In this riveting and dynamic conversation, Henrik Stepanyan, CEO at Barbeques Galore, shares his immigrant story, his early sales career, experience in the military, and how he has been able to outperform and lead the way for so many others in business and in sales. You will want to take notes and replay this conversation!
#125: The secret weapon in sales with Henrik Stepanyan
June 23, 2021 • 55:04
Aaron Spatz, Host, America's Entrepreneur
Henrik Stepanyan, CEO, Barbeques Galore
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Welcome to yet another edition of America's Entrepreneur. I'm so excited that you're here. Thank you again for tuning in. And again, I know you just got done listening to like, subscribe, follow, but please be sure to do that and share it out with your friends, family, those that that are in your network. I've used elements of these conversations as introductory pieces to other people and to really help add value. So there is a tremendous amount of value that comes from these conversations and you'll see exactly what I'm talking about when you get a chance to dig into some of these episodes.
So I'm very excited to introduce our guest, Henrik Stepanyan. Henrik comes to us from a background in our nation's military. He served as the United States Marine and got out back in 1999 and he's had a really interesting career. So he's done things from regional VP, market manager of a couple of different things before assuming his current role as CEO – and there's a whole story behind that – with Barbeques Galore. And so we're going to talk about Barbeques Galore. If you are a grilling barbecue enthusiastic like me, I don't like to say I'm an enthusiast, I really, really enjoy it though. And I try. And so I'm going to try to ask then some really fun questions of him as we kind of go through this. So Henrik, man, I just want to welcome you. Thank you so much for being a part of the show.
Thanks for having me. I appreciate it. Thanks so much, Aaron.
Yeah, absolutely. So let's dive a little bit into your background. So one, you know, thank you from one jarhead to another, you know, thank you for your service. But walk me through just a little bit of your story there with the military and then your decision to exit and then kind of the first couple stops post-military.
I got you. Well, again, thanks for having me. I appreciate you. Glad to be here. Give you a little background. I came to the states. I was born and raised in a country called Armenia and I came to the US in 1988 when I was ten years old. And I went to middle school, high school, played football in high school, and I wanted to be a cop. And that was my future dream at the time. And I hated school with a passion. One day I was on the way home from football practice, I get home, I get a phone call from a recruiter. It's like, “Hey, my name is sergeant so-and-so. Do you want to be one of the few of the proud the Marines? I was like, “Yes, sir.” He was like, “What the hell?” You know, he was caught on way off guard, and he's like, “Hey,” he goes, “can you come in tomorrow?”
So I told my dad. I said, “Dad, I want to go in the military before I become a cop.” And my dad said, “Look, this is the best country in the world. You should go serve it. We're fortunate to be here,” and we were there for at that time seven years. He goes, “Go serve the country.” So when I looked into the military, you know, of course the Marine Corps to me was the best and was the finest and that's why I wanted to go into. And so I went to the Marine Corps and had the time of my life. And I got promoted to sergeant at two and a half years, which, you know, it's hard to do in the Marine Corps.
But I was fortunate. I had a lot of great mentors and a lot of great people who took care of me and looked after me and gave me the right direction. And I fell in love like many Marines do at a young age. And I met a military brat whose father was an Air Force officer. And you know, she lived in the military life. She was always traveling every three years to a different duty station. And we got married when I was 19 years old. And at the time, I wanted to make a career out of the Marine Corps. And at the same time, I wanted a family. And my wife said, “Listen, you know, if we want to have a family, we got to get out. I'm not going to have kids in the military and put them through what I went through.” You know, she said, “If you want to stay in, just you and I will travel the world together, it'll be the best time of my life.”
I'm like, you know, I come from a huge family. There's over a thousand of us in my dad's side of the family alone. So, you know, I want to kids pretty quickly. And I decided to get out and I wanted to be a cop. And when I got out, had a buddy of mine who was at a furniture store working over there, he goes, “Hey, man. Won’t you come here and sell some furniture until you’re coping, you know, go through the process.” And I said, “Look, I'll check it out.” And within the first month of this company, it was a nationwide company, I became the top salesperson in the company.
Wow, man, that's awesome.
I made paychecks. I'll never forget my first paycheck. I went to a payroll lady who happened to be Armenian and I was like, “Aida, listen, I think you guys are overpaying me.” You know, because being in the Marine Corps, we don't make any money, right? We didn't go for the money in the Marine Corps, right? Especially as an honest guy you're not going for the money. So I said, “Aida, I think you overpaid me. So please take the money back and give me whatever is owed to me but take most of it back.” She’s like, “ No, no, this is what you made, honey.” I said, “No, it can't be right.” And then the next month, you know, I became number one. I stayed there for until I got promoted, but I couldn't believe the money I was making. So I decided to give retail a chance because the money I was making within the first year, a six-figure income, coming from the Marine Corps from a different country totally. And I was like, oh my God, I hit the American dream.
And so about a year and a half into being the top sales force at the company, there's an opening happened within the company for the store manager. And at that company, typically you would go become a salesperson, then a merchandiser, then a sales manager, then a store manager. And I called a district manager. I said, “Hey, Rich, I know that Glenn’s retiring. I want to be the store manager.” And his first comment was, “Are you drunk?” I was like, “No.” He’s like, “What the hell is wrong with you?” And he goes, “I'm going to come to the store right now. I'll see you. I guess I'll be there right now.” I said, “Okay.”
