I Decided to Slow Our Growth

Introduction:

This week, Jennifer Kerhin tells Shawn Busse and Jay Goltz that she finally managed to take her first real vacation since starting her business almost 20 years ago. The vacation is part of a decision she made last year to regroup a bit, in part by backing off on her sales and marketing outreach. The goal is to give her team and herself a bit of a respite while they catch their breath and while Jennifer institutes processes that will improve operations. Of course, that raises an obvious question: Will she be able to turn the growth back on when the time comes? Plus: Shawn and Jay explain how they’ve eliminated negotiation from their hiring regimens. And all three debate who’s really responsible when owners pay for a marketing plan that doesn’t work: Is it the salesperson who pitched the plan? Or the owner who fell for the pitch?

— Loren Feldman

Guests:

Jennifer Kerhin is CEO of SB Expos and Events.

Jay Goltz is CEO of The Goltz Group.

Shawn Busse is CEO of Kinesis.

Producer:

Jess Thoubboron is founder of Blank Word.

Full Episode Transcript:

Loren Feldman:
Welcome, Shawn, Jay, and Jennifer. It’s great to have you here. Jennifer, you’re actually joining us from Spain where you’re concluding a vacation. I think it’s the longest vacation you’ve taken in quite some time. Am I right about that?

Jennifer Kerhin:
Yeah, it’s the longest vacation I’ve had, I think, since I started the company. So that’s, I think, a great sign. I was very nervous about taking this, but it’s turned out great. My leadership has done an amazing job. I’m ready to come back. I’m rested and relaxed. I was strung out there for a while. So it’s been perfect, absolutely perfect.

Loren Feldman:
How long have you been gone?

Jennifer Kerhin:
I would say, it’s 16 days now. So, I go back tomorrow. I think after nine or 10 days, I could have gone back. You know, when you take a week’s vacation, by day three or four, you’re already thinking about leaving. But 10 or 11 days? It really helped me settle. It’s helped me relax and just take the moment that I needed. I had been pushing myself way too hard, especially the last four or five years. And so now I’m ready. I needed this vacation, and I feel rested and ready for the future.

Jay Goltz:
You can only tell entrepreneurs, “Well, you know how you want to get back after four or five days.” Normal people would listen to that and go, “What is she talking about?”

Jennifer Kerhin:
No, I’m ready! And I’m excited.

Jay Goltz:
No, I got it. I got it. Yeah, you talk about it like everyone thinks that way. And I’m just reminding you: Everybody doesn’t.

Jennifer Kerhin:
Yes, that’s true. When you’re strung out that hard—I had pushed myself so hard for so many years, I lost that excitement. I lost that desire to be an entrepreneur. And now it’s back. I got a lot of sleep. I did a lot of hikes. I drank some wine. I had a fantastic time with my husband. And so now I’m rested and ready.

Jay Goltz:
And this podcast is like getting out of a submarine. You gotta go into the decompression chamber first. [Laughter]

Jennifer Kerhin:
Jay, that’s right.

Jay Goltz:
You don’t want to jump right from that back into business. This podcast is the reentry vehicle, and we’re glad that we can help with that.

Jennifer Kerhin:
Well, and just a reminder to all the listeners out there: Entrepreneurs push themselves hard, right? We do. And we are human. And we need a break sometimes. And taking that half a step backwards can propel you for the future. Otherwise, we’re all gonna burn out.

Loren Feldman:
How much did you keep in touch with your office?

Jennifer Kerhin:
I would say the first 10 days, not at all. Not at all. I made one person, who is basically my second in command, anything that was an emergency could go to her, and she could text me. She didn’t at all. And then we actually had an event here from a client in Barcelona the last four days, so I stopped in to see them. But no issues whatsoever. It’s been fantastic. The only thing I had to do—which I’ve got to figure out how to get off my plate—is I had to run payroll twice. But other than that, I didn’t have to work.

Jay Goltz:
You run the payroll because you don’t want everybody, because there’s no way you will be comfortable knowing what everyone else makes?

Jennifer Kerhin:
Yes, Jay, and I think this is purely—I have a person now who does finances. And she’s like, “Jen, you gotta learn to trust somebody to do payroll.” It’s exactly that, Jay. It’s the last thing I’m holding on to as a CEO. Everything else, I’ve sort of given up.

Jay Goltz:
But that’s not irrational. It is a potential problem if somebody knows. You’re not necessarily wrong to be careful who you give that to, because that is information where somebody could go, “Oh, I can’t believe she makes more than I do. I’ve been here longer.” I mean, it’s not that simple. It really isn’t that simple.

Jennifer Kerhin:
Compensation is something that is not just a skill-set. It’s not just experience. It’s what the market value is for that skill-set. For us, how many times do you travel? If you only travel 5 percent versus 25 percent, right? There’s so many variables with compensation, and I’m just not ready to give it up yet.

Loren Feldman:
And you’re assuming that the word would spread?

Jennifer Kerhin:
I know. And maybe it wouldn’t, Loren. I don’t know.

Jay Goltz:
You’re not necessarily wrong. Listen, when you actually grow and you have a CFO or controller that makes more money, okay, that’s not a problem because they’re making more money. But when you’ve got someone on there who is not necessarily making more money than the other people, it’s tricky. I don’t blame you for being hesitant to give that up.

Jennifer Kerhin:
And it’s a different culture. You know, people under 30 are much more likely to share their salaries.

Loren Feldman:
That’s what I was gonna say. They all may already know.

