scattered that being able to hit the top search result, it just gets more and more expensive.
Loren Feldman:
William, when you talk about these keywords, are you talking about words that you use in your content to make sure that you show up in SEO? Or are you talking about keywords that you use in pay-per-click advertising to buy ads?
William Vanderbloemen:
Content. We’re not buying a ton of ads. We’ll buy a few, but if I heard Karen right, it’s content for her as well. My friend and client, Dave Ramsey, the “don’t have credit cards guy,” it used to be if you googled the word “debt,” he was the number one result. It was back in the day where you could just put “debt” all the way across the footer of every web page, and the spiders would pick up the word “debt.” It’s not that easy now. Now the spiders are actually reading the content you write to see if they think it’s thoughtful enough to hit a result.
Karen Clark Cole:
Not only that, Google will hit you if you don’t have a good user experience, meaning if you click on something and it doesn’t take you to content that’s relevant to the word that you clicked on and the navigation related to that—if they’re not connected to what your search terms are, they’ll give you a negative rating. This is where it helps us in terms of user experience work, and you’d better make sure that your site is authentic to what you’re saying it’s doing.
William Vanderbloemen:
Content length has changed too, hasn’t it Karen? It used to be 100 words was the right length. Now it’s like 600 to 800.
Jay Goltz:
One of the problems with pay-per-click is that there’s always going to be some idiot that spending a zillion dollars a month who gets the price up there. If they understood that it wasn’t working, they would stop doing it, but they can’t because the attribution is so difficult with this stuff. I’m in an industry where there’s a chain of stores that has over 1,000 stores, so they bought the pay-per-click. Do they have any clue if it’s working? My answer is, I don’t think so, but they’re a multi-billion dollar company, so what do they care? All it did was it jacked up the pay-per-click costs, and I don’t think it’s going to work for anybody at this point.
William Vanderbloemen:
That is so good, Jay. Sometimes competitors think that growth is the goal, rather than actually doing something that’s profitable. We’re just going to get the pay-per-click, pay-per-click, pay-per-click, but it actually loses money.
Jay Goltz:
Right! But in this case, a company does a billion dollars a year, are they going to notice? I know other businesses you look at, a lot of these companies we’re dealing with now do nothing but lose money. That’s the furniture business. Wayfair is having an impact. They’re doing like a billion dollars a year doing nothing but losing money. But it makes it a difficult environment for everybody else.
Loren Feldman:
The increase in the price of keywords has been going on for, I don’t know, at least 5, 6, 7 years. That’s part of the reason that people have turned to content marketing the way you guys do, Karen and William. William, you take a really unusual approach to producing a lot of content. Are you still requiring all of your employees to blog?
William Vanderbloemen:
We are. When we started in 2008, which would have been right when Twitter hit the scene, it was shortly after Facebook was no longer just college campuses. Then I fell into blogging. I guess the number one rule for blogging is consistency, right? I just didn’t have time to do it all the time. When I hired somebody, I said, “Hey, go listen to this podcast of this great pastor. Break it down, make a listening guide, turn it into a blog post, and here’s how you post” I think we were using WordPress at the time. It was pretty primitive. And he did it, and it worked, so then for the next person, we said, “Why don’t you do that?” Then it just kind of snowballed where we actually put a writing quota on everyone that joined the firm.
Loren Feldman:
Everyone?
William Vanderbloemen:
Everyone.
Loren Feldman:
Like the receptionist?
William Vanderbloemen:
Yes, my poor administrative assistant wrote an article. I’m like, “Write what you know.” So she’s like, “How do you be a good administrative assistant?” Well, that actually would work because no one trains you how to do that in a church. Unfortunately, she titled the article—and we weren’t doing a lot of quality control then—”The View from the Backseat,” and that just didn’t play real well with church people, so we had to pull that one down.
Karen Clark Cole:
Couldn’t you just change the name?
William Vanderbloemen:
We’ve stubbed our toes quite a bit over the years, but we have found that it’s changed who we hire. There have been people who would have been very good at a job, but they aren’t willing to or able to put together content, and that just doesn’t work for us. Content is king for us.
Loren Feldman:
How much content are you producing?