So he comes down and he’s like, “Listen.” And he goes, “First of all, there's steps to get through. You can't go from being an associate to a manager. Second of all, you make it about a buck 25 a year as a salesperson, we're paying $40,000 for a manager. Why would you take a pay cut?” I said, “Well, look, I know I can sell. I've proven that. And I want the opportunity to lead because that's what I've grown up. That's how I'm wired and I want to take my own store” and blah, blah, blah. And he was like, “You're out of your mind.” And he goes, “We can't do as a top guy,” whatever.
And so he gets me up to the VP. Same question. He goes, “Have you been on drugs?” I was like, “No, this is what I want.” And then they gave me the opportunity and I took over a store that was struggling, and within a short period of time, turned it around and got chosen out of the company to be what's called a model store at the time, where they would send in all the buyers, the bankers, anybody who was anybody who wanted to go see what the store was supposed to look like. They came to that store to look at it. So a lot of pressure on, you know, from the appearance of the store to the performance of the associates, just on operations of it. Again, I was very fortunate to be able to have a good team to be able to do that with.
And then after a year of doing that, they chose me to be the area manager for Southern California at the LA region. And I did that for two years. And then, again, I had a great mentor. My boss at the time was the VP for a certain region. And the opening came up for another VP position equal to him. Now he could have easily not said a thing and not promoted me and put a good word for me, but he was an amazing leader and he gave me an opportunity to interview for the VP job.
I was 25 years old and I became the youngest VP of that company's history. And you know, I had a quarter billion dollar region with over a hundred employees and a bunch of different stores and I did that for a little over a year, became the VP of a year. And I kept my old boss’s butt so he was… to this day, I jabbed him. We were still friends now. Today I give him a crap like, hey, man, you know, thanks for hooking me up, but, you know, I smacked your ass when we’re going head to head. But every time we have a beer together, you know, we talk about that and joke about that.
And then when that company was going down, unfortunately they had some – they merged with another company from the East Coast and there was a lot of mismanagement and I started writing on the wall and I decided to go to a company called Select Comfort that make a number of beds for sleep number. I did that as a market manager for them for two and a half years. And that company is at the time and currently, they're an amazing company. Sleep number beds, you know, they're a great product, great leadership. I mean, everybody from the old CEO to new CEO, amazing, amazing people.
And I was there for a couple of years and I get a call from a recruiter. I was like, “Hey, we got your name from somebody. Because back in the Levitz days, when you guys were opening a lot of stores, you were one of the lead persons to open up 20 stores in that three, four month period of time.” This company, Barbeques Galore, is going to go through the same growth that you went through. I said, “Look, I love this company where I'm at. They're great people. I'm not going anywhere.” She said, “Well, you should check it out.” I'm like, “No, I'm okay.” So she called back the next day, she goes, “At least talk to them.”
So it piqued my interest because I’m like if they're going to call me two days in a row, let me just check it out. And when I came to interview, I learned that they had at the time, what was told to me was, “Hey, we're going to go public in couple of years. We're going to open up this many stores going to do this and do that. And you know, we'd love for you to come on board.” And I was like, “You know what? I like controlling chaos.” You know how it is in the Marine Corps. You like to have action. You want things to be happening. In that sleep number bed, they were such a smooth company that it was almost perfect. You know, everything operationally was so good that it wasn't crazy enough for me.
So I decided to leave over there and come to Barbeques Galore in March of ’08. And I brought about 15 people with me that were either at my previous company or at that company. And then as soon as I got in on March 3rd, I came as a regional manager. And within five months after, after a month and a half later, they said, “Hey, we're not going to open more stores. We're doing a mass layoffs.” Like what the – wait a second. This was not what the story was supposed to be. You know, I was supposed to come here. I got those people with me to come on board and I can't be doing layoffs now and be like, well, this is what it is. I said, “Okay, well, let's roll.” So we had to go through a bunch of layoffs. And then the crew that I had brought with me, you know, they were in place. And in August of that year, the company filed bankruptcy.
And I was like, Jesus, okay, well, do you know what? So my old company called, said, “Hey, you want to come back? We worried about the BK.” I was like, “No, I made my bed. I got to lay in it. If I come back, they all got to come back with me, all the guys I about over, all the guys and girls.” They're like, “No, you can't do that.” I said, “Well, if they’re not coming back, I'm not coming back. And then whatever happens, happens.”
And things, you know, we got bought out by a manufacturer who's an amazing person. He's a Taiwanese gentleman. And he left the original leadership team intact. And then I got promoted to be a VP a year after I got hired, which was March of ’09 because the VP left to go somewhere else. He was a Naval officer. He was amazing. He still was amazing. I still talk to him to this day. And then a year later, the company was still struggling and the owner decided to make a change. And then he was going to close a company because they have lost millions of dollars the previous years.
And before he closed it, I reached out to him. I said, “Listen.” You know, I met him a couple of times before. I said, “Won’t you get an opportunity to run the company?” I said, “I don't want any money from you. I don't want a pay raise. I don't want anything. Just allow me to see the books because as a VP of sales, all I was in charge of was just the sales. All the backend stuff, I had no visibility to it.” And he said, “Are you sure?” I said, “If you're going to close up anyways, give me a chance to figure this thing out. If I can't figure it out, then you close it. What do you got to lose?”
And then we had a similar background because I came from a small village in Armenia. He grew up in a small village in Taiwan and became a billionaire. And he said, “Okay.” He goes, “I'm going to let you go ahead and do this thing.” His sister was the finance person that worked with us. She was amazing as well. So between her financial expertise and me trying to figure out what the hell is going on the operational side and at the same time doing the sales side, we ended up going from losing $60 million the year before I took over the organization to be profitable within three years.
