Bernie's Batteries!

"Bernie's Batteries"

Transcript (for general use only – machine-generated and it may not be accurate)

[00:00:00] Dave: I always thought big: take no prisoners, slay the dragon. It works sometimes, but it's risky and often fails. Did you ever get the directive to go find a 20% cost savings? Grow Sales by 15% add 10% to the bottom line? And do all of this by some unreasonable date? What if you got the same directive to go find just one percent? Would that be easier, a little less stressful, more doable? Yeah. I see you nodding your head. I'm watching you. I can watch it through the internet, you know? So what would you rather do, go for 20% or go for 1%? The answer is both!

Today's episode. Bernie's battery. How one, man, with a big brain taught 5,000 managers to think small and win.

[00:00:52] Intro: Hi, I'm Dave and I'm Kelly. And this is My job here is done.

If you really want that next promotion. Or you're a rising star entrepreneur. We have some stories to tell that will absolutely help you. I've been starting and running businesses all my life, and I've worked for the man, like a dog for decades, together, we'll share stories, ideas, and notions that will help you absolutely soar past that cruiser sitting next to you. And if you're grinding forward with your growing business, we know where the landmines are. Let's find them. It's only about 20. What do you have to lose? Nothing! Or everything?

[00:01:38] Dave: Hi there. And welcome back to the program. I'm Dave, and this is the lovely and talented Kelli. And my job here is done. Well, almost. We've got about 20 minutes. We've got a really interesting topic today. If you'd like to learn more about the show, please head over to our website. My job here is done.com, that's all one word. My job here is done. Don't put any spaces in or anything silly like that. My job here is done.com and you can learn all about the show, right?

[00:02:07] Kelli: Check it out. So this is the one about Bernie's Batteries. Say what?

[00:02:13] Dave: Yeah, And for those who don't remember the original radio shack stores stay tuned for a helpful notion. And for those who actually went to a radio shack store more than a few times like Dave yeah. This should bring back a few memories.

[00:02:28] Kelli: So I think everybody remembers radio shack. I was the first like consumer electronics store. Yeah. And a household brand for decades. There was a radio shack in nearly every strip mall.

They had sort of a nerdy reputation once. Yeah. You know, I know you spend a lot of time there, Dave. They were a different kind of store when they first got started. So like, like a lot of businesses, they had a complicated backstory. I looked up their history a little bit and found out that they started out in 1919, and they grew to over 7,000 stores internationally.

Rewind to the fifties when they had a dozen or so stores in the Northeast of the United States.

[00:03:12] Dave: Yeah. They were just growing back then.

[00:03:13] Kelli: Yeah. And in 1959, a pots and pans sales guy, Bernie Apelle from Boston joined radio shack as a buyer. And over the years, he worked hard and got promoted and eventually became the president and chairman of radio shack from 1984 to 1992.

[00:03:35] Dave: He actually earned the name. Mr. Radio shack is I remember him. Everybody would call him Mr. Radio shack. Wow. He was the face.

[00:03:42] Kelli: You must make a lot of contributions to be called Mr. Fill in the blank. So RadioShack had a good run, but unfortunately in 2015, they filed for chapter 11 for a variety of reasons.

[00:03:56] Dave: RadioShack was a huge brand name. Uh, that, that everybody remembers

[00:04:02] Kelli: Dave has an interesting story because not only did we go there as kids with our families, Dave eventually had a job there.

[00:04:11] Dave: I had about with failure in my early business ventures and I was absolutely positively flat broke had to get a job, anything to survive. And it's kind of the entrepreneur in somebody who starts a business, but then fails. There's a lot of. Uh, remorse. There's a lot of kicking yourself in the head. There's, you know, you just got to get your mind. Right.

[00:04:37] Kelli: Right. But when you're done with that, you keep going on

[00:04:40] Dave: working in a McDonald's was certainly not beneath me. I would have done anything. Right. But my tech background and kind of love for anything that had electricity you know, flowing around it or through it prevented me from learning the popular phrase. Uh, would you like fries with that? So I got a job at radio shack as a sales dude. I remember walking into the store and meeting the store manager who seemed to be pretty surprised that I was applying for a job. And I actually asked him his name was Wayne. You look a little surprised.

