Am I Behind the Times? November 15th, 2021 Last week, I attended an in-person event that featured a presentation followed by time for networking. For many of us, it was the first time in a long time we were at such an event. That become obvious when the networking started after the presentation. Most of us struggled to find business cards. It became quite comical as people searched wallets, coat pockets, and purses for business cards. It is not hard to exchange a virtual business card with your phone. The crowd I was with was generally middle aged, so it was above most of our technological abilities. I think there is something to giving an actual physical item to someone. Handing someone something, even a simple business card, is a powerful gesture. We all like to receive things and we all (ok, most of us) like to give things as well. To prove my point, it is well documented that we spend more money with credit cards than with cash. Why? Because we have a physical attachment to money that is not quite the same with a credit card. We live in an increasingly digital world but we still need to be physically connected to other people and our world. Business cards and print are not going away anytime soon. Or maybe I am behind the times, along with the people I was with. I hope not! Posted in Brian's Blog | Comments Off Focus on the Sunshine November 8th, 2021 Last week, we had our first blast of cold weather. Temperatures barely cracked forty degrees, the gray skies seemed endless, and there were even a few snowflakes. It was a rude awakening to the coming winter. People were in fowl moods. Fortunately, the system was just a quick introduction to winter weather. This past weekend, temperatures were in the mid 50s and the sun shined like it was the summer. People were wearing shorts. My buddies texted about golfing. The weather change was not terribly significant nor unexpected; this time of year, the weather changes quite a bit. The change in people’s attitudes was palpable. Everyone was in a good mood. Our environment has a bigger impact on us than we think. It feels like the challenges of the last two years have everyone in a malaise. In the environment we find ourselves in, it is easy to forget that humans have thousands of years of progress behind us. It is a safe assumption that progress lies ahead as well. Do not let the seemingly endless negativity we are inundated with from both sides bother you. Focus on the sunshine. Posted in Brian's Blog | Comments Off Price is Powerful November 1st, 2021 UPS released its third quarter earnings last week. A key highlight: The delivery company’s third quarter revenue rose 9.2% from the prior year to $23.2 billion, as the average revenue per piece UPS shipped increased 13%. The number of items it shipped daily fell 2%, marking the second consecutive quarter that shipping volume fell after a roughly a decade of increases. (Emphasis added.) https://www.wsj.com/articles/ups-revenue-rises-as-it-ships-fewer-packages-11635247610?mod=business_lead_pos3 From the press release, revenues were up 9.2% year over year and operating profit was up 23.4%. That is fantastic operating leverage for any business. For the US, revenue was up 7.4%, driven by a 12.0% increase in revenue per piece. UPS does not break out its mix in its press release but it is very clear, it charged more for the packages it delivered in Q3 2021 than it did in Q3 2020. My guess is the 2% volume it lost was business that was not very profitable in the first place. With supply chain and labor issues, spending resources on unprofitable business is a death knell. https://investors.ups.com/_assets/_9d8ff13b41f334eac231ad0a188f3945/ups/news/2021-10-26_UPS_Releases_3Q_2021_2058.pdf Raising prices is never fun. Most of us do not operate in industries where there is essentially a duopoly like UPS and Fed Ex; we face more competition than they do. But the reality is, raising prices is one of the most effective levers businesses have to protect and increase profitability. In the inflationary environment we are in, making sure you have margin is essential to survival. Posted in Brian's Blog | Comments Off Service Still Matters October 25th, 2021 Our son had a long weekend last week. We took a short trip. The hotel we stayed at had a prominent sign in our room that read, “We perform cleaning service every day and turn down service every night unless you ask us not to.” Since covid started (really, since the great recession), many hotels have taken the opposite approach: you need to opt in to get your room cleaned. For us, part of the attraction of going on vacation is service, like having the bed made and bathroom cleaned without having to lift a finger. Of course, it costs an arm and a leg but so does everything else we like to do. I have shared my story with a few friends and I know at least one person booked a room at the hotel we stayed at because of our experience. Staffing is challenging. Input costs are rising. The path of least resistance is to cut service levels. The path to differentiate your business is the opposite: improve your service and