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Carl Gerhardt

Business Sense & Sensibility

By Carl Gerhardt

About Carl

Carl Gerhardt is the chairman of Alliance Franchise Brands LLC, the parent company of Allegra Network LLC and Sign & Graphics Operations LCC, and a world leader in marketing, visual and graphics communications, linking more than 600 locations in the United States, Canada and United Kingdom. The company’s Marketing & Print Division, headquartered in Plymouth, MI, is comprised of Allegra, American Speedy Printing, Insty-Prints, Speedy Printing and Zippy Print brands of marketing, printing, mailing and Web services providers. Its Sign & Graphics Division, headquartered in Columbia, MD, is comprised of Image360, Signs By Tomorrow and Signs Now brands of sign and graphics communications providers.

Carl and his wife, Judy, owned and operated their own successful Allegra franchise for nearly 20 years before selling the $2.3 million operation in 2003. He is a PrintImage International/NAQP Honorary Lifetime Member and was inducted into NAPL’s prestigious Soderstrom Society in 2010 in recognition of his contribution to the industry.

 

The Deadly Law of Attrition

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Have you heard of The Deadly Law of Attrition? If not, I may shock you with this statement: You are going to lose your best customer. It’s not a matter of if; it’s a matter of when. My first boss told me this when I was a young, successful salesman. He was eventually promoted, and I got his job as a sales manager. He then said, “You are going to lose your best salesman.”

He was educating me about what he termed The Deadly Law of Attrition. He was successful both as a sales manager and eventually at running the entire company that employed us. He succeeded because he realized attrition will catch up to every business unless you understand how to manage it. Here’s what to do:

You must first understand its dynamics. Sure, you might go years without losing a key customer or valuable employee. However, the odds aren’t in your favor. In my last blog, I wrote about losing customers and how the best marketing plan is to do all in your power not to—until you spend big to find new ones.

The best way of defeating the deadly law is to always be recruiting. It’s just common sense when we are talking about customers. We should always be selling because we want to grow. We should also be selling to fill the normal loss that occurs when customers close, move or, God forbid, go to a competitor.

However, we too often fail to recognize the threat to our key employees. Lose a key salesperson or customer service rep that clients know and trust, and panic sets in. If you are fortunate to be in a company large enough to have multiple sales people, consider keeping your sales team in training at all times. The sales manager I mentioned at the beginning had a team of 15. At any given time, he had at least two people in training. He was prepared when someone either left or was underperforming. He used that to leverage the Deadly Law of Attrition to his advantage. We knew that by failing to make quota for a few months running, we were most likely on the “replacement list” and that he had someone waiting in the wings.

In our printing firms, we don’t have the luxury of having a “bench” in training to replace the loss of a key employee. What we can do is always be recruiting. We should be on the lookout for potential employees for every position in the company. The best people to hire are those not looking for a job. How nice it would be to have a file with names and resumes of great candidates who are working at other companies—even for competitors—who we would want to hire.

Make managing The Deadly Law of Attrition a part of your business plan. It’s just business sense and sensibility.

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