And now we've been doing – knock on wood, you know, we’ve been fortunate, we've been blessed that we're able to survive for the last eleven years now since the changeover happened.
Wow, man. That's a riveting story, man. So there are so much that I want to go back and touch and I'm actually struggling with where to prioritize effort here because, man, there's a lot of great different avenues that we could go down. So let's touch this really briefly because I think I'm curious, and if I'm curious, other people are. So I try to follow my gut because I think other people would probably have the same question. So just real quickly cover for me the family background story of what inspired the family to move to the United States and what was going on at the time and just that whole situation?
Oh, definitely. So I came from a small village called Ararat in Armenia. That's where the story behind Noah's Ark was found in Mount Ararat. That's my hometown. That's where I came from. And at the time, that was a Soviet Union, you know, Republic of Soviet Union in Armenia was. And my dad knew that staying there, we would have no future. You know, as in a communist country, you have no future as a kid. So he wanted a better opportunity for his kids and his family. And out of his ten siblings, one of his brothers had come to the US in the ‘70s.
And so my dad is the youngest of ten and his oldest brother had come to the US and his nephew who is the same age as him had set up a business out here in California. He was doing air conditioning. And my dad reached out to him, said, “Look. Can you do what you have to do to get my kids over there and we'll figure out a way to make it?” And we waited a couple of years before the paperwork went through and we got the visa and everything got approved for us to come over. And it was all because of his kids. He wanted to make sure that our kids had a better future because staying over there again, being in a communist country back then, we knew we had no future. And Armenia ended up becoming independent when the Soviet Union collapsed in ’91. They got the independence, but we came in 88 before when it was getting really, really bad.
We came here at the time, there was only five. It was me and my sister and my brother and my parents living in a one-bedroom apartment. And my brother and I shared a couch on the floor, which we would fight five to see who’ll take over – well, I won because I'm the biggest one. I get the big couch. He get the little couch. And my sister slept on the floor of my parents' room. And we did that for, you know, let's say four or five years while I started working. I got here on June 10th, 1988 and I didn't speak a word in English. I just knew hi, mother and father. And that was it.
And I started working in September of that year passing out flyers at Domino's Pizza for the local franchise owner. And then I learned how to read English. So I would go – I'm home from school from three to six, go to Domino's Pizza, hop in the back of a Chevy S10, which I'll never forget with a camper on there. And Mo, the owner of that franchise, would take us up and down the streets of Glendale and Burbank, California. We'd run out hang flyers. We get home, get paid in quarters. We'll take a pizza home to our family. And then I would learn how to read English. I would go door-to-door sell candy from six to nine. I did that since I was ten to about 15 years old when I got my first real job at a mall.
That was fun.
That's incredible. So given your background, and so the language of Armenia is Armenian, correct? And then there's also Russian. I'm sure you probably grew up with that as well, right?
I spoke it fluently. I speak Armenian fluently, but I spoke Russian fluently when I came to the US but I never used it. So I forgot all of it because it was only Armenian at home and English when I was going to school.
Yeah. Wow. Well, that's amazing. I really do appreciate you sharing that story. I mean, it's incredibly inspiring, right? It's just showing just the humble beginnings, the difficulty, and just the love that your father had for his family, right? And to get you guys over here and I just think that's absolutely, absolutely incredible. I can only imagine just how proud of you he is just seeing where you've gone just with your life here.
He's definitely proud. I mean, my siblings, you know, my brother got his PhD from USC. My sister younger one is an attorney. So we've been blessed because we had, you know, my dad would kick my ass if I step out of line. So I always had that respect for him to make sure he said, “Look, I uprooted my entire family to come to the US for an opportunity for you guys to succeed. So don't mess it up. Work hard and you'll get rewarded.”
Yeah, that's amazing. So then let's then jump into topics. I mean, because again, my wheels are spinning here and I'm really curious. So after the military – and I'm going to figure this out, and it may be very obvious or it may take a little bit of effort to figure you out here because I'm genuinely curious. So how does somebody with zero – well, I shouldn't say zero because you did have some sales background. You did have some hustle experience prior to going into the military. Because I'm wanting to kind of pick into that. How do you go from such an early age just going in and just completely outperforming everybody else that are either at your peer group and above, right? And you're constantly going higher and higher and higher. And you know, you're dealt or you're given a really crummy situation, whether it's business, and you dig into it and you figure it out. What are you working through, what are you doing differently than other people aren't?
For me, honestly, it started when I was ten, eleven years old when I got my first selling job going door-to-door. And when you are faced with a situation where you have no other choice as an eleven-year-old to provide for your family, to help pay the bills, to help put food on the table, you figure out how to make things happen. You know, not taking shortcuts, not taking no for an answer either. So when I was going door-to-door selling candy, I learned how to read. So somebody would ask me a question about what it was, I was like, oh, crap. So I had to learn English pretty quickly. And I started selling and I come back with an empty box and the guy that would take us around was like, “You empty?” I was like, “Yeah. I need more, please. Please, more, more.” So I get more candy and then go to the next one because I wouldn't take no for an answer. You know, as an eleven-year old kid, people say, “No, no, no.” I was so blunt. I knew the language. I said, “Why not?” And they’ll look at me like who the hell is this kid at my front door asking me why I don't want to buy a $5 peanut brittle candy. And then that's what’s you had to.