customers will reward you with their money. Posted in Brian's Blog | Comments Off It’s 1982 Again October 18th, 2021 Last week, the Social Security Administration announced it will increase payments to beneficiaries by 5.9% next year. That is the largest increase since 1982. For those of you in denial of getting old (like me), that was 40 years ago. I almost cried when I read that. I remember 1982. The same day the SSA announced its increase, the consumer price index (CPI) was announced at a 5.4% annual rate. I (and many others) have argued for years that the CPI calculation grossly understates real inflation. A safer car is a good thing but it still costs more in dollars than a car did years ago. The government adjusts for product improvements in ways that I find questionable. If I concede that CPI is accurate, the social security cost of living adjustment is essentially canceled out by the rise in prices. Likewise, firms are starting to announce raises for 2022. My gut tells me raises will be in line with inflation. Unless inflation starts to moderate soon, I expect people to start to notice that they have less spending money than before. Energy (up 25% over last year) and food (up 4.6% YOY) costs are a big part of most people’s spending. If those costs continue going up, expect discontent from the general public. That will not be good. Posted in Brian's Blog | Comments Off How Are You Connecting With Your Customers? October 11th, 2021 We recently purchased a new washer and dryer. Like everything else these days, it is wi-fi enabled. We can start washing clothes from our app! The app can’t get the clothes in the machine. Yet. The washer and dryer come with some preset programs but to get the full suite of programs, you need the app. At first, I thought that was a little annoying. Then, I realized the genius behind having programs you can only use on the app: the manufacturer is getting real time data from customers on how they use their machines. And the manufacturer is not paying for market research. Brilliant! (You can opt out from sharing data but that requires an additional step.) The business to consumer world has always had numerous steps in the sales channel: manufacturer to distributor to retailer to the consumer. The feedback loop for product changes worked the same way in reverse. That cycle is rapidly changing right before our very eyes. How are the changes going to affect your business? What are you doing about it? Regardless of what business you are in, you better be using technology to connect with your customers. More importantly, you better be taking action based on what your customers are saying. Posted in Brian's Blog | Comments Off Alcohol shortages? Supply Chain Disruptions are Getting Real! October 4th, 2021 I vividly remember a conversation I had with my older brother during the first few weeks of the shutdown last year. We were joking about the run-on toilet paper and he said, “As long as we don’t run out of alcohol, we’ll be fine.’’ We laughed and I assured him I had enough wine in my house to make it through a prolonged shutdown. He reminded me that he is not much of a wine drinker. I reminded him that beggars cannot be choosers. I also thought there is no way I am wasting my good wine on someone that does not appreciate it. Well, here we are over a year and a half later and we have alcohol shortages. A lack of liquor bottles is being blamed. No supply chain is immune from the challenges we face with shipping, raw materials, and labor. https://www.wtol.com/article/news/local/national-liquor-shortage-affecting-toledo/512-5e335147-ef88-4f0e-a5c8-dde5f24403a1 When you are in the middle of the storm, it feels like there is no end in sight. The supply chain challenges are “transitory” as the Federal Reserve wants us to believe. Of course, no one has put a stake in the ground and said what transitory really means. My crystal ball is hazy but my best guess is six to nine months before things start to normalize in most supply chains. In the meantime, remember the line from the great philosopher, Homer J. Simpson: “Alcohol, the cause of and solution for, all of life’s problems.” It’s 5 o’clock somewhere. Posted in Brian's Blog | Comments Off Is FedEx the Canary in the Coalmine? September 27th, 2021 FedEx released its earnings last week. The stock went down as a result of an earnings miss and a disappointing outlook. From the press release: First quarter operating results were negatively affected by an estimated $450 million year over year increase in costs due to a constrained labor market which impacted labor availability, resulting in network inefficiencies, higher wage rates, and increased purchased transportation expenses. This was partially offset by higher package and freight yields, increased international export express shipments and a favorable net fuel impact. In addition, while commercial ground and U.S. domestic express package volume increased year over year, continued supply chain disruptions have slowed U.S. domestic parcel demand compared to the company’s earlier forecast. (Emphasis added.) For more comments