Business must always take appropriate measures to offset the effects of complex economic times. Layoffs and downsizing are common and expectable, as are cuts to `nonessential´ expenditures. Unfortunately, staff training is too often considered a dispensable cost.

In an October 6 2003 article for MacLean’s Magazine, Paul Wells outlines his frustration with poor or non-existent customer service. His variety of bad experiences highlights the dearth of caring and dedication shown by employees with a variety of organizations.

Think you’re above it? A survey published in 2001 indicates that over 67% of customers accessing services across a variety of business types (retail, financial and service) are up for grabs and of those, fully 40% will choose another provider if – or when – they find better customer service elsewhere. This holds true even when price is not comparable. In short, people arefor sale by owner selling tips

The worse case scenario is that 67% of your clients actually do go across the street for better service. Can you afford that loss? Can you afford the lost of even 5% of your customer base?

Back to those `non-essentials:” In the context of difficult economic times, without question spending money on training may seem an imprudent path to choose when seen simply as an expenditure. The usual comment is “We´ve had a tough year/two years, and can´t spend that money right now.”

But with a significant number of acquirable customers — that 67% or so — and the probability of retaining your current client base via excellent service practices, training expenditures must be considered as relatively inexpensive business boosters.

Consider this: you choose to spend training your staff on effective customer service or sales practice. Over the next 2 months, you can expect to retain the 2 –5% of clients who would have normally gone elsewhere in the short term, and to acquire an additional 2 – 5% new business.

Simply retaining 5% of your customer base translates into an increase in profits of 25% and often substantially more. Add to that a further 25% increase through new business acquisition. Now that is an excellent investment in your business, not an expense.

In order to maximize your investment in training, there are a few important guideline items to be aware of. These include good analysis of your company´s strength and weakness areas, research into training providers and, more specifically, into the trainer themselves. Secondly, consider how the training program addresses your organisation´s needs and whether the program can be tailored to fit the specific needs of your company.

A simple way to know how well you´re doing in your customers´ opinions is to ask. By providing short, well worded and specific questionnaires to your clients, you will easily understand where you are succeeding and where your company can improve. Another method is to simply install a suggestion box, which will provide you with external (client) and internal (staff) opinion. If you are not already providing some method of feedback for both clients and staff, you are missing a mass of excellent and useful information.

Researching trainers and training companies is time consuming but is an essential step. It is certainly possible to buy poor training, so limit that costly possibility through good research.

Most trainers and training companies are accessible via the Internet, where you will find their background information, location, and pricing in most cases. Always consider word of mouth referrals, too; such opinions are independent and come from direct experience with a trainer or company.

A mistake some companies make is to avoid independent trainers. Choosing large company or one with a large number of contracted trainers does not necessarily ensure quality of training. Many independent trainers provide excellent training and are more flexible in what they can and will do for you because they are not constrained by a parent organization.

Once you´ve decided on two or three possibilities, direct contact is in order. You´ll need to know specifically how the trainer and their program relate to your company´s identified needs. You will also ask how targeted that company or trainer can be with their presentation and how willing they are to customize their training to your goals. Finally, ascertain if the trainer is available on your schedule, whether they will train in-house using your company´s facilities, or whether you will require outside space.

Keep in mind that although a trainer may not be intimately familiar with your product or service, a good trainer will do good research into your product, market or service prior to meeting with you and training your staff. Ask them what preparation they will do in order to meet your needs. Request a trainer´s resume or bio for additional information on their background, their education and their experience.

This sleuthing is important and necessary to finding the best provider for your needs. A generic presentation will provide a basis of training, but a presentation that speaks directly to your company´s needs and goals will offer your employees the greatest advantage. The material will make sense and will be much more memorable and accessible.

The next question will be cost. Our tendency is often to choose a product based on price. Where all other things are equal, price is an appropriate deciding factor. With training, however, price is rarely the best point of decision. There are wide cost variances in the training market, and higher cost does not guarantee greater quality, nor will low cost indicate a substandard product. Consider each trainer´s or training company´s overhead costs: the larger the company, the higher those costs and you will be paying those costs regardless of training quality or trainer experience.