And then when I got my first retail job on the mall, I was working at a company called Going to the Game, which was at the time like a sporting goods store. Not like sport clothing. They had vintage jerseys, things like that. And that company gave you not bonuses, but they gave you little perks if you had sold packages. So if you’re selling a three-piece package, you would get an extra whatever, couple of cents, on that sales order. And so I asked the manager, I said, “Look. So how do I make more money?” It's like, “Well, if you sell a jersey, make sure you sell socks and shoe laces or something else, a hat, the shorts with it.” I said, “Okay.” And then I started doing that. Okay. What had I got to do now to make more money? It's like, “Well, now you can sell the high-end stuff where there's $200 jersey authentic.” At the time, it was Michigan Chris Webber’s jersey. And I said, “Okay.” “Sell that with the shorts, with whatever jacket.”
And so just learning, always had to find a ways to how to better myself. You know, from there, I just not looking back, not looking down. Just saying, give me a goal, show me where it's at, and I'll figure it out because you had no choice. So having that mentality is, you know, like I said, eleven years old is I take home food, my parents see, I get paid in quarters and I knew that, you know, that could buy me – I used go to Payless shoes and buy the Pro Wings for 19.99. And I wanted to have Nike's eventually. Well, how do I get there? Well, those costs at the time $50. I got to make another $40 somehow that's extra to pay for those Nike’s. I can be cool with the other kids because I was a nerd wearing Pro Wings.
I got you.
You know, those kinds of things is when you have no choice, you have to find ways to adapt and overcome, which is what the Marine Corps taught me a lot as well.
Well, yeah, a hundred percent. Yeah. That's a phrase that I think rings in our head to this very day. Yeah. So I'm going to keep going. I'm going to keep digging. So as it relates to sales, so there's different products, different services that people sell, right? You may sell like a hard product. Like in this case, you're selling candy, you're selling mattresses. Now you're selling barbecue grills. And then there's other aspects to that where then there's other companies that are like professional services, right? So maybe we're an accounting firm or consulting firm or whatever, but you productize those services most certainly. So how do you then go through the sales process with people – and hey, so I hear you when you say not taking no for an answer. How do you get in front of the right people and then expeditiously move through people in determining whether or not that they are a good fit? And then, you know, how aggressively are you working with them?
Well, the way I look at it, so my current company, Barbecues Galore, right? We're a destination for a customer to come into and they're not driving by and happen to see us on walk in and shake it out. We're not in a mall clothing store. When I first got here, I spent a lot of time on the sales floor, learning the business so I figured out what the flows of the business are, right? And it's not – I tell my guys all the time, “Look, our customer got off the couch. They took the time to find this, whether it's on Google or whatever the case is, they came into the store. They spend their precious time coming to our store. They didn't come there for no reason, right? But let's find out what that reason is. And don't focus on the product because they're not there to buy a product.”
In our business, we're selling a lifestyle. We’re selling a customer’s vision to entertain their family of friends with. So don't get caught up on the features of the product. Oh, this is a stainless steel. It’s got this thicker grade, all this mumbo jumbo. When I first got it, it was like, “Hey, here, this thing has a 14-gauge.” I'm like, “What does that mean to me?” If I'm a customer, you tell me it's a 14-gauge stainless steel. What the hell does that mean to me? I have no idea. I don't care. I want a barbecue. I want to drink with my friends. I'll entertain my neighbors and family get together. Let's find out what that need is and fulfill the need. Because once you get that need and you show them a product that's going to fulfill that need, it tells itself. You're not going to sell them anything. They're going to buy it.
And then growing up is finding whatever you’re selling, how does that benefit the person you're talking to? You know, when I was selling candy, if somebody would say no, when I learned a little bit English, I said, “Oh, how about a gift?” They’re like, “Oh, okay.” Because if they don’t what the candy, they give a gift to somebody else. Give them something that they're going to benefit from.
I had a mentor that taught me a pretty common – taught me a lot. And he said, “Look, everyone's favorite station is WIIFM.” I was like, What the hell is that?” You know, he's like, “That's called what's in it for me.” So, you know, tune in for them. That's Stu Kaplan. I love the guy to death. He helped me a lot. He goes, “Just find out what their needs are and what's in it for them.” Not for you and not the commission you're going to make, not the bonus you're going to make. It’s whatever their needs are, whatever’s in it for them, find that need and fulfill it. And everything else will be easy.
So then let's go to the point where you are, you know, you personally have a very real need to provide for your family. How are you able to separate the what's in it for them and then what you need, right? Because I mean, and I've heard people say this and I see this when people try to sell me things in the past, right? Desperation will come through, right? If you're not careful, people will sniff out that desperation wherever that's coming from. So I guess I'm throwing that back at you. How do people delineate between that? How do they keep things separate when they have very real pressures? You've had tons of different pressures. How do you keep that from coloring the way that you approach people?
From the time that I was selling to even now, the top salespeople in any industry, if they sell at 30% of the customer they see, they’re at the top of the game, right? 20% is the average, two out of ten. So that means that the other seven to eight people would have said no. They just said no for right now because I didn't give them enough information to make a sound buying decision. So that's on me. So everyone that says no is opportunity for me to learn, okay, what did I do wrong? What did I miss? What signs? And even to this day, I was in the store this morning and I had a customer – literally, I was in one of my stores in Upland California. A customer comes in looking for, you know, and I was talking to him, asking him the right questions. You know, he wants to be the smoking king of the neighborhood and this and that. We went through what his needs are and he didn't buy. And one of my guys’ like, “Aha. We didn't sell that guy.” I'm like, “Well, I messed up, man. So let me replay it back what happened.”