William Vanderbloemen:
Oh, gosh, it’s changed now. The definition of content has changed to produce an infographic, produce a blog post, produce a podcast, manage our Instagram…
Loren Feldman:
You’re a publisher.
William Vanderbloemen:
Yeah, it’s multifaceted content.
Karen Clark Cole:
Do you believe that any content is better than none, even if it’s bad?
William Vanderbloemen:
No.
Karen Clark Cole:
How do you oversee that quality?
William Vanderbloemen:
It’s almost all of our marketing work. We do very little marketing outside of that. We don’t buy any print ads. We don’t do trade shows. All the normal things that a services industry would do, we just don’t do
Karen Clark Cole:
We don’t do any of those either.
Jay Goltz:
See, I do all those things. I can tell you what’s changed. I do trade shows in the framing industry. I’ve been doing print ads for years. I’ve done TV for years, radio. What’s happened is that people who grew up in a normal business before the computer, they’re used to writing a check for the magazine. All of a sudden, a lot of this stuff has turned into salaries for internal people and they didn’t make the change in their head. They’re still budgeting 4% for advertising, but they really should be budgeting 1%. Then 3% should go to some people that work for you that are doing this stuff. My question to you, William, is who’s overseeing all the social media? Do you have a marketing person making six figures overseeing this whole thing?
William Vanderbloemen:
I do. They’re not doing a whole lot of marketing outside of that. I’ll tell you, Jay, this is not prescriptive for everybody. It’s just worked for us. It is not because William had some grand plan. I totally fell into this. In our world, there is a very wide gap between what you’re taught in seminary and what you have to actually know to run an organization. There are no business classes. There is not even “How to Run a Staff Meeting.” I have a master’s from Princeton. I know nothing about organizational development from them. I can tell you about St. Augustine. That’s really great.
We would put out things like—this sounds so simple—”How Do You Fire a Volunteer?” Well, every pastor is like, “Oh my gosh, I don’t know how to fire a volunteer!” When we would do a blog post or email and send it out and see what the click-through rate was—these are old stats—we were sold on a software company called HubSpot that we use for our inbound marketing. When they made their pitch to us, they said, “Usually you write a post or you put it out an email and the click-through rates going to be about 1%” Which is similar to, if you’ve ever done direct mail, that’s kind of what you look for.
Jay Goltz:
That would be great!
William Vanderbloemen:
They said, “We can take you to 3%.” So we’re like, “Okay, fine.” Then they got into our numbers and studied it, and we’re writing these blog posts out of a fraternity house. I’m glad OSHA never came over, because it was bad—and we were getting a 37% click-through rate. They came back and said, “You should be charging money for this.” We’re like, “No, no, it’s fine. We’re just writing out of the overflow of what we’re learning anyway.” It created a loyal tribe.
That was before you had Seth Godin writing about these things. We didn’t even know we were doing it. But there’s such a gap in our industry between what you’re taught and trained and what you actually have to know to do the job, that we had a very fertile ground for easy blog posts that would be exceedingly helpful. For listeners, maybe you identify the gap. Where is the knowledge gap and how do you step into it?
Jay Goltz:
I can tell you the reason that 21 Hats exists is because, I’m telling you, if you get a business degree today—not 30, 40 years ago—do you think they’re teaching kids in college, “Here’s how you fire somebody”? Do you think there’s a class on that? Do you think there’s a class on hiring?
Karen Clark Cole:
Go to art school instead. Because in art school, they teach you critical thinking, which is all you really need.
Jay Goltz:
I’ve got a lot of artists working for me. I can tell you that that’s a whole other experience.
Loren Feldman:
Karen, you rely on content marketing as well. How do you approach it?
Karen Clark Cole:
Similarly. We have a lot of people in the company writing and so everyone has their own blog channel, essentially. They can write on topics that are related to their job, related to the world as they see it from being a Blink employee. Quality assurance is there, we have an editor, and we check it. If it’s something that’s related to the culture of the company or the growth of the vision, then I always check it, but otherwise, it’s pretty open and free. Our goal is always to teach and provide not free advice, but free learnings. Like here’s how we do it. Here’s what we learned. And hopefully somebody can benefit from that.