Finally, set a date to meet with your choices. If it is not possible to meet face-to-face, conduct a phone interview. If you can meet in person, ask that the trainer bring the materials they intend to present. If you contact is by phone, ask for samples of their materials a table of contents or their complete manual if they are willing.

Normally, you will see their manual or similar training materials, and copies of any handouts they will provide to your employees. Usually, trainers will not leave copies with you, as some unscrupulous companies simply take those materials and attempt to provide training themselves.

Finally, establish dates, timelines, expectations and contracts. Make sure all expectable costs are covered in the contract. These will include:

• Trainer´s travel, meals and accommodations
• How many days will you be responsible for the above costs
• Program name, duration, date and location
• What materials will be provided to your employees
• Whether your trainer will bring the necessary hardware (projectors, screens, overheads, computers) or if you will provide those items.

Each trainer or training company has different costing methods, so be sure you are familiar with your responsibilities.

Lastly, consider training as an ongoing process. For a variety of reasons, training must be a regular, predictable occurrence. Certainly in terms of staff attrition and changes, who has and has not been trained will change from year to year. Also, as businesses grow and information is gathered, internal Best Practices will change to meet the needs of your customers and your internal structure.

Most importantly, consider training as a way to generate internal and external good will. Staff whose organization’s support their learning and growth are much more likely to remain with that company. Customers who receive the benefits of working with your well-trained staff are much more likely to stay with you company and to bring you more business. All round, training is an excellent investment in the strength and growth of your company.

Julie Vincent can be reached via email.

Julie Vincent is a professional trainer and adviser with over 15 years experience in sales, marketing, administration and business. She has contributed to a variety of in-person and print business forums, and trains in the areas of administration, customer service and professionalism

Jim McBride is the president of Affiliated Warehouse Companies, headquartered in Hazlet, New Jersey.

Affiliated handles marketing, sales, and third-party logistics for public warehouses across the US, as well as in Canada, Puerto Rico, Mexico and Europe.

Affiliated acts as an intermediary, helping customers find affordable solutions for their warehousing needs with a client roster that even includes HAZMAT-certified facilities and freezer storage.

Affiliated Warehouse Companies has been in business since 1953.

Jim came on board in 1969 after a stint as a Merchant Marine and some time spent working for a midwestern steamship company.

While in the steamship business, he witnessed the growing use of containers for storage of large quantities of goods. These containers would then be hauled to public warehouses for storage prior to distribution.

Spurred by this trend, Jim subsequently joined Affiliated. He began purchasing the company in parcels beginning in the late 70´s, and by 1991, he had bought out the original owners totally.

Jim´s 32-year-old son, Patrick, is involved in the company as well. He joined the firm nearly 8 years ago, and Jim claims that Patrick was a motivating force behind getting Affiliated online. The result is http://www.awco.com

Affiliated was no stranger to technology, however. Jim says the business had been using computers since 1979. A familiarity with high-tech solutions made the decision to expand on the Internet a no-brainer.

Jim and Patrick were quick to realize that a web site would make a powerful addition to their marketing strategy.

“There were no PC´s then [in 1979], there were only mainframes. There was no canned software, either! We´ve brought computers into the business far earlier than most other companies our size, and we did it because I believed in the importance of database marketing, which is computer-driven.”

“We had advertised nationally and internationally in trade publications, we went to trade shows and exhibitions and mailed out our own directories.

When Patrick took an interest in the Internet, he said `your generation is used to finding warehouses that way, but there´s a whole new generation of people who are going to turn to their keyboards, and we´ve got to be up there.´ And he was exactly right.”

“The Internet is now a very important part of our international marketing program. We were doing international marketing before the Internet, but now we definitely have total international exposure.

We´re getting requests from warehouses throughout the world: Germany, Turkey, Indonesia, Singapore… all over. It has strengthened our international marketing efforts to a huge degree.”