Jennifer Kerhin:
Some of them do. Yes, definitely under 30. They’ve shared it. I don’t know if the people between 40 and 60 have shared it with the under 30s, right? And giving up? I don’t know. It’s the last vestige of me holding on. I think in probably less than a year, I’ll be ready to let it go.

Loren Feldman:
Shawn, did you worry about that at all? Was it hard for you to let that go?

Shawn Busse:
No.

Jennifer Kerhin:
[Laughter] That was quick!

Shawn Busse:
Yeah, I mean, 2008 was a really big reset for my company, kind of forced upon me by the recession. And I made a lot of really big decisions that were made easier, because I kind of had nothing to lose. And so when you’re in that kind of mind space, I think it’s liberating. And so one of the things I decided to do was to remove all the low-value activities from my life, and also outsource as much as possible. So it helped, in that we outsource things like payroll, which eliminated some of that friction back in that time.

And since then, we’ve gone to open-book management, and I’ve talked quite at length about this, in terms of my belief on compensation philosophy and making it far more transparent to eliminate a lot of those hidden frictions and backdoor conversations that are bad for culture. So for me, it’s been very liberating to not be focused on that for, I don’t know, 14 years or so. But that’s part of my just sort of ethos and mindset of A) not wanting to work on things that are low value, and B) eliminating things that are potentially troublesome for the culture. So that’s just been my approach, and I know that doesn’t work for every business.

Jennifer Kerhin:
No, Shawn, I hear you. And I’m very open-book transparent about the books of the company, you know, the financial aspects of the revenue and profit and stuff. But the last vestige, again, I know, it’s just sort of holding on to me. It’s controlling me, rather than me controlling it. And I think part of it, which I fixed, is because when we grew so fast, we had legacy employees who I had to figure out how to catch up to new employees with salaries. So that was hard.

Now I’ve fixed it. I’ve fixed it across, but I need to get to your mindset of transparency where I can justify—I don’t want to be like the government. Like, “Step one, you get this increase,” whatever, but to add the compensation to a higher level of transparency and let go of it, you’re at a higher-level plane of consciousness that I aspire to, Shawn.

Shawn Busse:
Well, I should caveat this, that the development you’re talking about took place more recently. Just like you, we went from closed-book financials to open-company financials. And then the second phase was to move to a more deliberate, transparent compensation program. That transformation happened, I think, starting around 2018. So it took a little while to get there, too. So in many ways, I think you’re on the same track that I was on. And I will say that, for me, at least in my experience, it was so liberating, especially in the hiring process, because we have absolutely eliminated negotiation as part of the hiring process.

Jay Goltz:
I fully agree with that.

Shawn Busse:
Yeah, it’s super empowering, because it shifts the employees’ brand experience. The hiring process is often really good and affirmational, and then you give them an offer letter, and then it becomes adversarial, right? Because then they’re negotiating with you, because generally the market is unfair to employees. And so they know they have to get as much as they can in that moment of hiring, because most corporations will take advantage of that employee. Recruiters will do that, and so forth. And so you take a really positive experience, and then it shifts to a negative experience—not only for the employee, but also for the employer.

Jay Goltz:
There’s no question. I’m 100 percent with you on that. And I’ll tell you what just happened. Now that I’ve accepted the fact you got to put the price on the ad now, no problem. So you put an ad out and you say—

Loren Feldman:
Not the price. You have to put the salary in the ad.

Jay Goltz:
The salary, yeah. You put the salary, $50,000 to $60,000. And then someone comes to you and says, “I’ve got no experience doing this, but I’d really like to have this job.” Okay, this is what really happened to me. And we offered her $55. She has no experience, so that was a very fair and generous and good faith offer. And she comes back and says, “Gee, I’d like to get $58,000.” And we said, “You’ve admitted to us, you have absolutely no experience in this job. We gave you the span. I’m starting to get uncomfortable. Maybe this isn’t the right job for you, because I don’t want you to work for less than you think you’re worth.”

And to her credit, she immediately responded and said, “You know what, I’m really sorry. I thought that was a very generous offer. My mentor”—quote-unquote—“told me I should ask for more money, and I wasn’t comfortable, but I took their advice.” And what I learned from that, I’ve got an easy solution to this: You tell people, “We’re gonna give you an offer. And I just want to tell you upfront, it’s not negotiable. If it doesn’t work for you, don’t take the job.” And that way, everyone’s off the hook. They don’t have to feel the responsibility for trying to get more, and it makes it clean. And that’s what we’re doing. And I think a lot of companies do that now. Just tell them upfront.

Shawn Busse:
I have a tiny tweak to that. In general, I’m aligned with you, Jay. That’s been very successful for us. One of the things I have to remind myself is that people are getting that advice in good faith. And they’re getting that advice because in 80 to 90 percent of the marketplace, they actually should do that, especially if they’re women, if they’re people of color, if they’ve been historically disenfranchised. And so, they’re being told: You need to negotiate for yourself, because there’s wealth inequality, depending on your gender and race, and that is real.

And so the piece that I’ve kind of changed, that’s a kind of nuance to what you’re saying, is we have a very specific framework that we use throughout the company. And we explain to the candidate: We cannot make an exception for you. If we give you an offer, we will not make an exception for you, because it would just disrupt the fairness that we have created for everybody else in the organization. So we give a little bit more context as to why we’re not going to negotiate with them. But in premise, we’re doing the same thing.

Jay Goltz:
No, no, I’m 100-percent with you. That’s a nice tweak, to just explain why.