[00:05:14] Kelli: Why was he surprised?

[00:05:15] Dave: Well, he was surprised because my background was not first time sales guy coming in, like, oh, like I didn't have any sales experience. And Wayne actually said to me, one day, are you just doing this temporarily until you get back on your feet?

[00:05:30] Kelli: Sure because you know, a lot of expense of a business is training employees.

[00:05:36] Dave: Yes. And radio shack had a program for training that everybody went through. It didn't matter where you came from, you went through their 15 steps to selling. Yeah.

[00:05:45] Kelli: And you know, that's not cheap. They invest a lot of time and money into their employees. And I'm sure like many, um, like many other organizations. They don't want to waste their time and money. They want to make sure the person that they are spending money on is invested in the company, right. They stick around

[00:06:03] Dave: So I lied to him and said no!

[00:06:06] Kelli: What choice did you have?

[00:06:09] Dave: I tell you, no, no, I, I, I said, no, I think radio, Shack's a wonderful company. I'm going to make this a great career. I always wanted to work at radio shack.

Just love it here. You know? And, and, and so Wayne said, okay, thought to myself, there's no way that I want to stay at radio shack for any length of time. I just want to a broke, you needed a paycheck. I needed to get off broke. Right. And then I would let my entrepreneurial spirit go forward again. Absolutely. What I didn't realize is the importance of the lessons that I would learn at radio shack.

So I got the job, uh, and let me prove to anyone out there that worked at a radio shack or managed a radio shack. I'm going to give you a few radio shack, buzzwords ready? Force-feed inventory gains. I C S T. And of course I mentioned the 15 steps to selling and the annual managers meeting.

Oh, so radio shack was kind of in a sales slump. During that time, the annual meeting was a way to reinvigorate. It was a way for 5,000 managers to all come together in one place, it was kind of like half an Amway, kind of like rah, rah, rah session. And then half of it was here are the new products. Here are the new stores that are opening. Here are the new programs. So on and so forth. There's a couple of days up in New York, John Roche, uh, the CEO at the time was very engaging, super savvy. Well-respected by the team. And I had worked at radio shack now for a little over a year and a half, and I moved my way up from being a sales associate to a manager of a computer store that year when I went to the first managers meeting, which was in New York City, I was one of two recipients of the chairman's challenge award for top sales gains. Wow. So we kicked ass. So anyway, I was one of two that when the chairman's challenge award for that year, shout out to my friend, Robert, if he's ever listening to the program here

[00:08:21] Kelli: Did he win the other way, he won the other one.

[00:08:23] Dave: Yep. And yet good for Robert and another smart guy. It was a big deal for me. I bet John Roach was inspirational during his keynote speaker and he set the stage for the, just set the stage for the next two days. But it was Bernie Appel who everyone wanted to hear. He got his name, Mr. Radio Shack because he was bigger than life.

Bernie never made you feel like you were different than him. And I think that's a trait of a good leader. Absolutely. So every year at the annual meeting, Bernie would go through the radio shack catalog. Do you remember the catalog,

[00:08:59] Kelli: like a Sears catalog or like a flyer?

[00:09:01] Dave: No, it was a catalog.

[00:09:02] Kelli: I don't remember the catalog

[00:09:04] Dave: Yeah there was a catalog. There was a catalog. There were, you know, there were flyers too, but there was a catalog and you could page through this catalog. Every single item that radio shack sold was in the catalog.

[00:09:13] Kelli: Was there makeup? Where they're sparkely things?, then girls wouldn't remember that. The catalog, so go ahead.

[00:09:22] Dave: So he would do his catalog review and I remember Bernie was going through the catalog and he went to like the first page and he go, I really like this item. It's going to sell you guys need to really get out there and push this. It's got good profit margin. You're going to make our customers happy, blah, blah, blah, blah, blah, blah. And everybody's looking up there and he'd go to page two. I really don't know why we put this thing in the damn catalog. I think this is a piece of crap, you know, you know, somebody overruled me. You know, that's the kind of guy he was.

And I don't remember if Bernie did this in front of all 5,000 people, or if this was in one of the breakout rooms, maybe somebody who, back in the day remembers this story can leave it in the comments or let us know on our website. You know, like if they remember

[00:10:14] Kelli: any radio shack peeps out there?