So it was just, you know, every no you get is a chance for you to learn. So I don't want to come across as desperate saying, “No? Why not? Why not? Why not?” It's okay if the customer came into the store and gave me all this information and then I failed to provide a solution for what his needs were, then that's on me. And then I never come across as desperate because you're not going to sell everybody. If you three out of ten, you're golden. It's like a baseball player.
You’re doing awesome. And the rest is noes for now. Those seven that said no, it could be a yes next month or the month after, you know, as long as you follow up with them, as long as you keep in contact and don't be a salesperson but become a friend. And by the time that guy at Breyer left, I knew about his adopted daughter. I knew about his family. He used to be a professional fighter, you know, all this stuff. When I see him next time, I can ask him about the daughter. Hey, how’s the dance recital? And they're like, “What the heck? Do you remember that?” I'm like, “Yeah, man.” You know, I'm not a salesperson. We're becoming friends. It's a relationship. Because once I gain your trust and we have a relationship, then your neighbors, your friends, your cousins that might need something down the line, you're going to say, “Man, go see that guy at Barbecues Galore.” “Go see that guy at that store. That guy’s awesome.” You know, it’s really cool that they build that network.
Sure. I love that. I love the way you laid that out. And I think – again, correct me here if what I say is you don't agree with, but I'm thinking of places or industries that are very heavily transaction driven. It's a volume game, right? So I'll pick on the insurance industry, for example. You know, you got people out there that are independent insurance brokers. They're selling health or whatever. I mean, any number of different insurance products and they make money by, you know, they buy leads. They buy a leads list and they work through that leads list as quickly as they can. And they're trying to – I mean, it's just like blow and go, right?
That approach that you described a minute ago, again, this is my opinion, but I tend to agree with you, right? So I would think that if I am a new insurance agent somewhere and I'm working next to somebody, who's just dialing and going, dialing and going down in. And maybe they're putting up some big numbers, but I don't know what their batting average would be, right? But would you advise somebody in that space to stick with the approach that you just laid out? Or is there ever a time where you think it is appropriate to not utilize that approach?
For me, because I get those calls all day, right? Running the company, I get people call me about it and I laugh sometime with these guys. Sometimes I'll hang up on them because they just won't shut up. You know, and they’re just calling, just presenting a product to me. It's like, okay, listen, fine, boom. You know, I’m like, “Stop for a second. Do you know who you calling it?” “Yeah. I'm calling this company.” “Okay. Do you know what we do?” “Well, yeah. You sell blah, blah, blah.” I'm like, “Okay. Do you know what my needs are?” “Well, no.” “Well, won’t you find that out first? I want you to find out what I have now. Do some research behind you before you make a phone call. Find out what my needs are. So when you call, you call with a solution, not just another sales pitch about, hey, I have this great insurance program that's going to save you 20%.”
I had this one guy that called. He goes, “I’m going to give you 40% off.” I said, “Oh, that's great.” I said, “Man, that's awesome. Okay, cool. Off of what?” “Oh, whatever you have.” I said, “Okay. What do I have?” “Oh, I don't know.” I said, “How the hell do you know it's 40% savings?” “Well, that's the – “ I said, “Okay.” I said, “If you're that confident, here. I'm going to give you some numbers. Write me a check for 40% of what I'm going to save. And then we'll go from there.” He’s like, “Well, no, that's not – “ I said, “Well, somebody, next time you call and say I'm going to save 40%, that's just blowing smoke up somebody's behind.” You know, find out what they have and what they're paying before you throw a number out there.
That’s so good.
You know, it's just do your homework. It's simple. Just do some research before you make a phone call, find out what that person is.
Yeah. No, that's so good. Not focused, not being so mercenary about the transaction. But again, going back to your earlier point, taking time to get to know the needs of the customer, getting to know who that person is. And then I think there maybe – again, I'm going out on a limb here on this one, but maybe there's times where you realize that you don't have the solution that they're looking for. Maybe there's a specific item that they need and you have the maturity, the emotional intelligence or whatever you want to call it, to be like, you know what, this may surprise you, but I don't think anything we have here is going to address that need. But you know what? I've got somebody across town. You can go over there and see him. And in fact, here's his card. I already gave him a call, let him know that you're headed his way. How does that line up with how you work?
It's funny you say that. I have a relationship with our competitors. I try to be as friendly as possible for those who want to be friendly with me, right? So down here in Southern California, there's a competitor that has three patio stores. It's a family. It's a father and daughter team. They're just amazing people. And we sell patio furniture, but not at their level. They're the experts, right? Those guys are doing an amazing job. So I've been in stores and I encourage our stores to say – Look, I had a customer coming on a Breyer store looking for a certain patio set. So we showed them, you know, our guys showed them what they had. They’re like, “Well, you know, I need –“ Not needy, but a customer need them more.
So I went up to him. I said, “Listen.” I said, “I appreciate you coming in here. First of all, thank you so much for doing that.” I said, “But what you're looking for, we can't fulfill that for you.” I said, “But if you go down four miles on this street, make a right turn, you're going to see a store called such-and-such store.” I said, “Go see so-and-so. If she's not there, ask for the sister and she'll be there. If not, the dad’s going to be there too. Jim's the dad. Go see them. They'll take care of you.” And they’re like, “That's your competitor.” “Yeah. But they're amazing people.” I said, “Jim has 13 kids from the same wife.” I said, “Their daughters work there.” I said, “The sons, the grandkids.” I said, “They're great people. They have great service. They have great product.”