As many business owners know, timing is everything. While Jim was getting his company online, a new business trend began to emerge, and Affiliated stood to reap the rewards of their early presence on the web. That trend? Outsourcing.

“The whole time that we were working towards a web site, another thing was occurring which was purely coincidental. Companies began to outsource functions: accounting, sales, and most importantly outsourcing their warehousing and distribution.

Consequently, these companies didn´t really understand our industry and didn´t know where to find us. So they turned to the Internet, and they found us.”

“Many of the calls that we now get are from companies that have never used warehousing in the past, but they are beginning to outsource that function. Our decision to get involved with the Internet was greatly enhanced by this trend.”

While returning customers may opt to contact Affiliated through mail, phone, or fax, the web site has become the main entry point for new customers, who often find Affiliated just by doing a simple web search.

The site features both Affiliated and their clients, and if the client has a website for their warehouse, that site is linked.

Jim still advertises in trade publications, but he also spends the money to guarantee Affiliated´s search engine rankings will keep them at the top.

He commented that, recently, he has noticed that search engine placement has become a more expensive method of advertising recently. He blames the failure of Internet banner ads: as fewer online businesses purchase banner ads, search engines have lost a great deal of revenue, and now they are trying to recoup lost dollars by raising the prices of other services, such as site ranking programs.

The production of the Affiliated website was outsourced to a professional web designer, who also happened to be a good friend of Patrick´s. They´re happy with their current site, but anticipate an update in the future, which will include more information about the company and its services, along with a change in the site´s look and feel.

Affiliated´s site is set up for ease of use, even by first-time customers. Jim and Patrick made sure that their interface was not only easy to use, but allowed their customers to customize their experience in order to get the information that suited their needs.

“When a warehousing user contacts us on the Internet, he has the ability to enter all the product specifications into our site, which we can then download and pass on to our clients. Or, he can bypass us and hotlink directly to a client. That´s the level at which the rates and quotes are generated.”

While users have the option of contacting the warehouses directly, a function made particularly easy thanks to AWC´s clickable map interface, most users—particularly those new to warehousing—opt to go through AWC because Jim and his team can provide helpful information about what type of facilities are available and help them find the warehouse that best suits their needs.

This type of value-added service is what helps keep AWC a leader in their industry.

“Many first-time users, for example, aren´t going to know that the facility they´re looking at may specialize in cold storage or storage for HAZMAT materials.

Our involvement with the industry, in addition to marketing and selling, extends to consulting.

We consult for the industry and our consultations are free of charge. People without any knowledge of public warehousing can call us because we can counsel them on what is normal and ethical, what the rules and regulations are, and what to expect when they read a contract.”

Currently, the company is conducting a survey to find out what percentage of their client warehouses are online. While most of their communication with the warehouses is handled by fax, Jim hopes that they can soon begin managing all correspondence via email.

Once the results of the survey are in, he´ll have a better idea how quickly he can proceed. As with many of our previous profile subjects, Jim is in the position of being an early adopter of technology in his industry, and he may find that he will be forced to wait for his clients to catch up.

When we asked them how they felt about their Internet strategy in retrospect, if they wished they hand handled anything differently, Jim replied that he felt that their initial attempts had lived up to their expectations.

“We could have thrown a lot more money into it, but I really don´t think the returns would have been different than they were, so we didn´t. We got involved in this very early on. We´ve been up on the web for about 7 years now.”

Jim feels very strongly that, for companies like his, the web site should reflect and augment more traditional advertisements; it isn´t– and shouldn´t necessarily ever be– a stand-alone element.

And, as with other forms of advertising, they want to be sure that their warehouse clients understand that Affiliated´s marketing efforts, including the web site, are responsible for generating the sales that are keeping them in business.

“Our web site is nothing more than a full page ad in the Yellow pages, or a full page ad in a trade publication. It´s nothing more than our own print directory that we send out.”

“When our clients tell us that a customer came to them via our web site, we publicize that in our newsletter. We want out clients to know that WE know that they´re getting calls as a direct result of our website or our directory or our trade publication advertising. We call that Intangible Sales. We were a vehicle for the sale, but the lead did not come directly from us.”

