The Peanut Butter Kid

Occasionally on Saturdays when I am home during the summer my wife and I go to an outdoor European Market. It really is a place where their are booths that sell produce, meat, cheese and other unique items… I don’t think anything is from Europe except maybe the concept!

This past Saturday, Sandy and I made a decision that we would drop by the market but focus on the few vendors that we frequent and obtain a short list of items.

As we are walking for vegetables, we hear a young boy recruiting us to come to his booth and learn about the best peanut butter in the world. As we approach he is exclaiming a dozen different flavors. Candidly I didn’t know peanut butter came in different flavors.
Wow! His fifteen second pitch was captivating and convincing. The maker of the peanut butter allows this young person to sell her product at her booth and donates two bucks a jar to his soccer club.

The peanut butter tastes like nonother I have tasted. It’s eight dollars a jar, two for fifteen. And the jars are small. I really didn’t care about the cost of peanut butter and neither would you.

This boy is personable, knows his product and had confidence! The next time I go I’ll videotape his pitch. You’ll be amazed like I was. Now go out and sell your peanut butter off!

It amazes me how many companies have no idea what their projects cost. The other day I was interviewing a seasoned concrete expert who has been in the industry for over twenty five years and he told a story about how the company he is working with now, is the first one to ever perform detailed job costing.

Up until working with his current company customer pricing was done by what the market would bear, square foot pricing and guessing. No wonder so many of the companies he has worked for are no longer in business.

Job Costing is actually an easy task that will provide a break-even number that guides you to where the selling price should be. It can be achieved in many ways, preferably with some automated software. An Excel spread sheet is a great place to start!

It easy fairly easy to achieve a “true cost” and determine a project break-even which is the starting point I recommend. Once you master that you can decide how exacting you want to be.

If you would like to have a discussion about your costing practices, no matter what stage you are in please feel free to give us a call.

Guy

Our family wishes you a safe and pleasant Memorial day; and while we are enjoying things like hot dogs, apple pie, and the Indianapolis 500, we want to take a moment to solemnly remember all of our fallen military along with those who unselfishly continue to serve our country. We appreciate the sacrifices all our service members and their families make while we continue to enjoy the freedoms they protect!

Last week I was going to St Louis and when I arrived at the gate at Midway Airport I stoped at the counter to check how full the fight was. Usually Southwest has very full fights but this was my lucky day. The agent told me their were approximately 35 open seats and when I told her I was already A16 we agreed I need not upgrade. I was checking some emails on my laptop when I was summoned back to the counter by the gate agent.

STRANGE!

She handed me an envelope. I asked what it was inside and she said she wan’t sure, so I decided to open it on the spot.

Inside was a Thank You note from the three terminal mangers for Southwest. Their was also a SW luggage tag and a business card holder that adhesively attaches to your cell phone. Two mundane give-aways but they were SW branded. The Thank You was hand written and very thoughtful. Two morals to the story; first always remember the power of a hand written thank you note! Secondly, while other airlines were making news for disturbing passenger interactions, my airline was personalizing notes and giving away trinkets to their best customers. I’ll bet the total cost was under $2.00, but it was the personalized thought in an industry that has all but forgotten great customer service. Thank you Southwest for anther great experience.

The new Mazda Miata RF is a statement by Mazda about reinventing as classic brand with a totally new design. This is our first Mazda and we were lucky enought to lock in a “Launch Edition”.

Their is more to the story than a completely resesigned model that has a 25 year history and sold over one million Miata’s. It is a sales story about customer satisfaction and reoccuring purchasing!

The branding is unlike anything I have experienced in the many new vechicles we have purchased in my lifetime. We have purchased at least six new vehicles since 2011. Not one company communicated with us after the purchase except for a “product recall notice”.

Since we have purchased  the Miata RF we received and awesome Tourneau watch which was part if the launch addition.

Just the other day a smartly boxed package about the size of a paperback book arrived with a message from the CEO welcoming us to the Mazda family. It included other information about the history of Mazda along with other information on how to download their phone app and some information about other accessories and warranties. None of it was presented as trying to sell something.

So far we love driving the little car even though it only has a thousand miles on it, we are preparing to drive it from Orlando to Chicago on its first long road trip. Some owners may polish and garage their RF, not me, I’m going to do my best to wear it out. If all goes well I’ll buy another one in a few years and a hundred thousand miles from now.

If They Can Do It So Can You1

A few years ago, I bought some really nice diamond earing for my wife while we are on a cruise. I had heard of the jewelry store before and they had a decent reputation so I was not uncomfortable buying the earing out of the US. Besides they were duty free, right!

I admit that I haggled pretty hard and in my opinion made a phenomenal purchase. This was confirmed during an embarrassing moment at our local jeweler who noticed Sandy’s new ear sparkles. He is a super honest man and confirmed we made a great buy that he could not match.