That customer was so blown away that they went to that store, bought patio furniture. They didn't need a new grill, but they came back to our store. Even though those guys sold grills too, they came back to our store. They said, “Look, we don't need a grill, but we don't want anyway. We want to buy a smoker. I want to buy it from you guys.” And they were just blown away that we would do that.
I told my guys, “Listen, this is how you create relationships with people. Be nice to your competitors because you should know what they have on their showroom floor. You should know the people because there's got to be a time where we have things that we can’t provide the customer with. They need something different that they might provide them with. And then when they go to that store, they might have a need for a customer that we can provide that they don't have.” And it can go both ways. But I encourage that so much with – again, there's some competitors who are just really, you know, I went to a store in the Dallas area where I got thrown out. They man, I said, I'm going to come meet you. You know, my name is, this is like years ago. I want go meet –
“Hey, man,” I said, “I'm going to come meet you. You know my name like years ago.” I said, “I’m running the company now. I want to just see you guys. I want to say hello.” And then the owner comes on and he goes, “Hi, I'm so-and-so. Nice to meet you. Get out of my store.” I said, “I come to peace, man. I'm not trying to be… I'm trying to get to know you.” And then he’s like, “No, you’re out of my store.” Okay, cool. You do your thing and we'll do it our way. But now to your point, Aaron, is absolutely if you'd send somebody into a different direction that you can provide that need for them, they'll remember that and come back to you over and over for doing that for them.
Man, that's powerful. That's such a powerful story. I love it. So I'm going to recap kind of where we've come so far. And this is going to be really disorganized, but so I guess starting with what you just said. So one, you're going after the need of the customer first and foremost, not what you need as a sales rep. You're trying sell, you're trying to move mattresses, furniture, barbecues, consulting work, whatever, right? It's not about you. It's about the customer. And I'm going to steal that by the way. WIIFM. I freaking love that, man. That's awesome.
So, yeah, but that's so true, right? And to the point that you made earlier about the features, people don't necessarily care about the features at least at the beginning, right? They're there to get a need serviced. And then perhaps later in the conversation, then maybe they have some questions that you can go over that then. But the point that you were making was to understand, to develop a relationship. Ideally, you're making a friendship, just like you were saying earlier about the guy whom his daughter had a recital and all these other things. You're getting to know them. You're building that trust, right?
And I think I've read this in probably a half a dozen business books. I think it's probably common knowledge, anyway. It's like people do business with people that they know, like, and trust, right? And so if you're building those relational bridges, all other things equal, they're going to do business with somebody that they know, like, and trust. And that's what you're working to establish. And so you're just continuing to kind of go down that route but not being afraid if you needed to admit to the customer, like, hey, you know, we're not the best fit for you, but I can still meet your need. And I think that's what a lot of people in sales will miss is, hey, just because you couldn't personally fulfill that need doesn't make you any less important to this entire value chain here. It’s like you're still handing them off to somebody. And you were a part of that. You're were a part of making that happen.
And then like you said, they absolutely remember that. And then it just kind of – again, I don't want to sound so kumbaya and so new age or anything here, but it comes back to you because you're being so kind, people then feel this need not from you, but they just feel like, you know, I want to reciprocate what Henrik has done for me because Henrik and his team have been so kind. I feel compelled just out of gratitude to be able to do something for you.
Right. I'll share one more thing.
Stuart taught me this a long time ago when I first met him. When we were talking, again, I was a young hustler, this and that. And he said something to me that, again, to this day, sticks to me. That's all the new hires we bring on board. There's a saying, he said, “Look, people don't care how much you know until they know how much you care.” So I'm sitting there at the first time, I'm like, what the hell is he talking about? People don't care how much you know until they know how much you care. And I was like, oh, crap, you know, when you start trying to pat your chest and saying, I'm this, I'm that. It's like they don't care about that. If you try to blow them away with knowledge of whether it's insurance, you know, I have whatever, whatever this insurance business, I have this. No, man.
They don't care how much you know until you can show him how much you cared about them, then that's where the knowledge comes in later. To your point, you said earlier that knowledge about the product is important later on once they already established relationship and they can ask you detailed questions. That's when that comes in. Later on. But in the beginning, you got to show him how much you care about them because they're there to fulfill a need or a want.
That's amazing. It sounds so simple, right? I just wish everybody would do it, right? And there's probably areas that I can personally do better in my own business with that. It's a great reminder. And so, all right. So I think we've covered this. Unless there's any other things you want to talk about with sales, I wanted to kind of move then into – again, maybe it's not operations focus, but again, I want to kind of pull the string on your story as it relates to how you were able to turn around – you turned around the company, but then you've gone around in these previous roles that you've had and you quickly establish yourself as the sales leader. Or in that other story that you told, you know, you're taking a pay cut to take a leadership position and you're making a tremendous impact within the organization. So what else are you doing sales aside that is making a tremendous impact?
So let me correct you on one thing. I didn’t turn the company around when I was here. It was all the people that busted their ass and made it happen. I just happened to pick – my skillset is picking the right people, putting in the right roles and leaving and letting them do that thing. And it was all the hard work of all the associates in our stores, all the store managers, everybody on our warehouse team. They're just great people. You know, I've been blessed that I've been raised with a lot of affection, a lot of passion, and I generally care for people that I work with. I tell when I go to the stores and I tell everybody here in the office, “We don't call this office or we don’t sell corporate.” I hate the word corporate because we're not. Our job here is we’re called the store support center.