“It´s our job to promote our clients, and it´s also our job to promote ourselves and the value-added efforts that we produce for our clients. They know that `hey, there´s every reason to believe that we may not have gotten this inquiry if not for some function that Affiliated did.´”

But cutting edge technology is no substitute for a solid and lasting reputation: “The name Affiliated Warehouse Companies has been on the street for almost 50 years. Some of our clients have been with us for over 40 years. We seek stability. We understand our customers and their needs.”

Jim warns that businesses like his can never be pure-play dot coms, and for that reason, they should approach their web presence as an extension of their advertising and marketing strategies, rather than looking to the website to generate revenue for the company on its own.

“If you´re using the Internet and nothing else, you´re in for a tough time. Your web site is just a different form of your directory, a different form of direct mail, a different form of trade publication advertising. It´s nothing more than a marketing tool, plain and simple. What gets us in the door with customers is our integrity, our honesty, and our professionalism.”

Jim McBride can be reached via http://www.awco.com.

Profiles of business owners respected in their industry appear in our newsletter and are available on our web site. We encourage association executives to tell us about their members who are leveraging their inherent advantages (trusted brand, excellent service, etc.) by embracing a “doing it right” attitude into their strategy for growth.

Introduction:

Shadowing is a technique in which a person wishing to learn a skill follows and observes another while that person´s expertise is being displayed.

It is a common developmental tool across business and industry today.

However, it is often a weak, generic experience rather than the robust one it should be.

This is because we misapply an old idea within a new context.

That new context is today´s business environment. The misapplication usually involves the learner following the role model around for a period of time. It may involve some targeted event, but not always.

It seldom involves including the learner in the life cycle of the experience (before, during, and after the shadowed event), or in collaboration with all of the participants in the event.

What is a shadow? It is a vague shape that silently, unobtrusively follows you as you go about your business. Not surprisingly, this model seldom leads to new learning. There are several reasons for this:

• The deep conversation and hands on experience that are critical elements for mastery of complex skills that are missing here.
• The learning is seldom shared beyond the “learner/coach” dyad.
• The “learning” is often left to the observational, deductive and intuitive capabilities of the learner. Unfortunately, the learner is almost never psychic.
• The role model frequently is someone who does not have a teaching plan, and who may or may not be an adequate coach. Unfortunately, subject matter expertise does not automatically translate into strong teaching skills.

Today´s business environment:

In today´s world of networked organizations, disruptive technologies, customer/supplier alliances, information overload and continuous change, learning and professional development remain crucial; it´s the shadowing approach that must evolve.

For a learning process to be most effective in today´s business environment, it should include:
Real time learning

• In situ—as the work unfolds
• In real time – quick feedback and conversations where the ideas can be explored
• On-going conversation about the work
  A culture that supports dialogue and inquiry
• A process where ideas are shared and learning is not one- directional
• A process where the “whys” behind the decisions are explored and challenged
• A process where the group is conscious about its collective thinking and takes responsibility for getting better at it over time

The total individual involved in the learning:

• Anticipation skills – the ability to anticipate multiple contingencies
• Planning skills – the ability to develop working plans without slavish dependence upon them
• Contextual understanding around the event is a critical part of the learning
• Experiential learning
• Processing experiences by talking with other participants, making tacit knowledge explicit
• After action analysis and review
• Practice and rehearsal

Reworking the shadowing process:

If we rework the shadowing process to enhance its value as a teaching/learning process, then shadowing can become a thought partnership that can be customized to accommodate the readiness of the student and the needs of the enterprise.

A considered, deliberate approach can create learning at the individual level while fostering a culture of inquiry in the business. One process can simultaneously create learning opportunities for:

• Individuals
• The individual/coach dyad
• The action or project team
• Group learning
• Organizational learning

The reworked shadowing process:

In the shadowing process suggested here, collaboration is built in at many levels. For one thing, the students´ current level of experience should determine their level of involvement in the learning assignment.