Jay Goltz:
Here’s the question: if you had 30 salespeople, every month, you’d have a sales report. You know who the winners are, and you know who the people are who aren’t selling. Do you have any metric to know what your ROI is on the all these people doing this content? Because I have to believe some of them are gifted and great and are driving business and others are talking to themselves. Do you know which is which?
Karen Clark Cole:
We know whose posts are more successful, for sure.
William Vanderbloemen:
Our software, Jay, tracks every motion, every movement you make on our website, once we have your IP address. Assuming you’re using one or two IP addresses, between a phone and a tablet or a tablet and a laptop, we can tell where you’ve been. We are scoring articles to see, when people read this article, what’s the next step they take? If it’s moving them down the funnel towards a sale, then it’s a higher scoring article, and you bet we’re watching that.
Loren Feldman:
What software is that, William? Is that HubSpot?
William Vanderbloemen:
It’s HubSpot. We’ve had a very good experience with them.
Jay Goltz:
This is going to surprise a lot of people. Only 1% of businesses that start ever end up with 100 employees. Only 1% in America. That’s what the number is, and I believe that to be true. So most of the people listening right now do not have hundreds of employees. They’ve got 10, they’ve got 5, 20, whatever it is. How does a smaller business that’s doing $2 million a year, $5 million, how do they navigate this without that six figure marketing person who works for them? Do either of you have an answer for that, because I certainly don’t.
William Vanderbloemen:
I’ll tell you now, the world has changed in the 11 years we’ve been doing this. But when we started, I didn’t have any six figure anybody. In fact, maybe we were making $200,000 gross top-line a year. We hired HubSpot, which is a scale to service sort of deal. How large is your email list? If you’re small, it’s fine. Their whole premise—and not to turn this into a commercial about them—but the whole premise of inbound marketing is to allow the little guy to compete on the same field as the big guy. I think that’s where the quality of content, coupled with the right software, can help somebody on any scale budget compete at the same level as a Coca-Cola or one of the larger companies.
Jay Goltz:
I have a hard time believing that someone can compete with a Coca-Cola who’s got 40 people working in their digital department. That’s a little hard for me to get my arms around.
William Vanderbloemen:
Well, if they’re trying to make a soda, then maybe you’re right. But I’m saying smaller businesses, which tend to be niche, don’t have to hire a bunch of marketing people if they do good content and have the right software. Karen, you’re the software person.
Karen Clark Cole:
All I can say is how the world has changed is that everybody uses the web to find what they need. There aren’t a whole bunch of channels you need to focus on. It’s one. Google is a verb. That’s what you need to focus on. It’s a lot more streamlined and a lot more clear and specific, in terms of user behavior. If somebody wants to know, even for you, Jay, “Where should I get my picture framed?” They’ll do a web search.
Jay Goltz:
Okay, I need to challenge what you just said. You just said, quote unquote, everyone uses the web and you only need one place to advertise. That is absolutely not true. It’s largely true, but the fact is, if you’re in a retail business, it still matters having a storefront where you’ve got to be, and you can’t just rely on the web to do that, or nobody would have a decent spot anymore. They would all take spaces in industrial parks and just use the web to drive business to it.
Karen Clark Cole:
We have a beautiful office for that very same reason. They come here, there’s a real physical experience, but how we in our business get 95%—all of our new leads, we have referrals and we have repeat clients—everything new comes through the web.
Jay Goltz:
For your business. I’m not saying that’s not true for you. I’m saying that doesn’t work for all businesses.
William Vanderbloemen:
What I hear Karen saying is, you don’t have to think about radio, TV, print, and, and, and… There’s one front door to every business now and it’s the internet. I would totally agree with Karen on that.
Jay Goltz:
Oh my god. You are both in your niche businesses!
Loren Feldman:
So are you, Jay!
Jay Goltz:
No, I’m not! I’ve got three different businesses that go everywhere from retail to direct sales. I have a wider view of the world.
Karen Clark Cole:
Are you saying that your customers find you because they walk down the street and they happen to see you?
Jay Goltz:
Of course, absolutely.
Karen Clark Cole:
They didn’t do a search and then go walk into your office after they found the address and what time you’re open?