So our associates, we're an upside down pyramid. The top of the line of the food chain is the salespeople. They're the ones that are out there every day, seeing the customer. So when I go to the store, it’s not I'm going to expect the stores. No. I go to the store and say, “What do you guys need?” It could be something as simple as, “Henrick, our lights suck. You know, they’re too dim.” Okay. What do you guys need?” “Can we get LEDs?” “No problem.” I call the ops. “Hey, Claudia, order this store a bunch of LED lights. They need more light.” Cool, done. A store closed, the office was up, you know, anything. Hey, I got an issue with the lead time on this thing. Can you please find out from me? Jump on it, get back to him.
So what I did was when I first took over is open the books. I'm like, holy cow, there's a lot of waste here, right? I kind of saw it as a VP of retail side on the sales side of it. And then I said, well, what do we need these, you know, what do we have? At the time there was five guys in product. Well, we have small stores, man. We’re not a major company. We don't need five people in there. So let's find out who the hustler is in that group and who knows that stuff. And that let's start eliminating some of the fat that we have in there. You know, first month and a half or so, we cut a lot of fat and the people who were doing the work got opportunity to shine and they took it and they ran with it.
You know, we went down to lean and mean. You know how this is in the Marie Corps, right? You don't have a luxury of having everything for you at your disposal. You got to go lean and got to go mean if that means that I got to go out there and do a slow opening and pick up the trash and throw it out and move islands around and do this around. That's what I got to do. So if I'm doing it, then that means that the guy who’s running the sales side of it, you know, director of stores is doing it. My HR girl sees that, she goes, “Okay.” She gets a Windex and starts cleaning the windows. My other ops said, “Okay. If you’re doing that, I'll do the dusting. If the guy’s doing that, I'll do the sweeping.”
Everybody starts coming together. And you see it's a truly one family type atmosphere. So it just starts going from there. And so all the people that have been busting their ass are the ones that turned the company around, I just happened to be riding the bus and steering it and doing the right stop. So everything I've done has been just finding the right people to put in place to do what they got to do. I made some tough calls when it comes to as far as decision making operationally, you know, where is our biggest waste, right?
And so when I first – one of the things on the ops side is, okay, we have this sunk cost on delivery trucks and we have all these amazing service tanks. Well, during the slower months, if I have, let's say six trucks. During October and November, only two are being utilized. So I have four other drivers assistants in the warehouse literally sweeping the floor just to kill time. So I decided to, you know, at the time, I got so much hate for this from the blogs. And people said, “You know, this guy's going to ruin the company” blah, blah, blah. I outsourced to a third party delivery company our deliveries. But I made sure that they hired all of our employees as their other drivers.
Oh, that's cool.
I said, “So, listen, I want to give you the business, but you got to get these guys.” Because during our off season, they have peak seasons for other businesses that they deliver for. They can stay busy year-round. So we get better service because now they have access to more trucks if you have to expand during a peak season. And then our guys stay busy. They have a job guarantee at the company and we’re all that way. And that saved us a ton of money, but I got all, you know, all the blogs were talking about how dumb I was and that I was the worst thing for the company. I said, “Cool, whatever, we'll roll with it.”
That’s just an example of you did the analysis, you observed the situation. And I mean, I'm describing the observe, orient, decide, and act, the OODA loop here. I mean, I may have had the O’s swap there. But no, you're assessing the situation and you're making a call. And I think part of that leadership role is then sometimes you're going to make a decision that's not popular and maybe people disagree with it. And so certainly, I'm sure you did all of your due diligence as it related to the decision.
And I think that's just a mark of a great leader is one, you're taking care of your people all the way through. You ensure they got jobs. And so you're doing right by them. And most companies would not do the courtesy or would not provide that kind of level of courtesy and consideration to people. They would just cut them, right? And then you're stewarding the company's resources as efficiently as you believe that you can at that time by cutting that cost and outsourcing that so that you don't have a whole bunch of waste during the non-peak months. I think that's just a sound business decision. I think that's a great case study right there of just a good example of when you may decide to outsource a certain service.
Right. And the thing is I always approach this as, look, I'm not a smart guy. I didn't go to college. I'm just a jarhead that played football and use my head a lot to hit. I was a free safety. I was always taking headhunter. I said, “But I have common sense.” And we joke here because we'll have a random committee. We'll just make it up, right? Like I need a t-shirt committee. Who's around? So we'll have somebody new design t-shirts. We'll have the warehouse with, “Hey, come here. You’re in a committee now.” He just joined the committee. “What committee am I on now?” I said, “We're doing a t-shirt committee. We're doing the lunch committee.” You know, just shooting the breeze and having a fun and not be so serious about it. And just look, having common sense. Hey, sure. How do we do this thing as simple as possible? What is it going to take for associates to be successful? What do they need? And then from there, let's figure out the rest of it.
Going back to your product guys, was that another tough decision that you had to make? Did you ultimately have to lay off some folks there in that situation?
In the beginning, yeah. Because we’re looking – we lost $60 million a year before. I said, “Look, what we're doing is not working.” So there has to be some cuts made in the beginning, and those are the tough ones. Those are the ones that, you know, it's tough. But if you do it respectfully with some class and make sure that – you know, it’s people are losing their jobs, so you can't just go there and be an a-hole and say, “Hey, man, you're fired, you’re gone.” No, man, have some empathy. Have a heart and explain to them. Give them a heads up as much as you possibly can. I said, “Look, here' what's going to happen. And let me help you. Here, I’ll wrote a letter for you for a recommendation later at your other place,” you know, and just work with them.