Additionally, we can break the work done into three discrete phases: the pre-event preparation, the learning event itself, and the post event analysis. This interplay of experience/level of involvement can be thought of as a matrix, depicted in figure 1.
Fig.1 The Shadowing Process

The student and mentor then collaborate to ensure that the student´s participation in the three facets of the learning event is dictated by the learning opportunity, the complexity of the tasks and the readiness of the student to absorb the lessons. In this way:

• The learner is involved to the level of his/her capability
• Partnering to create successful learning is expected, but the onus for learning is on the student
• Certification of learning is a joint effort where teachers are expected to showcase the growth (new competence) now owned by the student.
• It is expected that everyone can teach anyone and everyone is expected to learn.

By actively partnering to make the learning experience as rich as possible, the student and mentor can use the learning opportunities to generate the rich experience and robust conversations that are most likely to produce learning. Contrast this with the “watch what I do and maybe you´ll learn something” approach taken in the old model of shadowing. Some examples of learning opportunities associated with each phase of the shadowed event are depicted in figure 2.

Fig. 2 Learning Opportunities by Phase

In this way, on-going conversations, tailored to the readiness of the student continue throughout the life-cycle of the learning assignment and provide for real learning to continue long after the shadowing event has passed. Authentic dialogue, partnering around the work and the expectation that everyone can learn from anyone make this approach well suited to today´s business environment.

Daniel D. Elash, PhD. can be reached via email or at http://www.syntient.biz.

Dan´s Doctoral Degree is in Psychology from the University of Kansas. Dan´s consultative expertise includes, leadership development, strategy, developing organizational thinking skills, enhancing the company´s ability to deftly implement its strategic intent. Dan is a speaker and teacher who places strong emphasis on developing social innovation in client organizations. His consulting client base is diverse, including industrial, retail, financial and service companies.

10 Questions to Guide Your Customer Relationship Management Strategy

A few years ago, I was speaking with a friend who is a senior executive at a large restaurant franchise. The conversation went something like this:

Executive, “We´re thinking about investing in a CRM program, what do you think about that?”

Me, “Sounds great,” but I knew that they had very slim margins, low revenue per transaction and many transactions. “How do you expect to justify the marketing and technology costs?”

Two years later we´re still not sure if there is a good answer to that question.

Be careful about taking the advice of that over-zealous salesperson, consultant, marketer or systems-integrator. CRM is not for everybody.

The issues that my friend has been dealing with, coupled with all the stories of “CRM gone bad” has led many people to ask the question…

Is CRM Right for My Company?

It´s a fair question. But because of all the misinformation still in the marketplace, the answer can be elusive.

At the most fundamental level, every company has customers. And every company should maintain some basic information about those customers (names, addresses, purchases, contracts, invoices, etc). Therefore every company should have at least some basic “CRM Technology” to track and serve their customers. Even small businesses use Outlook, Quicken or other applications for this purpose.

But for purposes of this discussion, we are going to define CRM as “targeted mass marketing.” That is, having a large number of customers and/or prospects whom you want to selectively communicate with depending upon their preferences, past buying patterns, demographics or other information.

Given that simple definition, companies that are not trying to communicate in a way that is both large scale and targeted can walk away from CRM.

For the rest of the world, there are 5 key questions you should ask yourself:

(1) Am I trying to communicate with a large audience of perhaps 500 or more individuals, on a consistent basis (4 times per year or more)?

(2) Will I be able to benefit (lower my costs or increase my revenues) by addressing that audience through direct channels such as snail mail, email, web, telephone, salesperson or point-of-sale?

(3) Will customers or prospects gain additional value if I personalize how I communicate with them and provide my products/services to them?

Personalization can start as simple as using a name on direct mail, but should eventually include customizing how you serve customers throughout their relationship with you. The benefit to the customer is that they receive more value out of the relationship. The benefit to you is that customers become more loyal and less likely to leave.