Loren Feldman:
In recent episodes, I’ve been asking everyone how their business has been doing so far this year. I’ve already asked Jay and Shawn. How’s this year looking for you, Jennifer?

Jennifer Kerhin:
I think good. I actively slowed down business development last fall. My sales cycle is six to nine months, and I slowed it down because we had grown too fast. And I needed to take this year to solidify management, solidify our processes and our handoffs. And I made, for us, a healthy budget increase. I think it was 15 percent. And so far, we’re on track, [with the] budget. So it’s, I think, good. It’s not crazy great. But what we’re doing is making sure that we have a firm foundation to scale up for next year and the year after. So I would say good.

Loren Feldman:
How did you slow down your growth? What was the mechanism for that?

Jennifer Kerhin:
I would answer proposals: either deny a proposal, or I would put a price that was impossible for us to turn down. You know, we weren’t competitive. Or I didn’t actively go out. If someone reached out to me for an initial call, we might do the initial call, but then it would be slower response times.

It’s hard, because you don’t want to do too much, because you want it to come back. I don’t want to turn the faucet off completely. But I can’t have my staff drinking from the firehose three years in a row. We did it for two years, and we all knew it was an incredible opportunity. But I needed to slow down the fire hose. So I tried to do it where it is still a stream of water but that I had a lever to turn it back on last fall.

And I’ve done very little marketing. Last fall, I actively engaged a content marketing firm to help me that you’re going to see more of it—it’s started already in spring—and more of it throughout the summer and fall to hope that the sales, the pipeline, will pick back up.

Jay Goltz:
You left the biggest part out. You went to Spain for two weeks.

Jennifer Kerhin:
Yeah, I needed it.

Loren Feldman:
Jennifer, in any of those cases when you raised the prices in a proposal to a point that you couldn’t say no to, did anybody bite?

Jennifer Kerhin:
That’s a great question, Loren. One person did. And it was, instead of being a proposal from like A to Z, they said, “Okay, we’ll just hire you for X, Y, and Z, because we can’t afford A to Z.” So one did, but they took out the scope, so it lowered their price. And they did a lot of the work internally, and then we just did it. And to be honest, that sparked some ideas internally, that maybe we don’t have to do A to Z. Maybe we can be just as profitable if we do X, Y, and Z, and we could churn out more of them. So we are thinking internally whether that’s a possibility. So, one, out of several.

Shawn Busse:
I like that. I like the idea of giving clients choices, instead of a binary yes or no. Sometimes it can create new opportunities that you don’t always anticipate, and that’s really cool. What are you thinking in terms of like, specifically, what would you potentially give up? And what would you keep?

Jennifer Kerhin:
Yeah, we try to do that, Shawn, a lot with our customers, to say: We have a very intimate relationship with our clients. And there’s a lot of handoffs in convention planning. A lot. And so, there’s a lot of things that we have to ask questions on scope. Like: Are you going to do that? Are we going to do that? And we can say, “Look, if you want to save money, you guys should do X, or A, B, and C. And we can do X, Y, and Z.”

Sometimes they’ll say to us, “Well, why don’t you do A, B and C, and we’ll do X, Y, Z?” And like, that’s not gonna work, because we need to do certain things, or it doesn’t make sense for us to be involved. And that’s why our proposal process takes a long time. It’s a very long time to go through a scope of services for a fixed fee. It takes us a very long time.

Shawn Busse:
Yeah, that’s kind of been my experience as well. When you shift away from obvious product, solution, answer to more of a consultative sale and custom solution, you have to have a lot more conversations, the sales cycle gets longer, the variability on price is higher. So there’s just a lot of different dynamics to it.

Jennifer Kerhin:
Absolutely.

Jay Goltz:
As the customer, I would be impressed if somebody came and pitched me on whatever services and said, “Listen, if you’d like, you might have some internal people who could do some of this lower-level stuff, and you could just pay us to do…” I’d be very impressed that they were thinking out of the box and giving me options.

Jennifer Kerhin:
We try to do that a lot. Our association clients, these are long-term relationships. And so sometimes, it’s an association we have identified that will be a perfect fit for us, for our abilities, our staff, our culture. And maybe we need to start with just a basic sort of handoff. We help them, but we just do it at a small level that makes sense for their budget, makes sense for their staff, and then it can grow. I’ve seen that many, many times with our clients, where we pitch them. They ask us for A to Z. We give them that, but we say, “Option two is: We just do this. Or option three is even less than that.” And they’ve taken us up on that offer, and then they come back to us a year later, two years later, and have us do more and more.

Shawn Busse:
I’m wondering if you kind of have a similar dynamic. So, often the things that we do will overlap with an in-house marketing person. And the issue with the in-house marketing person is the skill level is all over the map.

Jennifer Kerhin:
Absolutely.

Shawn Busse:
So, is that same for you? They might have somebody who’s fresh out of college to very experienced.

Jennifer Kerhin:
Absolutely, and the timeframe of how somebody works, the nuances of how they like things. An experienced person, they can get things done faster, but they also might understand how to work with a vendor. A newer person, even if they take a little longer, doesn’t understand with a vendor how to have that partnership relationship. And so, yeah, we definitely see that a lot, Shawn. And those handoffs, let’s say there’s 10 steps, and we’re doing steps two and three and four and then also nine and 10. Well, once I finish my step, I need you to go back and do some more. Or I need you to approve it. Or I need you to do something.