Jay Goltz:
I actually have statistics because I have to get their name and number. That’s an unusual retail business. For every single customer, they walk in, I can immediately see whether they were here or not. I can ask them, “Oh, you’re not in our computer. Where did you hear about us?” I can tell you, it falls into four buckets. It’s either they’re a repeat customer, two, a referral. Referral is way bigger than anything else. Drive-by, the web, and advertising.
There’s no question that the web has gotten more and more popular and is actually probably bigger than the drive-by now. It’s still upping the game. I’m not arguing that.
Karen Clark Cole:
You said exactly what I said, which is we get our customers from referral, repeat clients, and the web. We don’t get drive-bys, I’ll give you that.
Jay Goltz:
My point is that for people in the retail business, I would tell someone going into business, first and foremost, especially in picture framing, get a location where people can see your store, because everyone doesn’t do picture framing regularly and you need to be seen. People who think they’re going to quote unquote “save money” by getting something off the street usually go broke because a good storefront pays for itself. It’s not 100%. I’m not arguing the web isn’t a critical, major force these days, but it hasn’t taken everything else out.
You’ll notice that Amazon is on TV, Amazon’s on the radio. Radio’s not dead. It’s hurt, but it’s not dead. There’s still plenty of print advertising. It’s not all gone. It’s not like everything now is just the web.
Karen Clark Cole:
Can you do those other things and not be on the web?
Jay Goltz:
It would be stupid to. I would say you certainly could, but it wouldn’t be smart. No, I think you do need the web presence to go with it. I wouldn’t argue if you said the web has probably—let’s use the word “probably”—turned into one of the major, major ways of getting people into your business. But in a retail setting, retail still needs a good location and it’s still worth paying for the good location.
William Vanderbloemen:
Totally agree with you, Jay. I just know that when I have a need, like recently framing pictures, I just Yelped picture framing places. I live around four of them. I know where they all are. I Yelped it. I looked at reviews and did a little Google search and I read about it. I did price comparisons before I got there. 10 years ago, I would have walked in and said, “Please educate me on frames.” Now I think probably customers are walking in pretty dang educated and it’s all through the internet.
Jay Goltz:
Some, except this always reminds me of when McGovern lost against Nixon and the famous writer Pauline Kael said, “I can’t believe that McGovern lost. Everyone I know voted for him.” You’re both heavily using computers. Just because the fact that you use the computer and you always Yelp before you go doesn’t mean that everyone else is, because they’re not.
Loren Feldman:
Jay, don’t you think this might say something about the age of your audience? I think that the younger the audience is, the more clearly correct William is.
William Vanderbloemen:
Oh, Loren, I’m interrupting here because I would say, average customer age, I got all y’all beat. I’m working with churches. We are not a young market. My normal buyer is older and will oftentimes mail in their contract via snail mail and want me to return a snail mail signed copy. We would say, “How’d you find out about us?” They’d say, “Google search”
Jay Goltz:
I’m not arguing that. I’m just suggesting Google Search does not turn into 100% of people who go shopping for anything are going to Google search. In some businesses—clothes—my guess is that the retail storefront and the mall or on the street is still getting most of their business from people walking by or referrals. I don’t think they’re Googling clothes. But in some businesses like yours, it might be 100% from the web. In other businesses, maybe it’s 20%. It’s all over the place.
I have the numbers for my own business. I can tell you I get far more business from referrals than I get from the web. Though I will tell you, for the first time in 41 years, the web now is bringing in more business than the drive-by. That doesn’t mean I shouldn’t have a good location though, because they work together.
Karen Clark Cole:
Nobody’s arguing about your location. You have to have a place for them to go. A majority of our monthly nut is spent on our rent here. We have a beautiful office. It’s very important.
Jay Goltz:
But you’re not paying extra have to be on a major street to be visible to the public, I assume?
Karen Clark Cole:
No.
Jay Goltz:
Right, that’s what I’m talking about. The incremental difference between paying $20 per foot to have a nice office that looks good to paying $42 per foot because it’s worth being out there for advertising, I could show someone easily. Let’s say you have a 2,000-square-foot store. If you pay $12 per foot more, it’s $24,000 a year in rent. That’s nothing in advertising dollars. That is the cheapest form of advertising you could ever do when you’re in a retail business. Pay more money for rent and get more bodies walking by. People frequently go for the cheaper rent because they think they’re nut’s lower and it’s a bad way to save money.