(4) By analyzing customer and prospect information can I learn things that will help me become more efficient and effective?

This is not survey or focus group data, but detailed data such as transactions, sales stage, segments and demographics. Your goal is to leverage this data in a way that makes your sales more targeted, relevant and personalized allowing you to get customers faster and keep customers longer.

(5) Is the data used to analyze, segment, personalize and target customers available?

This last one can sometimes be difficult to answer. Ask yourself three more questions to bring clarity: (i) Do I already have data about customers and/or prospects on one or more systems? (ii) Is this data spread across different systems (i.e. sales, accounting, service, marketing, Internet) that would be more valuable if it were in one place? (iii) Can I cost-effectively either bring this data together or start to collect it?

The more of those questions you answered with a firm “yes,” the more likely you are to benefit from CRM. If you comfortably answered “no” to all of those questions, then focus on fine tuning other ways of getting new customers and serving existing customers – you´re not likely to get much value out of CRM.

If more than one or two of your answers are “maybe,” then sit down with someone you trust to be objective and experienced and try to firm up your answers.

Once you´ve made the decision that CRM is for you, it´s not a matter of deciding to do it. You need to understand …

Which Flavor is Right for You?

It can actually be tougher to decide where to start your CRM project than it is to decide if you should do it at all.

Should you organize all of that data that is in different systems? Should you streamline your sales pipeline with better processes and technology? What about personalizing your web site, measuring your direct mail efforts and segmenting your customers?

The one answer that is certain to be wrong: “All of the above.”

While all of these areas may seem to have some value to offer, attempting to go after all of them at once is one of the key reasons for those “CRM gone bad” stories I mentioned earlier. Your job will be to prioritize and arrange those projects in a meaningful sequence.

Here again there are a few key questions you can ask yourself that will point you in the right direction. Answer each of these questions with a list of one or more communication channels (i.e. sales force, direct mail, email, web site, call center, telemarketing, etc):

(1) Where are you having the greatest volume of customer interactions?

(2) Which channel is most important in driving revenue into your organization?

(3) What data do you have readily available, and through which channel could you apply it in order to influence customer behavior in the near-term?

(4) Which channel can you most easily influence (i.e. in many organizations it can be tough to get past gatekeepers for certain communication channels).

Look for patterns in how you answered questions 1 through 4. If you see a lot of opportunity in your sales group, then make it a priority to streamline the sales pipeline process. If direct mail is critical to your lead generation or customer communications processes, then focus on database marketing. If the Internet is a popular channel with your customers, then consider personalizing it for each customer, tracking it, and collecting click stream data.

There is one more question you should ask yourself. It is usually for companies that have become more sophisticated in managing and using customer data. But it is important in that it can lead to a significant competitive edge. So I include it here for your long-term thinking:

(5) Will custom tailoring your products, services, prices or other areas of your business operations to meet the personalized needs of each customer result in greater customer loyalty / profitability?

Those two sequences of 5 questions are a starting point for making rational decisions about CRM investments. Although the answers do not always come easily, spending time on them will lead to customer relationships that are longer lasting and more profitable

Summary and Helpful Hints

• Don´t jump in too quickly. Just because a competitor is “doing CRM” or a salesperson is selling cool technology is no reason to leap in. Decide if it is a good match for your business before investing.
• Go for the “low hanging fruit.” Discover which area of CRM can deliver value the fastest and focus on that – don´t try to do too many things at once.
• Get help. If you think CRM is for you, but you have little expertise, then find an objective outside expert that can help.
• Take it slowly. CRM can be thought of as an evolution. There is no final destination, and you will continue to fine-tune even your best processes and technologies. Break projects into affordable pieces that can be delivered within 2-5 months.

Geoff Ables can be reached via email.

This article, written by Customer Connect president Geoff Ables, was originally published by the American Marketing Association in “The Source.” Article is © 2003, Customer Connect Associates, Inc. If you have any questions regarding your CRM goals or would like to partner with Customer Connect, e-mail Geoff at ables@cust-connect.com, or call us at (704) 947-5653.