Shawn Busse:
I’m wondering, in your industry, you probably interface with multiple people. But is there fairly high turnover? Or are they pretty long-term, in terms of those front-level, frontline employees who you work with?

Jennifer Kerhin:
I wouldn’t say there’s high turnover, no. But I’m not sure I’d also say that people have been there for a long time, because it’s based on the size of the association. For us, if it’s a smaller association, they hardly have anybody working on the convention. But that person, whoever is in charge, has probably been there a while. Where if you’re a larger association, you might have a couple people internally, and they actually might turn over more.

Shawn Busse:
Yeah, that’s similar. So we work with owner-operators. If there’s no marketing person, then that owner is often carrying that, or maybe their business development person is getting a portion of that. And there’s a lot of institutional knowledge. And then sometimes they’re larger, they’ll have some junior level people in there. But the problem is junior level people in a marketing role, I think I saw once that the average tenure is like 18 months. It’s like super, super short.

Marketers turnover like crazy at all levels. So that’s sort of a hidden cost a lot of people don’t understand in the marketing sphere, that marketers are impatient and want new things all the time, and so they tend to hop jobs. So that can be a real challenge for an owner. When we come into a space, they might have somebody who’s been on the job for two months and knows nothing. And very rarely is there somebody who’s been there for a long time.

Jennifer Kerhin:
And Shawn, do you find that one of the issues is your staff has more institutional knowledge of your client than the in-house people do?

Shawn Busse:
Oh, 100 percent.

Jennifer Kerhin:
And it’s awkward to say, “Well, you tried that years ago, and it didn’t work. So are you sure you want to do that?”

Jay Goltz:
What do you do if you’ve got someone who’s in-house, who you’re dealing with on that side, and they’re really either just incompetent, or they don’t return phone calls and emails? Do you hesitate to call the owner and say, “Listen, Bob, I hate to tell you this, but…” Yeah, I want to know, because I would totally appreciate it if somebody was honest and said, “Listen, Jay, I’m not there all day long. I just have to tell you, so and so, she doesn’t get back to us on time. She sent the stuff with three misspellings in it. I just feel like I owe it to you to tell you—” Do you stick your neck out and do that?

Jennifer Kerhin:
Rarely, Jay, for us. If it’s a coordinator-level person who’s our client, no. That coordinator is put in a position that needs help, right? And so, for me, I’ll say to the boss, “Hey, this coordinator is doing a great job trying. They might need some training and XYZ, but their personality is fantastic.” So depending on the level, if it’s a higher-level person, sort of a senior manager or above who really just is not capable, you’ve got to walk a really fine line. And I would say, it’s probably only 10 percent of the time that I’ve ever said to their boss—I might leave a few hints if we’re at a reception, having a drink, like, “Oh, what’s their plan for their career?”

Jay Goltz:
How many? Like three drinks? [Laughter]

Jennifer Kerhin:
I might say, “What do you think’s gonna happen in this department? What’s going to be with that person?” But it’s rarely I would get on the phone and call them and say they’re incompetent, because my experience is, ultimately, the loyalty is going to go to their staff, not to a vendor. At least that’s my experience. Shawn, you may have something different.

Shawn Busse:
It’s really interesting, the parallels. We’ve had really wonderful success with clients, when they’ve either just recently hired a coordinator-level person, or we help them hire one. That’s another role we’ll play, helping them figure out what is the right person to hire for the job so that they can get the work done and not pay a fortune for it.

When the real problem happens for us—usually, a senior-level incompetent person isn’t going to hire us. Because the senior, they’re going to sabotage us even in the hiring process. Because what they’re going to want to do is, they’re going to want to create sort of political power. And the way you do that—as a senior-level, incompetent marketer—is you fragment your vendor pool, so that it’s basically you’re in charge of everybody. And the owner has no insight into how bad it really is, because they never let an outside vendor gain that level of trust with an owner. That’s the most dysfunctional situation I’ve ever seen in my career. And it’s pretty rare, but I do see it. So that’s the worst.

The second worst is when an owner really should be hiring a coordinator-level person or an early career manager. And then they hire somebody who claims to be sort of a mid- to senior-level person. And then that becomes really difficult for us, because they then start to kind of engage in that sort of political power gathering. And they want to separate us from the owner, because they don’t actually want the truth to be told.

So that’s a really challenging situation that I don’t see very often. I’m very fortunate in that case. That’s why we’ve helped clients hire people. But every once in a while, I’ve seen a dynamic where an owner really doesn’t know the differences at these different levels. And it’s really hard for them to suss out legitimacy. So is this person a director level? Or are they a manager? Or are they a coordinator? Do you find that too, like people can kind of mask their skill-set within your space?

Jennifer Kerhin:
Absolutely. Jay, I would say for you, if you’re hiring a vendor, if you think, “I want to ask my vendor if one of my staff members…” Great. The better question is not to make it so emotional, but to say, “Hey, is my staff getting you what you need on time? Is my staff meeting their deadlines for you?” You know, ask questions that you’ll find the answers from.

Jay Goltz:
Yeah, I don’t use any outside thing. So I wasn’t really—

Jennifer Kerhin:
It was theoretical?

Jay Goltz:
I have a friend.

Shawn Busse:
It’s a good question. It really is. I mean, Jennifer and I are often in that position of like, we really want the owner to know the truth. We’re not sure how they will respond to truth telling. And we’re not sure about the allegiances.

Loren Feldman:
Well, Shawn, what’s the answer to that? What percentage of the time, when you do choose to be open and direct about a difficult situation, do you sense the owner does want to hear it, or doesn’t want to hear it?