But the story isn’t about the purchase of the earrings. It is about what happened afterwards. Inadvertently I must of filled out a form that listed our birthdays and anniversary. And yesterday was my birthday and the store owner called to wish me a happy birthday. Just like he does for Sandy on her birthday and our anniversary.

This is a high-volume jewelry store on the island of St. Kit so the call was probably a little pricier than your USA unlimited plan. The call was a sincere, happy birthday. Not trying to sell us anything or even an innuendo of a solicitation. But it was thoughtful! And we would definitely consider another purchase from them. I am even going to write a “trip advisor” post because I am so impressed with the customer service follow-up.

In the world of sales this was a luxury purchase not a necessity. We differentiate this by the term Gold Medals verse German Sheppard’s. I have to ask when is the last time you called a customer just to say happy birthday or happy anniversary. Do you even know when their special day is?

If not, find out and start building more sincere relationships. It will pay off with long term loyalty.

Watch your thoughts for they become words.

Watch your words for they become actions.

Watch your actions for they become habits.

Watch your habits for they become your character.

And watch your character for it becomes your destiny. What we think, we become.

My father always said that… and I think I am fine.

–Margaret Thatcher

The Friday March 22 edition of the Wall Street Journal contained a nice surprise for us. The front page of the Marketplace section had the following headline “Plywood Becomes Hot Item as Housing Market Recovers”. What a breath of fresh air.

Not be a political but I lean toward skepticism regarding official government statistics. The WSJ article and mention of potential plywood shortages in the near term was the first legitimate sign of a housing recovery I’ve come across.

We need the housing market to recover. It is starting. Next we need the job market to recover. The commercial real estate market is not going to heat up significantly until employment gets going and more companies need office space.

We have a long ways to go but the sun is finally starting to break through.

Note from Ron: We have a guest posting today. The post is not a sales piece however I believe they offer a great service.

Healthcare reform is here to stay. The short answer to “Does healthcare reform apply to me?” is: YES.
Large Employers: Employers with 50 or more full-time equivalent employees are required to provide health insurance for their workers or face fines (which can range from $2,000-3,000 per employee)beginning in 2014.
Small Employers: On prevailing wage jobs, large contractors with the mandate for coverage will have a lower payroll burden than small contractors because they are using the fringe to pay for health insurance. And don’t overlook the importance of attracting and retaining talented workers – they will be looking for jobs which provide health insurance.
Individuals: All individuals are required to have health insurance beginning in 2014. Those who do not will face penalties which will be included on their income tax returns.
Plus, providing benefits to your employees is the right thing to do. Coverage provided with fringe dollars is paid with pre-tax money and employees who are not covered at work must be underwritten on their own and pay potentially higher rates with their after tax dollars. You have fringe dollars specifically earmarked to provide benefits and significant payroll and insurance costs savings when you do.
You have just over a year to get into compliance with PPACA (also called the Affordable Care Act or ACA). The good news? As a government contractor working on prevailing wage jobs, the funds to cover providing health insurance for your workers are already there – included in the wage determinations!  In addition to avoiding penalties, when you use the fringe portion of the prevailing wage to provide benefits like retirement plans or health insurance for your employees, these dollars are not subject to payroll burden. This can result in significant savings over the life of a project.
Some contractors may believe the fringe to be “the employee’s money” but this is not so!  The fringe is an employer contribution; therefore, the employer is in the driver’s seat when it comes to deciding how to allocate it. Letting employees know that the decision to use the fringe for health insurance is a healthcare reform requirement may ease their objections to not receiving the fringe as cash.
There is no doubt that the ACA and all of its new regulations add a whole new level of complexity for government contractors who already have to worry about prevailing wage laws. Paying fines in addition to the expense of paying fringes as additional cash wages is a double hit on your bottom line. Can you afford to take that hit? If other bidders are benefiting from savings on payroll burden and you’re not, will your bids be competitive?

Contractors can no longer afford to wait on implementing the new mandates. It’s time to start figuring out how to price in the additional costs for bids you have already won and those you are bidding on right now. What if your company currently has less than 50 full-time employees, but the project you just won will take it over 50?  Now what?  There are many, many questions around implementing the ACA. Fortunately, The Contractors Plan, powered by Fringe Benefit Group (an ABC Business Partner), is prepared to help government contractors understand the new legislation and how to comply with the multitude of new requirements. Fringe Benefit Group has specialized in providing quality benefits for prevailing wage workers for more than 30 years and we are fully prepared to help contactors navigate the maze of health care reform.

About the author:

John G. Allen, CRPS, is a regional vice president for Fringe Benefit Group, which has been helping government contractors design and administer fringe benefit programs since 1983.  He can be reached at 800-635-6912 or jallen@fibi.com.