Q&A with Rich Schmitt...
Helping clients (and readers) make more money
Rich Schmitt, long-time business management columnist for The Wholesaler, consistently generates tremendous feedback from his columns each month. Readers gravitate to his real-world, common sense approach to managing business operations, as well as the specific tips and suggestions that he offers. He recently shared some information with editorial director Mary Jo Martin on his background, along with his company’s expertise.
MJM: Rich, for those who may not be familiar, could you give our readers a little background into the history of Schmitt Consulting Group, as well as your father’s experience prior to forming his own business?
Schmitt: Dad and my Uncle Walt were journeymen plumbers working for my grandfather RR in the family’s plumbing shop in West Newton, Pa., when WWII broke out. Dad and Uncle Walt both enlisted in the Navy. When he and Uncle Walt returned from the service they worked in the family business for a couple years and then moved on to do other things.
Uncle Walt started Walter H. Schmitt and Associates and Therm-Coil Mfg. in West Newton and his family runs those businesses today. Dad went to work for Universal Rundle in sales and marketing, was executive director of phcib, sales manager for Barnes Pumps and then for A.Y. McDonald where he was ultimately made president and ceo. After 10 years holding those positions, he left to become a consultant. It was a difficult decision because he thought A.Y. McDonald was a great place to work, but it had been his dream to work with industry companies to improve their performance.
MJM: And please share some of your own background and experience?
Schmitt: Before joining Dad in the industry I started my professional career at Drake University working on the staff and as an instructor in the business school. I then spent 13 years at McDonnell Douglas in a variety of roles from programming to project management to corporate marketing and consulting. Most recently, I was general manager of an Information Technologies Division of McDonnell Douglas Corporation. I also sat on the Executive Committee for their $500-million Information Systems Group. (Coincidentally, Trane and American Standard were two of my larger clients. Working with those companies reminded me about the great people in our industry.)
MJM: What made you elect to join your father at scg?
Schmitt: Dad was a huge advocate for the industry and constantly encouraged me to “come back.” Dad had gotten into consulting when he was 55 and he often said that his only regret was that he didn’t make the move when he was younger. So when I was 39 with two young kids (who I wanted the flexibility to spend more time with), I resigned and joined Dad and Glenda, my wife.
MJM: You offer a wide range of services to clients. Could you please give us a rundown of your areas of specialty?
Schmitt: I think our motto tells a lot about our focus: “At Schmitt ProfiTools, our business is making your business more money.” It may sound a little idealistic or corny, but we try to live it as we work with customers. We really have two companies:
- At Schmitt ProfiTools, we provide products and services to create paper, web, cd-rom and handheld catalogs. We provide product content for websites. We have a fast and plumber-friendly web order-entry system that “bolts-onto” the software packages used by companies in our industry. We also design great home pages and websites for the industry. Finally, we provide advanced pricing analysis and pricing management tools to help wholesalers make more money through better pricing.
- Our second company is a consulting company focused on profit improvement, turnarounds, pricing and organizational adjustments. We do most of our work with medium-sized, closely-held companies in the hard-goods industries but our clients have ranged from $2 million to over $5 billion in sales in a variety of industries.
MJM: There are lots of consultants so how are you different?
Schmitt: First, I would say that we have a no-nonsense approach to helping clients. We dig in and make recommendations as a prioritized action list for each company. We explain the reasons for the recommendations and work with them to develop a process for implementation. Then, as needed, we may help implement those recommendations and provide ongoing coaching.
We focus on the blocking and tackling aspects of wholesaling because, frankly, that’s where most wholesalers lose their way. I’ve seen other consultants recommend fancy six-month strategic planning processes (paid for in advance, complete with 300 pages of boiler plate that was customized using search and replace) to companies that were hemorrhaging and in need of immediate, emergency help. For the record, I think planning is important, but it is seldom the immediate solution for spurting red ink.
I am personally involved in every engagement. I don’t sell the assignment then send in an inexperienced junior person to do the work.
Finally, I only take assignments where I think I can help and where I think the client will be open to recommendations. (Over the years we have had prospective clients say they want a consultant to come in to parrot their personal agenda. We politely decline those assignments.)
MJM: When you perform your consulting services, how much time do you typically spend at a company to really get to the root of their issues?
Schmitt: I spend a huge chunk of time listening to people at many levels in the client’s company. Each person has a unique point of view that shapes the diagnosis. I have been consulting for over 30 years and in this industry for almost 20 years, so I have lots of business and industry experience — but that only matters when I can apply it to a client’s specific challenges and opportunities. So after I have a good sense of the situation, I can apply my experience to the client’s benefit. While there are common threads to some assignments, most wholesalers are quite unique and need vastly different advice.
MJM: Are any of these areas in particular demand these days, especially with the changes in the marketplace?
Schmitt: You know from my column that I think aggressive selling is absolutely critical but just as important is managing those sales for maximum profits. Since all of our products focus on selling and/or profit improvement, we are actually seeing growing demand in the current economy. We have customers capturing additional market share and making money, even in this economy.
MJM: What are some of the key problems you see wholesalers having — especially things that are within their control?
Schmitt: I tend to focus on the fundamentals. In some cases the key problem is that the team does not have a clear understanding of their goals or a common vocabulary to work from. Getting the whole team focused on providing great customer service starts with defining great customer service. Their team is just as confused as to what they should be doing. They need real leadership.
MJM: It has long been believed that our industry has lagged behind some others in embracing distribution software and technology. Do you feel that we are catching up now; are wholesalers using it to their advantage?
Schmitt: Our industry has seemed to lag behind others. This is in part due to wholesalers’ target customers. No matter what a wholesaler is capable of providing, we have to remember than many of a wholesaler’s customers operate in the field and out of trucks. This limits how they can be reached and what will help them to succeed. Always remember, a wholesaler’s value is through the eyes of the customer.
MJM: Much like many companies in our industry, scg is a real family venture. Your daughter, son-in-law and wife all have roles at the company. Can you describe their responsibilities, as well as any other employees that our readers might be familiar with?
Schmitt: Glenda, my wife, is the president of Schmitt ProfiTools Inc., our software company. She started her career as a programmer then started the company with Dad back in the 1980s and wrote most of the original software. Jennifer, my daughter, is our director of sales and marketing. She is the other familiar face of our company since she attends most of the meetings and industry events with me. Cory, her husband, joined us about five years ago to help us rework our website then got into project management and reworking wholesalers’ websites. As with many family businesses, all of our employees are like family members and they each add to the company.
To learn more, e-mail rich@go-spi.com, visit www.go-spi.com or call 314/872-9199.