[00:10:16] Dave: Yeah, All of that is good. Fun. Let's get to the meat and potatoes here. Radio shack was struggling for profit. They were struggling to increase revenue, and like most businesses that are doing that, they were looking for a way to make sales gains. But not just little sales gains, they needed to make big sales gains. They wanted to make 10% sales gains.

And when you're a multi-billion dollar company and I think radio shack back at that time, or Tandy combination radio shack was probably 4 billion in annual sales. To make a 10% sales gain on anything close to that. That's a huge number. You have to change the game a lot. Yes. So we're in a meeting. And again, I don't remember if it's the big 5,000 people meeting or if it's the breakout group, Bernie says.

We need a 10% sales gain and I'm counting on you guys to do it.

[00:11:15] Kelli: Wow. That's a tall order.

[00:11:16] Dave: It's a tall order. And, and nobody was used to making 10% sales gains in the normal stores. Now the computer stores, they were doing that, but the clock radios and VCRs and all that kind of stuff and not so much.

[00:11:30] Kelli: Right. You'd have to sell a lot of switches.

[00:11:33] Dave: You'd have little transistors and

[00:11:35] Kelli: I got a picture of them hanging in the little plastic bags on the wall.

[00:11:38] Dave: So Bernie is serious, he wants us to do a 10% sales game, and nobody has a clue on how to do it. Not a frigging clue because we have very little control as managers of the store.

Just like in most businesses, managers of individual departments have a little that they can control on like the non-controllable expenses. Right? Right. So you can't go to non-controllable expenses, electricity rent, so on and so forth and go make major changes there quickly. So you have to go into controllable expenses. In order to try to figure out, you know, where can you save, right? Where are the efficiencies radio shack store managers had some control of controllable expenses, but they had already applied all of the efficiencies that they could. There was just no other place

[00:12:27] Kelli: to squeeze out that little bit. Right? Well, actually that significant bit.

[00:12:31] Dave: Exactly. Bernie was asked very politely. So how are we supposed to do that? Right. And with a confidence, that would cause you to just follow him into a ditch. He says you're going to do it with batteries!

[00:12:47] Kelli: It's almost like he was just waiting for someone to ask.

[00:12:50] Dave: It felt like that because everybody started a laugh.

Right. So radio shack was very famous. Having batteries, any kind of battery that you could ever think of radio shack had the battery. So if you had nothing else on your shopping list, except a battery, you normally went to radio shack in order to find that battery. But how is that going to help us, how our batteries going to help.

So if we wanted to try to do same-store sales gain. So if you hear the term same-store sales gains, or same-store statistics, or same-store comparisons, uh, which is used a lot in financial lingo, what it simply means is let's just say you have 100 stores and you opened 10 new ones. In the last year. Okay.

You would do the calculation based on the 90 stores and you would not use the 10 new.

Oh, I see. So it excludes

[00:13:49] Dave: them. You would exclude them because they're different. They're not the same. So hence, same store. I see. So. We all figured that it would be almost impossible to have 10%, same-store sales gains based on batteries.

Right. And, and, and Bernie just slid back in his chair with the utmost of confidence and said, you need to think small. You're thinking too big! Stop confusing yourself. Stop trying to go find the obvious, because you've already looked for the obvious. The corporation has looked for the obvious. The obvious is not there.

Now you have to be creative. You're going to get 10%, but you're going to do it in a different way. Let's do some math, the average non-product, and I'll explain non-product in a minute. The average non-product ticket sales ticket was 5 dollars and 55 cents. So not a whole lot. Right! Now the average product ticket was a little over a hundred dollars as I remember.

So we had non-product tickets and product tickets, non-product tickets, where those sales that came in to do just what you said, Kelli, to buy a switch, to buy a little pieces parts. And those average tickets were $5 and 55 cents. If you came in, you were buying, you know, a clock radio, or if you're going to buy toys, which they were also very famous for or CB radios or anything like that, the average ticket was just a little over a hundred dollars.

And this is what Bernie said. All I want you to do is add one battery to every ticket. One battery to every ticket. Is that too much to ask for guys

[00:15:45] Kelli: how much were batteries back then?