Loren Feldman:
I want to hit a couple of news items before we have to go. One is that there have been a lot of stories lately where one municipality after another has passed a law requiring that employers not ask job candidates about their salary history. The purpose of this obviously is well intended. It’s meant to make sure that men and women are treated fairly in the way they are paid. But it does create a dilemma for employees? I’m curious how each of you has handled this. Has it been an issue for any of you?
Karen Clark Cole:
Loren, what do you think the dilemma is?
Jay Goltz:
Oh, I can tell you. You’re looking for a graphic designer, and you’ve got a candidate. You don’t know whether this person is junior and making $42,000 a year, or whether they are really experienced and make $83,000 a year. Frequently, what someone was making at their last job gives you a pretty good indication. If someone’s making $83,000, they’re probably going to have a skill-set more than someone who’s making $40,000. It just makes it a little more difficult to try to assess a candidate because you don’t know what someone else valued them at their last job.
Karen Clark Cole:
It should be irrelevant. What somebody paid somebody can be entirely different than what you pay. Why can’t you write a very clear job description, interview the person for their skills, make a clear judgment as to whether they can complete the skills and do the job, and then pay them what you’re willing to pay for that level of skill?
Jay Goltz:
For instance, they could bring you a great portfolio, but somebody else could have done half, but you have no way of knowing it.
Karen Clark Cole:
You have lots of ways of knowing it. You do reference checks.
Jay Goltz:
Certainly. I’m not saying the law is horrible. I’m not saying that there wasn’t a reason for it. I’m just saying it does take away one more way of trying to evaluate a candidate or to figure out, “Gee, if I pay them X dollars, are they going to be happy?” Maybe they’re out of work at the moment and they’re taking a pay cut. I usually would be hesitant to pay someone a lot less than they were making at their last job.
Loren Feldman:
Won’t that come out if you offer them a salary that’s lower than they’ve been making?
Jay Goltz:
Absolutely not. They just turned 54, they’re worried about getting a job, so they’re going to take this until they can find something better because they’ve got to pay their mortgage. They’re not going to say anything, they’re just going to take the job.
Karen Clark Cole:
What we do is we have very clear requirements as to what’s in the job description. We take out anything that’s not a requirement so that we’re not limiting who’s applying for the job, for one. Then we give them the salary range in the first call. When we have our first screening call, we let them know what the range is for this position. They’re well aware of what we’re offering. And we don’t ask them what they’re making before because what somebody else is willing to pay somebody A) it’s none of our business and B) it might be entirely different than our values for what we think we should be paying our people.
We do a lot of research in the market before we post a position to make sure that we are within the range that’s industry standard for the skills that we’re requiring. I think it’s mostly none of our business what they’re making before, and if somebody is coming in and they are able to do the skills that are required for a job and the pay is way more or less in some cases, that’s up to them to decide. They deserve to make more money if they’re doing a different job.
Karen Clark Cole:
Most importantly, it’s perpetuating pay inequality, which is the major problem.
William Vanderbloemen:
I’m conflicted on this. We deal with it arguably more than either of the other two of you. We do it every day whether we’re trying to assess candidates and whether they fit into markets, and then you want to get into crazy pay scales. Glassdoor doesn’t work for churches because churches have all these non-cash compensations and it’s very complex.
Karen Clark Cole:
What’s a non-cash compensation?
William Vanderbloemen:
They’re going to lease a car for you. The kids get to go to the church school for free. It’s arguably the most complex variance of types of compensation I’ve ever seen. I’m conflicted. On the one hand, I completely agree with Karen that the inequity in pay around gender and age is ridiculous. It needs to be addressed. On the other hand, all this time that you’re spending interviewing candidates who might not want to be a part of your job at all, or you might rule them out—you’re wasting time, which is wasting money, which is wasting value for the company.
Karen Clark Cole:
Yeah, but you don’t need to ask them what they made before. Why don’t you just ask them what they want to make in this role? Just change the questions.