Technorati Tags: change management, crm

(Shelf) Life of Reily: Food firm quietly marks 100 years of pantry presence

By Ronette King, business writer for the Times-Picayune.

This is the time of year the folks at Reily Foods Co. start planning their summer assault on heat and thirst.

The English may have their bone China tea services, but Southerners and the makers of Luzianne iced tea blend have long known that one key to surviving the steam bath of summer in the South is with a tall glass of iced tea.

Reily´s marketing push this time of year helps secure Luzianne´s place as one of the best-selling iced tea mixes in the country.

Reily Foods is also the maker of what some consider the mother of all coffee and chicory blends, CDM, plus other coffee blends roasted for sale under private store labels.

But to dismiss Reily Foods as solely an iced tea and coffee maker is to overlook the pantry of goods the company makes. In the past century, the quiet New Orleans company has amassed as many products as it has years in the food business.

Among them: Abita Springs bottled water, Wick Fowler´s chili mixes, Blue Plate mayonnaise, Luzianne tea flavorings, La Martinique salad dressings and Swans Down cake flour for people who still bake from scratch.

While many of Reily Food´s products are well-known, the family-owned company is decidedly low-profile. And the family likes it that way, declining requests for media coverage of its various brands until this, its 100th anniversary.

Reily has survived for a century by changing the way it does business to suit the modern demands of grocery distribution and selling. To keep up with today´s challenges, Reily is navigating an industry that has shifted from regional mom-and-pop stores to national supermarket chains that demand fees just to let items take up precious shelf space among the 32,000 items an average supermarket carries.

A smaller manufacturer such as Reily Foods can remain viable if it´s able to meet consumers´ desires, said Stuart Armstrong, vice president at Euro RSCG Meridian, a marketing consulting firm in Westport, Conn. The company can play up its authentic New Orleans heritage and tastes to connect with consumers.

“Regional brands understand things other than the specific product,” Armstrong said.

´Clear as a bell´

Reily was founded in December 1902 by William B. Reily, a wholesale grocer from Monroe, pictured on the company´s 100th anniversary pamphlet in dapper summer attire of straw hat, white jacket and white mustache.

Today the company is led by his grandson, Boatner Reily III. Boatner Reily´s son, Bo Reily, heads the Abita Springs Water division and, like his father, wears a gold ring bearing the family crest.

Jim McCarthy, no relation to the Reilys, is company president. They share a quiet confidence in their products, many of which are regional favorites that may be unheard of outside their market areas.

One product that is available almost universally is Luzianne iced tea, whose name was derived from “Louisiana.” It was made famous 25 years ago by spokesman Burl Ives´ intoning of the pitch: “Clear as a bell all day. The right tea for iced tea.”

The competition tried to sell their product for hot or iced tea, Boatner Reily said, but Luzianne is just for iced tea.

“Mr. Lipton makes a great glass of hot tea,” he said, adding, “But if you want iced tea …” He then rapped his knuckles on a table in the company´s Magazine Street headquarters as if to say “this is where you come.”

Reily Foods´ business breaks into three broad categories: roasted coffee sold under the company´s brands or private labels of grocery stores, Standard Office Coffee Service Co., and various food products including tea and bottled water.

Standard Coffee, another family business, began as a home delivery coffee division. In 1967, it shifted to delivering coffee to offices and businesses and has grown to become the largest such service in the country.

Quiet success

Figuring out how big Reily Foods is can be difficult, and executives at the privately held company like to keep a low profile. In 2001, the most recent year for which figures are available, Reily had sales of .7 million, according to published reports.

“I´m not going to say a thing about sales,” McCarthy said when asked to confirm that figure.

Likewise, Reily declined to share the number of locations where his company´s products are sold, describing it only as “over 50 and under 100,000.”

“There isn´t a grocery store in the U.S. that doesn´t have one of our products,” he said.

Reily Foods is concentrating on expanding product lines, figuring the key is to grow revenues without eating into sales of existing products. “It´s a challenge. How do we continue to grow, not only in coffee but in tea?” McCarthy said.