[00:15:46] Dave: So here's the key. The average non-product ticket was $5 and 55 cents. Right? The average battery was 59 cents. Oh boy. Do the math.

Right? They have it.

[00:16:01] Dave: There's your 10% sales gain. Add one battery. To a $5 and 55 cent average ticket, and you will average a 10% gain

[00:16:14] Kelli: simplistic, but brilliant.

[00:16:16] Dave: So he took all of the fear out of

[00:16:18] Kelli: that, who can't sell a battery

[00:16:20] Dave: who can't sell a frigging battery?. He took all of the fear out of it and he simplified it and he made it feel as if, okay, this is now accomplishable because I'm not looking at it in a weird way.

It's where I developed what I call my 1% rule. And I will tell you about it in a second. How about the product ticket?

[00:16:41] Kelli: That one's a little more challenging.

[00:16:43] Dave: That's a little more challenging, right? That's a lot of batteries. That's a lot of batteries or it's one master battery pack. So recall the average was about a hundred dollars ticket. The battery pack, which included if I remember like four C batteries and four D batteries, four AA batteries, and a couple of hundred bucks. So it's like 9 99.

[00:17:03] Kelli: Oh, and it satisfied all of your battery needs.

[00:17:09] Dave: You should do the commercial, satisfied all your battery needs.

So Bernie said, if it's a non-product ticket, just sell one battery, right.

If it's a product ticket, sell one battery pack. Yeah. And everybody, all 5,000 people left that meeting. Invigorated that they could actually do a 10% sales gain.

[00:17:36] Kelli: Oh yeah. I bet they were all jazzed up.

[00:17:39] Dave: Bernie, Bernie was simply brilliant in breaking things down to the lowest common denominator and making it feel like, oh, there's a path forward on something that does not look like there's a path forward. And I seem to recall the same-store sales gains after the fiscal year approached that number, whether it hit the 10%. Wasn't important. What was important is that we exceeded expectations by doing one simple thing.

[00:18:09] Kelli: What a great rule that you can apply to so many things,

[00:18:12] Dave: right? So that's my 1% rule. So here's what I adopted.

And this is what I learned from working at a radio shack. And I guarantee you, you can learn things from working anywhere. You will learn things. At working at a McDonald's. So if you're, if you're working at a McDonald's and you're looking to move up the ladder and you want to be an assistant manager at a McDonald's or a manager at McDonald's, there is nothing wrong with that goal aspiration.

[00:18:45] Kelli: If you think about it, Dave, you're just talking about two different business models, but you're talking about upselling in both. Do you want fries with that?, Or do you want batteries with that?

[00:18:57] Dave: You're absolutely right. You've just made the analogy that I didn't actually even put together. The beginning of the program here. Think about it. When you say, do you want fries with that? You're upselling. You're just asking for the damn batteries. You can eat the fries.

[00:19:11] Kelli: You're just in a different building,

[00:19:13] Dave: same exact principle, right? Simple little things in order to take care of big problems. So the 1% rule is very simple. Let's just say that you've got to do a 10% cost reduction.

Do not go looking out for a one-time, 10% hit. It is likely not there. Yeah. Go find ten one-percenters and you will achieve your goal. I promise you you'll achieve your goal and

[00:19:43] Kelli: it's pretty painless.

[00:19:45] Dave: So let's read. We covered the notion I call the 1% rule and that guides us to react to the bigger goals by thinking small.

[00:19:54] Kelli: Right? So in the end goals can seem overwhelming, but if a lofty goal has a chance, some don't, but if it does. You can break it apart, look at all the different components and pieces that can affect it. And if you think about it, it's actually the reason for the old question. How do you eat an elephant?

[00:20:15] Dave: Eat that elephant one bite at a time, and I guarantee you your team and you will have greater success.

[00:20:21] Kelli: Thanks so much for listening today. And if you enjoyed this, just tell a friend about us.

[00:20:26] Dave: Tell just one friend, not a hundred of your friends, just one friend.

[00:20:31] Kelli: Ask them to give us a listen, join in the fun. And check out our website. It's easy. My job here is done.com.

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