Tall Sales

Entrepreneur, August, 2001 by Geoff Williams

NO LUMBERJACK, BIG BLUE OX OR STEEL-DRIVING MAN PUSH ITS NUMBERS FROM $18 MILLION TO $50 MILLION HERE, BUT WOULD YOU SETTLE FOR A SALES TEAM THAT CAN IN ONLY FIVE YEARS? HERE'S HOW THEY DID IT.

IN A WAY, IT BEGAN WITH A BET. Or a dare. Certainly it Was a promise. Whatever you call it, it happened at the annual meeting in 1994, a half-social, half-serious function celebrating the past year. Larry Gaynor, founder, president and CEO of The Nailco Group, was proud of his beauty salon product distribution company. And why not? He had a strong company, largely constructed by a formidable sales team.

Today, it is a selling tsunami.

Back then, it had made $18 million for the year, and The Nailco Group-- TNG for short--was moving into a 100,000-square-foot, state-of-the-art complex. But Gaynor was bracing for a possible quitting epidemic--the new office in Farmington Hills, Michigan, was 20 minutes further from most employees' homes. And so Gaynor, who is something of a showman, boldly announced to his 65 employees: "When we reach $50 million, I'm going to buy each of you a car."

He enjoyed the looks he got from his slack-jawed employees. Then he promptly forgot his pledge.

Until 1999, when 24 employees reminded him.

As the only ones left of the 1994 crew--and knowing sales would hit $50 million within a year--they expected their cars. "I was in shock," says Gaynor, now 45. "I remembered saying it, but then II didn't remember saying it."

At TNG's annual meeting, held in the waning days of 2000, those 24 employees were rewarded with a choice: $25,000 in cold, hard cash or a free car worth 70 percent of their salary.

Employees wept. They shouted for joy--especially when Gaynor promised similar incentives for reaching $100 million. They promised Gaynor they'd reach that new goal within a year or two.

It could happen. After all, Gaynor's company is already something of an empire. There are several divisions underneath the TNG banner: The Industry Source, a mail order and retail store division; Hairco, a full-service hair-care products division; Beauty Direct, a master distributor for dealers, distributors and over-the-counter stores; and NailSmart, a discount nail product supplier.

DIZZYING, ISN'T IT?

Gaynor is an entrepreneur determined to rise to the top of his industry And it's hard to argue that he won't. TNG, which now has more than 230 loyal and enthusiastic employees, is growing by 30 percent each year in an industry that usually sees 2 percent growth.

"We don't call customers," brags corporate trainer Frank Knight. "They call us--with huge orders. It's like they can't spend enough. They apologize when they have small orders--they feel they aren't living up to [our] expectations."

So how can you achieve all that? In a way, it begins with a bet. But most of all, it begins inside the sales machine.

THE SALES MACHINE

It's a big machine. Gaynor's warehouse holds 10,000 items, from nail polish to tanning beds. On a typical day, TNG ships out up to 15,000 items worldwide. Roughly 50 sales staffers sway minds on telephones, telling incoming callers that if they just buy a little more, they'll save a little more. They offer more good deals than Monty Hall. Meanwhile, about 25 salespeople make deals out in the field, persuading salon owners nationwide to carry nothing (or almost nothing) but Nailco.

One of those salespeople is indoor tanning director Dave Folsom. With his crew cut and tall frame, he looks like a cross between a military instructor and a gym coach. He's one of TNG's elite. "I like [TNG's] leadership, the management. We've got good commanders," says Folsom, who likens TNG's sales instruction to basic training (and he should know: He's also a military policeman in the reserves). "We attack, and we attack in full force."

But for all the people running the sales machine, something's got to fuel it. And that formula is Gaynor-designed:

* A sales-enthusiastic culture.

* A learning-friendly environment.

* Incredible customer service.

The recipe is deceptively simple, but the cooking process is anything but. Almost as soon as new employees arrive, they're introduced to the TNG culture. Explains Maureen Mann, vice president of sales for the Industry Source division, "You have to want to play on the team, and you have to want to win."

Gaynor has wanted to win ever since he was 10 years old, working in his dad's hardware store in Detroit. Even in high school, Gaynor worked weekends and evenings, missing the chance to play in sports. An armchair psychologist might suggest that's why Gaynor acts more like the fired-up, beloved coach of a high school football team than a CEO.

TNG has "school colors"--purple and white. Especially purple. It colors the walls, carpet, cubicles, chairs, tables, pens, files and folders. The building's exterior features a prominent purple stripe. Numerous pennants, emblazoned with "TNG Rebels," decorate the place. And how many businesses do you know with their own fight song? At quarterly meetings, you'll find TNG cheerleaders and a Rebel mascot (played by Folsom), and at annual meetings, a real high school marching band. Working at TNG is one big pep rally.