Shawn Busse:
Man, I mean, I think like Jennifer, this is probably one of the most difficult situations to be in. When you want to have that candid conversation with an owner, it’s hard to know, because it’s so hard when you have internal politics, to know where you stand in that hierarchy. I think you have to build a lot of trust before you can have that conversation.

Jennifer Kerhin:
Agreed. I am doing a lot of work to sort of talk to myself about client management. What I always say is: You have to take emotions out of the situation, and you have to pinpoint just some items on it. So if one of my staff members is frustrated with something, well, what is it? Don’t put any emotion to it. What is it? And it usually has to do with approvals. Someone’s late to get something or something’s late with approvals. Okay, well, let’s talk about that. You know, is there a misunderstanding that we can’t move forward unless there’s an approval? We’re asking for approval, and we don’t really need to. Can we get back to the client and say, “Hey, client, do you really need to approve? If you approved the first one or the template, do you need to approve everything else? Can we just move forward? Hey, client, it seems like we’re taking a while with approvals. How can I help move this faster?” or whatever.

Because there are also times that I’ve seen my staff, they don’t understand all the things that are happening, at least in our world, that that person is also responsible for. They could be overseeing the convention, but they may have 20 other tasks that we don’t see. And so we may not be understanding what’s happening in their world. So for anyone that does customized proposals of sort of skilled work like this, client management is one of the biggest issues. And trying to defuse, like I said, by just putting it down into project management and understanding expectations are the two most important things, at least from my side.

Shawn Busse:
Yeah, I think the strategy that’s worked for us—and I claim no credit for this, it’s my team being way better than I am—because I’m way too emotional about it. I’m like, “This person is incompetent, we need to get rid of them.” [Laughter] You know, I’m an owner—

Jennifer Kerhin:
That’s funny. I’m the exact opposite, Shawn. I’m always like, “Oh, this person just needs fewer expectations or parameters, and they’ll be okay.”

Shawn Busse:
Yeah, see, this is why you’re better at this stuff than me. Where we run into problems is, say an internal person wants to embark on a strategy that we’re like, “That’s a bad strategy.” Like, we’ve either seen it not work multiple times, or we just know the client well enough to know it’s not a good idea, but they want to die on that hill. And so what the team has done really effectively is they’ve gone to the owner and said, “Hey, it seems like Bob really wants to do this thing. Let’s give Bob all the tools we can for him to be successful.”

And then we go do other stuff that Bob is not interested in, but that we know will help but help the owner. So we really separate what Bob’s doing and what we’re doing. And then Bob does his thing, and then we just wait. We just wait, because eventually, Bob will move on or the thing will fail. One of those two things will happen. And then we’re not in that kind of battle of trying to get the owner to see that Bob is doing the wrong thing. We just let it become self-evident, and that’s been effective. I would rather say to the owner, “You had a mishire with Bob. You need to get rid of Bob.” But it’s hard to have that relationship. That takes time.

Jay Goltz 33:26
Okay, I want to ask the opposite question now. Have you had a customer call you and say, “Shawn, I feel bad saying this. You know, Jim’s a nice kid and everything, but I don’t think he knows what he’s doing.” Have you had people give you honest feedback that has been helpful?

Shawn Busse:
About our team? Or about their team?

Jay Goltz:
No, about somebody who works for you.

Shawn Busse:
Oh, I’ve never let a client down, Jay. I mean, in 24 years? Of course. Yeah, of course I’ve had those.

Jay Goltz:
I’m on the other side of that, and I’ve had some really bad experiences with complete incompetence. And I’ve had to tell the company, and frankly, it was an accounting firm. They don’t really do anything. They don’t really want to hear it, I find.

Shawn Busse:
Yeah, so we had some of that problem. I call it the left hook, where like, “Whoa, we just got fired. What happened?” And this was some years ago. And so we realized that we needed to actually build a process to offset that problem. And so the process we built starts in the sales delivery, where we say, “This is what’s going to happen. Here’s who you’re going to be working with. And also, here’s your system of finding resolution when there’s a struggle.” So the system is, you go to the person you’re working with directly. You’re honest and candid with them. You tell them what the problem is.

If they aren’t listening or they’re not fixing it, now you go to our director of strategy and have that conversation. And if for some reason you can’t resolve that, here’s my cell phone. We’ll have a conversation. We set the framework there, and then we also build a backend system. So we put into new engagement a calendar of client check-ins from people who are not working on the account. So six months in, Andrea will call up the client and say, “Hey, client, let’s go to lunch.” They have a lovely lunch. They get really candid. “Hey, we really want your feedback. We want to know how things are going: good, bad, and other.” And then we do that again in a year. And so we just keep that flow going so that we don’t get the left hook. And it’s been amazing what that has done for client retention. We haven’t had a left hook in years.

Jay Goltz:
No, that’s very impressive. That’s smart, because that’s the way it works.

Jennifer Kerhin:
Shawn, that’s what I do a lot of, and I’m trying to figure out a process. Because right now, there’s not a process in it. I just check in with clients, and then I’ll go to the meeting: “Tell me what’s going right. What’s a pain point for you? What are we doing, maybe not at the B-minus level or the C level, that you want to see at the A level? Tell me what’s going on, to have an honest conversation.”

But it’s not process enough, I need to get to that system now. And that’s another reason we slowed down growth, is because I need to put some of those systemic issues in play, because I can’t keep track of all the clients. I can’t keep track of all that’s going on. And so you need to put those systems in place. It’s good you say that, because that’s definitely on my bucket list—not bucket list—my checklist to do in the next year, six months.