Jay Goltz:
ZipRecruiter does that it. That’s what we use. We use ZipRecruiter and you put in there this job, what are you looking for, and they tell us so we know whether we should pursue it or not.
William Vanderbloemen:
Having done over 10,000 face-to-face interviews, one thing I’ve found is you ask somebody what they’re getting paid. It would be nice to know so you can trim things down. But on the other hand, all they’re doing is self-reporting. There’s no way to know whether it’s right or not.
Jay Goltz:
Well, that’s not true. I’ve had cases where I’ve heard of people doing it where they asked for a W2.
Karen Clark Cole:
You can’t do that.
Jay Goltz:
I do know people have done that. But the point is, you could also call the reference and say, “She said she was making $62,000. Is that right?”
William Vanderbloemen:
No, I hear you, Jay. I guess what I’m saying is, I’m always looking for ways to do triage in interviewing. You need to take your time interviewing, but you don’t need to waste your time. So if you’ve got a $60,000 pastor position, and you’re talking to somebody who’s currently making $100,000 and barely making it work financially, for the ministry, they can drop a 40% pay cut, but probably not. So why are we wasting our time?
On the one hand, there’s the efficiency of being able to find things out. On the other hand, Karen, I agree with you, there are other ways to figure that out. I don’t think that pay inequity should be the only motivation for not asking. With Glassdoor and everything else that’s out there, you should be able to figure out whether you are paying fairly or not.
Loren Feldman:
William, are you subject to these laws at the moment?
William Vanderbloemen:
It depends on what state.
Loren Feldman:
I see. What about for you for your company?
William Vanderbloemen:
We’re in Texas.
Loren Feldman:
No regulations, right.
William Vanderbloemen:
It’s dependent on where the person is working that you’re asking. So if I’m interviewing Karen, and she’s in Seattle, I cannot ask, even if she’s coming to work here.
Loren Feldman:
If you can ask, do you ask, William?
William Vanderbloemen:
Absolutely.
Karen Clark Cole:
Why wouldn’t you just ask what they need to make or what they want to make?
William Vanderbloemen:
I have a different agenda than 99% of all people asking that question. I’m gathering data on what everybody’s getting paid in a sector where there is no gathered data. Anytime I can get data, I do it.
Jay Goltz:
I have to tell you something. I do the same thing. I want to know what the average frame shop’s paying someone. You’re not the only one trying to figure out the market. Here’s how I think we can reframe this.Excuse my pun. A), I assume most all of us will agree this should help the pay inequity thing and it’s an important problem. Okay, I don’t have any argument with that. I’m just adding it certainly can be helpful to know what they were making and I’ll put up with it because I have no choice.
William Vanderbloemen:
The law for my work is a bit of a pain in the butt. I think, given what I see, and this isn’t even gender or age inequity. I work largely with nonprofits and their goal is to spend as little money as possible. If I can find out that Loren’s only pulling $75,000 year where I was going to pay $100,000, I can knock it down to $79,000 and he feels great. I hate that. That’s ridiculous.
Loren Feldman:
We’ve got to stop in a moment, but I want to come back to Karen. After all this back and forth, I’d like to hear your thoughts. Can you sum up this conversation about pay equity and asking this question, “What’s your salary history?” What do you take from this conversation?
Karen Clark Cole:
I think it’s unnecessary. Again, I can see the difference in that there’s a lot of data out in the marketplace about what people in my industry make or what the averages are. The trouble is we have all the big tech firms who blow it all up, right? Amazon, Microsoft, you name it. They’re all in our backyard. Facebook. They blow up the average salary.
What we do is we talk about it in that early interview. This is the range, this is the expectation for the job. Then we let them say, that’s in my range or out of my range. Right away, we go no further or we carry on, depending on what they say. I think it’s extremely important if we’re going to make a change in pay equity, to stop right now asking what people made before. It’s the number one thing that that shows in the research that makes a difference. We just have to do it, whether it’s the law or not.
Loren Feldman:
Let’s leave it there. We hit a lot of great topics. I have a feeling we’re gonna come back to all of these. Thank you guys for your time today. I appreciate it.