So in the beginning, yes, I had to make some cuts that I didn't like to do. I had to see if they can automate some of our processes that we don't need to have five people on one place where they're manually having to track min/max levels of store inventory. It's like, no, no, there's a system for that. Let's have the system work for us. Well, if it doesn't do it well, how can it do it? Let's figure it out. And then well, we need to spend as much money to get the system to be automated. Cool. What's that going to do for us? Just basic stuff that you look at, okay, if we spend 10,000 miles for a system upgrade, that's going to save us a quarter million dollars of just people laying around just doing manual bit work, then let's have some common sense and get things. Because if not, we're going to be out of business. We're all going to be gone.
So at the beginning, again, it was a tough decision to make. It had to be made for us to right the ship. But the people who stuck around because they could've jumped ship easily. You know, one thing I take pride in is we're growing here on our website. We have a lot more sales going on. So I'm having to hire more people. And when I interview people, I hadn't met anybody that's in office, whether they're a warehouse associate, whether they're customer service, anything that we hire for.
And we talked about our warehouse guys as an example. One of the gentlemen, Rogelio, have been here for 24 years. Oscar has been here for 18 years. Orlando's been here for 14 years. The other Oscar is new. He's been here for seven years. We have Eric, 13. You know, all these guys who've been here for, well, 13, 15, 20 plus years, I love talking about it. I'm like we're so fortunate here because there’s 25 people in this office right here, in this support center, and over half have been able here for ten plus years.
You know, they're awesome people. Because we do barbecue. We do Barbecues Galore, right? We'll have cookouts and feed the team here. We do have birthday celebrations where we have everybody's birthdays, you know, bringing cake and sing to each other. We do have, you know, whether it's anniversaries – like yesterday, we had a Carlos in our store in Pasadena hit ten years. Got him a bottle of wine, you know, took it to him personally, saying, “Man, appreciate you with me.” It was him and I. I just walked over and I said, “Hey, man.” I said, “I love you. I truly do. Appreciate how you've been here for ten years and I can't thank you enough for all the hard work”. I said, “Let us get a little something small.” You know, we got emotional. I get emotional all the time with them, hugged it out and thanked him for his hard work, and you know, and just small things like that. People appreciate him.
Yeah, So I've picked up on some themes from you just in the time that we've gotten to speak. So I'm picking up just the absolute, just the giant size of your heart for people, right? So there's a true servant leadership quality to you, right? And you've learned that whether it's from your family, through your experiences in the military, just your childhood and everything else, but you definitely have a love and compassion for people and you want to really help see people succeed, whether it's a customer or a teammate, right? You have a certain approach to people. And I think that comes through and I think that's rewarded you. And I know you don't do it necessarily for the reward, but it's a great byproduct of just, man, you treat people well with respect. You do right by them. You try to do the best with what you have. You make the best decisions with information that you have and move forward and people pick up on that heart, right? They pick up on that intent and the message behind that. So that's one thing.
Your sales tenacity, I think you've really honed in on what true salesmanship is. And it really is, again, uncovering the needs of other people and seeing how it is that you can serve them. And again, it goes back to servant leadership. And then lastly, as you're looking at the other side of the massive increases in performance with the stores at all levels of your career in addition to the things we just talked about would then also be just operational efficiencies. And so going through and you're just looking at, man, where are we not being as efficient or as judicious with the things that we're spending our money on? How can we do this better?
Again, yeah, and I laughed when you brought up the military. Because again, yeah, do more with less. You know, your budget didn't grow; your budget shrunk and you're being asked to do more. And so let’s freaking figure it out. But no, I feel like those are like the big three kind of traits or hallmarks or pillars of this conversation. And man, I think it's terrific and I really am, I'm humbled and honored that you'd spend some time with me, Henrik. I really am. I'd love to – How can people get in touch with you? What's the best way that people can reach out? I'll put the website up on the screen here in just a second, most certainly. But I want to leave this to you. Did you have any final thoughts, final comments, anything else you want to share?
All right. Again, thank you so much for opportunity to speak with you. I appreciate it. And when I found out you were a Marine, it’s that brotherhood. I have to have to call you sir. I can’t call you Aaron. I'm doing that now.
Come on, man.
You’re an officer now. I got to give that respect. I really, really appreciate it. And my email, every time there's communication, I do Facebook. Our company Facebook, I monitored every day, on the weekends. If there's a complaint, somebody is not happy with whatever the case is, I give my email out all the time. It's simple. It's firstname.lastname@example.org. So if you have any questions, any whatever it is, whether it's good, bad, and different, I always put my name out there. My cell phone number, I always put out there, that anybody can call anytime. That’s our associate’s, not myself. I mean, everyone. If it’s a question, pick up the phone and call me. I’ll pick it up unless I'm doing, talking to a Marine officer.
That's awesome, man. No, your story is so inspiring. And we could spend another couple hours talking and I would love to invite you back onto the show for future conversation. We can cover maybe some additional topics and go any number of other directions. But now, I really want to – really, just my hats off to you. Just from where your family has come, it's just such an amazing story. And I'm so excited for you just to see where you can – yeah, I really am. I'm just sitting, I'm just like, man, this is so freaking cool. But no, it's a sincere pleasure. And again, thank you. Thanks for spending time with me today, Henrik. Thank you so much.
Thanks. I appreciate it.
Thanks for listening to America's Entrepreneur. If you enjoyed the show, please leave a review or comment on your preferred social media platform. Share it out with friends, family, coworkers, others in your network. And of course you can write me directly at email@example.com. That's firstname.lastname@example.org. Until next time.