In the tea area, that means selling tea flavorings alongside the regular and decaffeinated tea mix in stores.

A year ago, Reily introduced the company´s latest product, Luzianne Smoothie Blends, a dry mix packaged in a plastic canister. Luzianne smoothie mix is available in Louisiana, Florida, Texas, Colorado, Arizona and California, places where there are lots of smoothie shops and high recognition of the drinks, McCarthy said.

This year the smoothie mix is being sold in new envelopes placed in supermarket produce sections, conveniently near the bananas, strawberries and other fruit that can be added to make a blender full of smoothies.

That´s the sort of cross-marketing grocery retailers are looking for these days and what helps Reily keep its products on the shelf.

Thinking regionally

Throughout the 1990s, the rate of consolidation and failure among grocery chains in the U.S. was staggering. The number of grocery distributors has been winnowed down as well, leaving just three major national distributors. One of them, Crossmark, represents Reily products.

Distributors are key to food manufacturers because they get products on grocery aisles.

Think of grocery shelves as limited real estate that everyone wants a piece of but where only so many people, or in this case food manufacturers, can fit. Ultimately, McCarthy said, consolidation has simplified things for his company.

“Consolidation has been good for the whole industry because it´s simpler to deal with one instead of 50 brokers,” he said.

But it makes for tough going for small and mid-sized manufacturers, said John Kramer, who heads a marketing firm in Stanford, Conn., that works with grocery retailers and manufacturers.

“The problem is if you´re a regional brand, (the major food distributors) are focused on the large brands,” Kramer said. “So you´ve got to offer your distributors as well as retail customers a reason to merchandise and support your brands versus competitors.”

Smaller manufacturers can offer grocers an edge as they compete locally. While big manufacturers have to market their brands nationally, Kramer said, “Reily just needs to understand the consumer or customer proposition at the local level.”

Reily Foods “has strong regional brands at a time when grocery stores are trying to differentiate themselves in any way possible,” Kramer said. The way for grocery retailers to compete is by appealing to local tastes.

Reily sells some of its products regionally; Blue Plate mayonnaise is sold in five Southern states, for example. But Luzianne tea is sold nationally.

Branching out

Another expansion of Reily Foods came in 1996 when the company acquired a majority interest in Abita Springs Water Co. Reily has acquired other small firms since the 1960s, when the company decided to diversify beyond coffee and beyond New Orleans.

In 1965 Reily Foods bought JFG Coffee Co., based in Knoxville, Tenn., increasing coffee production capacity and adding mayonnaise and salad dressing to the company´s pantry.

In 1974 Reily acquired Blue Plate, a best seller in the South. McCarthy had been president of that company before the acquisition.

In 1990 the company bought Caliente Chili from Procter & Gamble, maker of Wick Fowler´s 2 Alarm chili seasoning mix. The following year, Reily bought Carroll Shelby´s Original Texas Style Chili from Kraft Foods.

Reily´s future will come from increasing market share of existing brands and pursuing acquisitions limited to “items related to what we´re in now,” McCarthy said. So the company wouldn´t get into, say, refrigerated products but would look for other dry goods.

Is Reily an acquisition candidate? “We´re hoping to acquire other people rather than being acquired,” McCarthy said. “We´re going to continue to grow. If we don´t grow, we could be vulnerable.”

As a corporation, Reily Foods gives a high-profile assist to the Crescent City Farmer´s Market, allowing the market to use the parking lot at company headquarters on Magazine Street on Saturday mornings, rain or shine.

Otherwise, Boatner Reily said he likes the low-key approach to running his family´s business. Until its 100th anniversary, the company was reluctant to even discuss all the company´s products as part of one newspaper story.

After a cordial interview about the family business in which he declined to offer sales figures or size of distribution network, Reily said, “We promise we´ll talk to you in another hundred years.”

This article originally ran in The New Orleans Times-Picayune, April 9, 2003

Ronette King can be reached via email or at http://www.timespicayune.com.