Loren Feldman:
We’re running short of time, and there are a couple of things I want to hit before we go. You told us recently, Shawn, about your experience at a big trade show in Chicago. I think you expressed a little bit of frustration, although it was a positive experience for you. I’d love to have you bounce that off both Jennifer—it’s her industry—and Jay, who’s a big proponent of trade shows. Can you tell us quickly what your experience was in Chicago?

Shawn Busse:
Sure, yeah. I mean, it was a huge show. Maybe there’s bigger shows, but it was huge. There were, I think, 800 folks who had rented booths. It was an automation show. You know, there were the booths that—

Jennifer Kerhin:
Shawn, was this the Automate Show?

Shawn Busse:
Yeah. You know that show?

Jennifer Kerhin:
I was there.

Shawn Busse:
What?! Do you run that show? Is that your jam?

Jennifer Kerhin:
No, but I was checking it out. Oh my gosh, that’s so funny.

Jay Goltz:
Jennifer, did we have dinner while you were in Chicago? I don’t remember.

Jennifer Kerhin:
The funny part is, they have a student day, and I flew my son in, because he’s a mechatronics major. They had a student day to go around and meet exhibitors that are hiring. How funny. All right, Shawn, I can’t wait to hear the issue. Go ahead.

Shawn Busse:
I wouldn’t say it’s an issue. It was just more of my observation that it’s a kind of haves and have-nots environment. So there are very, very big large players. There’s some mid-size people that I recognize from my hometown. And then there’s a lot of little booths, and it just made me realize that if you are a small business, and let’s say you can only afford $10,000 to go display, man, you’d better go in with a game plan. And if you just show up and have your little booth with your card table, your objects on the table, it’s going to be an expensive adventure.

And then, the inverse of that was what I watched my client do—which was freaking genius, you’ll appreciate this—he’s a private company who’s building an association. They had a happy hour. He gave a talk. It’s pay-to-play, too, so he had to pay for the talk. He had to pay for the booth. But it was really interesting watching that work so effectively and create community. And I think that was a really great place to be for him, because there’s so many people there, and a lot of people looking for a home, like looking for their people, so to speak.

So I’m just contrasting. You know, he’s a small business, probably less than 10 million. And there were other small businesses, less than 10 million. And what a contrast to see like good strategy, planning ahead of time, pre-marketing, post-marketing, content, thought leadership, versus I show up, I have a card table, and I put my stuff on the table. So that was basically my insight. For small businesses, this is a world of big frickin’ white sharks.

Jay Goltz:
As someone who’s been to hundreds of trade shows, I can tell you, the people who go to the trade shows and don’t put time and energy into doing a good-looking booth with something that says something when you walk by, and then, what are they doing in the booth? They’re either sitting on their cell phones, or they’re eating lunch. And it’s just really easy to walk by people when they’re eating lunch and not bother to go, “Hey, what do you do?”

So I’m always amazed that they spend all this money and you can’t even tell what they do for a living. And this happens all the time. Like, it takes some real expertise to do a booth that’s got one thing on it that when you walk by, you go, “Oh, you do blankety-blank,” and then have a person standing there to say, “Hey, can I talk about what we do?” instead of eating lunch.

Jennifer Kerhin:
A trade show is one aspect of a marketing campaign. And I would say the same thing to someone who, let’s say, wants to do print advertising or social media advertising or using influencers or social media. You have to think of the strategy first before you just start throwing things against the wall. So if you’re going to invest in a trade show, really figure out what your goals are and plan it.

And I think what happens is, no one would think to just—or maybe they do, I guess—start a huge marketing campaign of print and digital advertising and not think about it. Not think about: who the right people are to see this, what the messaging would be, how much the budget is going to be, what’s the follow-up going to be, what’s the call to action going to be?

And yet, sometimes trade shows get a bad rap, because people think, “Well, you can just put out a table and people will come.” And that’s not the same. You need to have the same strategic thinking about your trade show the way you do with other marketing campaigns. And with trade shows, sometimes the goal might be lead generation. Fantastic. But that’s just one possible goal for a company. Another one could just be that they need to show their presence there to current clients to show that they’re a player now, that they’re not too small. They can afford to be there, and they’re a player.

Another one is, they just take an exhibit booth because they want to speak, and maybe the trade show won’t allow them to speak unless they have a booth. And so their whole point is thought leadership, to get out there. There are lots of companies that do booths because they hope to get purchased by larger companies. And so they need to have a booth there, and they walk the trade show to find the big fish to buy them. There are many different reasons.

Jay Goltz:
Another one that’s important: You get reps. You want to get some new reps, and the reps are all at the trade show.

Jennifer Kerhin:
Absolutely, that’s workforce development.

Jay Goltz:
Absolutely. And if you don’t have a trade show booth there, you’re not getting the better rep. So it’s been a huge piece of the puzzle for us. I’ve got 17 independent reps around the country selling me to frame shops, and I’ve got the best reps in the industry. And you’ve got to have a trade show booth that they want to come visit and see some customers at. You’re 100 percent right. It’s even more complicated than putting an ad in a trade publication or anywhere. To your point, there’s lots of pieces to this puzzle that I don’t think they’re thinking about before they get there.