about the labor market and supply chain challenges, I encourage you to read the rest of the press release linked here. You can read about FedEx’s price increase and additional surcharge. https://investors.fedex.com/news-and-events/investor-news/investor-news-details/2021/FedEx-Corp-Reports-First-Quarter-2022-Results/default.aspx Those of us that do not work for the Federal Reserve have been experiencing labor challenges and supply chain disruptions daily for months. At some point, a lack of people to fill jobs and a lack of goods to buy will create an economic slowdown. If that plays out, companies will be paying more to attract workers (rising wages = good, lower profits = bad), consumers will be paying more for everything (inflation = bad), and interest rates are still around zero so the Federal Reserve does not have a lot of leeway to cut interest rates. Oh, and the knuckleheads in congress are talking about a massive tax increase. Buckle up. The next few quarters are going to be a little bumpy. Remember, chaos creates opportunity. There are going to be a lot of opportunities to improve your business in the next few months. Get ready! Posted in Brian's Blog | Comments Off Be Leery of the Nanny State September 20th, 2021 Hudson, Ohio, is a very affluent community. Its schools have an excellent reputation. Recently, an assignment given in a high school English class in Hudson has sparked outrage. The students were given a book titled “642 Things to Write About” and told to choose a topic. Topics included: “Choose how you will die. Write a scene that begins: ‘It was the first time I killed a man.’ Describe your favorite part of a man’s body using only verbs. You have a dream that you’ve murdered someone. Who is it, how and why did the murder happen, and what happens afterward? You are a serial killer. What TV shows are on your DVR list? Why? The kill fee. https://www.cleveland.com/akron/2021/09/hudson-mayor-craig-shubert-parents-call-for-resignation-of-hudson-school-board-teachers-after-students-receive-book-of-inappropriate-writing-prompts.html Parents, the mayor, and other community leaders have called for the resignations of teachers, administrators, and the school board. One parent quoted in the article linked above stood out to me: Erik Dirker, a police officer with the city of Stow, called for the school to install cameras in classrooms at the board meeting. “Police officers wear body cameras to monitor their behavior, and they have brief interactions with the public. You guys have our kids all day and we don’t know what’s going on in the classrooms,” Dirker said at the meeting. “I demand that there be cameras in classrooms as a matter of public record that we can pull and view what is being taught to our kids and what is being said to our kids,” Dirker said at the meeting. (Emphasis added.) Wow. The parent in me thinks he has a point. The libertarian in me is scared beyond belief. We have accepted cameras in most public places. But in every classroom? Americans have long celebrated and defended freedom. I might not agree with your choice but I respect your right to make your own decision. I do not want cameras watching everything and allowing decisions to be second guessed. The world already has too many Monday morning quarterbacks. Placing cameras everywhere will only make things worse. Posted in Brian's Blog | Comments Off Take a Moment September 13th, 2021 It is hard to believe that it has been twenty years since 9/11. As I heard one pundit say, “That is almost a generation ago. It is turning from a memory to history for many people.” The memories of that day remain fresh in my mind. My mother calling us in Chicago and telling us what happened. Spending the day with a business school friend whose brother perished in one of the towers. Wondering if colleagues I had worked with that summer were OK. Despite all of our challenges, the United States remains a special place. We have freedom to question our government. We have freedom to debate each other. We have opportunities others do not. Take a moment to remember the good about our society today. Take a moment to do something good today. Honor those that died on September 11, 2001. Posted in Brian's Blog | Comments Off « Older Entries Subscribe to Brian's Blog! Or enter your email address to get updates by email: Author Brian Gale is the president and majority owner of I.D. Images, a leading pressure sensitive label converter headquartered just outside of Cleveland, OH. Since Brian joined I.D. Images in 2003, the company has more than tripled in size. Brian completed a successful management buyout of...Read more » Posts Brian's Blog (597) Pages About Brian Gale Top Products Direct Thermal Labels Integrated Labels Link To Me Copy and paste the following code onto your site to link to my blog! <a href="https://briansblog.idimages.com/" ><img src="https://briansblog.idimages.com/images/brians-blog-link.png" border="0" alt="Brians Blog"></a> Go to www.idimages.com » Brian's Blog uses the WordPress blog software. Stay Updated With My RSS Feed » © 2015 I.D. Images | Back to www.idimages.com