Shawn Busse:
Okay, so this is a wonderful insight you just shared with me. And I think about my experience years ago when I was at an ad agency, and these poor small businesses would—one of these TV reps or newspaper reps or Yellow Pages reps, who are paid on commission, they’d get their hooks into this small business and make this compelling argument for how they should have an ad in their publication.

And it was probably the worst thing that that small business could spend their money on, but they didn’t really know any better. And so they would drop $10,000 or $5,000 on this ad. Nothing would happen because they actually need a different channel, or more repeats, or a better message—all manner of problems. They drop their money. It wouldn’t work. And then they’d be like, “Blah, blah, blah, doesn’t work.” And it’s: Well, actually, it starts with this rep being motivated to sell on commission and not have your best interest at heart. And I’m curious, do you think that also exists in the trade show world? Like, are these trade shows selling small businesses that don’t know what they’re doing?

Jennifer Kerhin:
To me, it doesn’t start with the sales rep on commission. It starts with the owner, who should take a moment and say, “What should I be doing for marketing?” We’re all responsible for our businesses. And okay, so maybe they did the Yellow Pages for a couple years. Eventually, that person figured out, hopefully, that that wasn’t working. But they should have taken a moment, because anybody out there can sell anything for marketing. You, as the owner, need to take responsibility and think: What is my strategy here? There’s plenty of books, plenty of podcasts, and you can learn some basic marketing strategy. Or there’s consultants out there who can help you.

And you say, “Okay, I want to target this client demographic. Here’s my sales cycle,” and think through it. And at the end of the strategy, say, “Okay, trade shows are the best,” or do not even make sense. If I’m a local ice cream shop, TikTok might be the best way for me to get my message across. Trade shows, not so much, right? Whereas if I’m an automation company, probably TikTok’s not the best—maybe, I don’t know—but the trade show might be better. So I think it starts with the responsibility of the company owner with strategy. It has nothing to do with how advertising sales are commissioned or not, because it doesn’t matter. It’s your responsibility as an owner to figure it out. What I was saying is there are a lot more consultants out there for advertising than there are for trade shows. And that’s an issue to me.

Shawn Busse:
And that’s the issue. So it’s essentially the whole—I think it’s like the Warren Buffett quote, right? I should never ask my barber if I need a haircut. So this is my thing that I try to communicate to business owners. I agree with you, Jen, that it is their responsibility. But I think a lot of times they don’t know who they should be talking to. And so the media rep from the Yellow Pages will come with all this information about how this is the right thing. But it’s a biased perspective. It’s probably the same for trade shows, right? They shouldn’t necessarily be talking to the trade show exclusively, in terms of whether they should do the trade show or not. They need to find other sources of truth.

Jennifer Kerhin:
Right, Shawn. Just like the Yellow Pages ad rep, or a trade show sales rep, we’re not the marketing consultant for that company, right?

Shawn Busse:
See, but businesses think that—a lot of businesses use those vendors that way.

Jennifer Kerhin:
Why would they think that? Why would they ever think that?

Jay Goltz:
Let me tell you why. You’re both right. I’m going to explain to you why most retailers don’t have a clue. Where do they advertise? It’s exactly what Shawn just said: whoever called on them. That’s where they advertise. I always think, “Well, I wonder if I should be doing it over here or doing it there.” Most retailers, or a lot of businesses, the salesperson calls them. And I would tweak, Shawn, what you said just a little bit. It’s not that the commission is the problem. The problem is they have no expertise. They couldn’t help you if they wanted to.

Jennifer Kerhin:
That’s not their job.

Jay Goltz:
Right, I got it.

Jennifer Kerhin:
Their job is a marketing consultant. If you are unsure, as an owner, of where to spend your dollars or where to market your services or products, then you should get a consultant to help you on strategy.

Jay Goltz:
And I’m telling you the problem. It’s in the name of this podcast, 21 Hats. The problem is the other 20 hats are more screaming in their face: We’ve got to get more insurance. The delivery van broke down. The customer’s mad. The marketing piece gets pushed all the way to the back of the line. And they get attention when a sales rep shows up. And you’re totally right that they should be spending time on it.

Jennifer Kerhin:
Jay, I think the big issue to me is—and I see this a lot—small business owners confuse marketing and sales.

Jay Goltz:
Yes.

Jennifer Kehrin
They think that they can leapfrog over marketing and jump into just selling. And that’s why sometimes they think they can just sell at a trade show. And I’m like: I’m gonna take three steps back, four steps back, and say marketing goes first. Sales is a tactical maneuver that supports the marketing strategy. Do not jump into sales. Tell me what the marketing strategy is first and go forward. And I’m sorry, but that’s not the responsibility of the salesperson, whether it’s the ad sales, media sales, or trade shows.

Shawn Busse:
Well, so, here’s another problem, and you’re highlighting why this happens. I’ve seen this a ton. An owner hires somebody who’s a, we’ll call them a VP of business development or VP of marketing and sales, which almost always means they’re a salesperson. So what happens is, that salesperson will come to you and be like, “Hey, I think we should totally go to XYZ trade show.” And the business owner’s like, “Well, you’re my VP of business development.” And then they spend a bunch of money. I’ve seen this happen. This is like a broken record.

Jennifer Kerhin:
Totally agree, Shawn.

Shawn Busse:
They spend a ton of money. They go to the trade show. They come back. Nothing happens. And they’re wondering: Why does it happen? It’s because they go to the trade show thinking that sales will magically happen because they have a booth there.

Jennifer Kerhin:
Absolutely.

Shawn Busse:
And then, eventually, that salesperson gets fired.

Jennifer Kerhin:
I would say, for a small business owner, if they are not a thousand percent sure who their potential customers or clients are, the demographics of that, how they’re going to sell it, and where they’re going to sell it, then they should not be hiring a director of business development. They should be hiring a marketing strategist to figure that out first, and then they can do the sales and execute on it.

Jay Goltz:
I have a different theory. Most companies are not big enough to pay a competent business—what does someone who’s really smart cost? It’s well into the six-figure thing. My argument is: Like it or not, the owner probably needs to be the chief marketing officer, because if they’re in business, and they can’t figure out who their customers are? Really? They need to go hire a business development person to do it? The reality is, most companies are not big enough to afford a business development person. You tell me, Shawn. How much does that person cost? A competent person.

Shawn Busse:
$200,000, $250,000.

Jay Goltz:
Right. Most companies, the owner’s not making $200,000. The owner might be $200,000 a year. That’s the reality of business. Most companies aren’t big enough to do that.

Jennifer Kerhin:
Here’s what I would say: When you start a business, you have a product or service that you’re selling. And if you’re still an owner after a couple of years, that means you found somebody to buy your product or service. I think the issue comes in when they want to grow. So let’s say zero to a couple hundred thousand, if they’ve found enough people to buy it. It’s then when they want to grow, they need to take a moment and not just push on the gas on sales, but to take a moment and say: Do I understand my marketing strategy? And if I don’t, I need to hire a strategist to help me figure out how to get to 2 million, let’s say. Because I think what happens is, they think that the first couple hundred thousand, maybe up to half a million in revenue, they think they know it. And if they do, great. But if they don’t, then they rely way too much on sales and not marketing.

Jay Goltz:
You’re right. The problem is, in the real world, the typical person who’s doing a million and a half dollars, making a nice living, does not have the resources or wouldn’t know how to find that person. I’m going to say, in the real world, what usually happens is the owner needs to lead that, because it’s expensive. I don’t know that a million-and-a-half-dollar business can afford to go find that person.

Jennifer Kerhin:
They can afford a marketing strategist. They can absolutely afford a marketing strategist.

Jay Goltz:
How much is a marketing strategist?

Shawn Busse:
They can only outsource it, not as a role. They should not hire that role.

Jay Goltz:
What does it cost?

Shawn Busse:
I mean, you could outsource it for, I don’t know, $20,000 or $120,000, anywhere in between, depending on what’s being done. I mean, it varies widely, but you could get some great advice for 20 grand. And that would be things like customer segmentation, offering pricing. That would be a start. They’re not going to do the work. It’s going to be more of an assessment and validation. And then, that’s why I have this big range of $20,000 or $120,000. Once you start to get into, “We need them to do work. We need them to develop the brand. We need them to create assets. We need to create a thought leadership model.” Like, now you’re getting more expensive stuff, but you’re combining lots of different roles, too, so you should not hire it in-house.

Jennifer Kerhin:
I agree with Shawn. It’s not a full-time employee, at this point. You just need a way to direct your resources.

Jay Goltz:
That’s fine. It’s a nice theory. You’re totally right in theory, and I’m sure in a lot of cases that works. But most entrepreneurs in the growing stage are too small to spend that kind of money.

Jennifer Kerhin:
He needs to read some marketing books.

Jay Goltz:
Right, absolutely.

Jennifer Kerhin:
And listen to the 21 Hats Podcast.

Jay Goltz:
Yes, no, I fully agree. Yes, sometimes you just have to learn it yourself.

Shawn Busse:
I mean, that’s why I wrote the book Marketing From The Inside Out. Basically, I saw a problem for the sub-million-dollar businesses. To Jay’s point, it was really hard for them to hire us to do the level of work that we need to do to move the needle. So I just put it all in a book. I’m like, “Here you go. It’ll be hard, but you can try it. Here’s all of our proprietary stuff.” And so, when I meet those guys, I just give them the book. And you know, maybe one day they’ll come back and be $3 million or $5 million, and then do it at the level that we’re working at. But there’s some truth in that. That chasm from like $200,000 to a million or 2 million is really, really hard. Often you don’t have enough margin. You haven’t charged enough. You haven’t learned that you’re under-charging. You know, one of Jay’s favorite themes. And so you’re kind of stuck.

Jennifer Kerhin:
I don’t disagree. I just think, overall, at that level, too many company owners are thinking sales will solve the issue, sales execution. And I want to say to them: Sales goes second. Marketing goes first.

Jay Goltz:
You’re not wrong. You’re not wrong at all. I’m just suggesting, in the real world, I’ve got PTSD from the people I’ve hired over the years, one bigger disaster than the other.

Shawn Busse:
I think what that sparks for me as a thought—and also what sparks for me from what you said, Jennifer—is the skills that owners need to develop in these early stages are: one, an appreciation and value for marketing positioning and customer; and then, two, discernment, the ability to find people who can help them, who are going to really move the needle forward. And that’s super hard. To your point, Jay, you wasted a bunch of money on these hacks, right? That’s discernment. And as you get more experience, you get better at that. But I think that’s where listening to shows like this is really helpful or getting mentors, if you’re in that early stage, getting folks who you can kind of shortcut to discernment skills. Because I’ve hired terrible people too. We’ve all hired terrible people.

Loren Feldman:
My thanks to Shawn Busse, Jay Goltz, and Jennifer Kehrin—and to our sponsor, the Great Game of Business, which helps businesses use an open-book management system to build healthier companies. You can learn more at greatgame.com. Thanks, everybody.