What was the greatest challenge you faced in making the transition?
BLAKE: The LP world is made up of people who are used to being the ones in control, so when you are a service provider, you have to resist the temptation to try to run your customers’ programs. I offer my customers good advice, but the decisions are ultimately theirs. As it turns out, this has actually helped me deal with my kids growing up and making their own decisions.
HOLM: I think the biggest challenge was getting to feel comfortable with presenting all of the products and explaining to customers what differentiated USS products from the competition. As an LP professional, selling was something that happened frequently, sometimes to the CEO and CFO, store operations, as well as your direct reports.
MAY: Prior to the launch of LPI, I was challenged daily with controlling shrink for a multichannel retailer with thousands of stores across the U.S. and Canada and all that entails. Like most of my peers, I found it very challenging and dedicated myself to that goal. However, once I made the transition to LPI, I was not only challenged with leading a team of great folks in a common goal, much like I did as a director of LP, I had to figure out how to bring in new customers. My first customer was easy since it was my current employer, and I assumed it would be as easy for all new customers. I thought it would be as simple as telling the new prospect why they should buy my services, and they would line up at the door. Of course, that ended up being far from the truth and building an effective sales organization has been the biggest challenge of my career, but also, on a personal basis, the most rewarding.
McMENIMEN: I actually found the transition to be a relatively smooth one. It was a different kind of role, but I was essentially still working with my peers and sharing knowledge. In my new role, however, I was actually able to get more involved and help people directly. Rather than just share best practices, I was able to help implement them. I enjoyed it and, if there was a challenge, it was more in needing to charge people and make money, where it was more in my nature to simply be as helpful as possible. But, because I needed to eat and support my family, I had to learn to price the solutions, ask for money, and, worst of all, follow up on billing and late payments and chase people for money. I have since become far more comfortable with the first part, but still hate to call customers and chase down money, especially when the people you are calling are those you deem your peers and friends.
ROSENTHAL: The biggest challenge was working from home, which presented two obstacles. One was not having people around you all the time, and the second was conditioning my family to understand that I was working and could not run errands any time they needed something.
Has it been an advantage knowing the retail LP world from the inside? If so, how has it benefited you in providing solutions to your customers?
BLAKE: Absolutely. I can relate to what retailers require based upon first-hand experience. I’m familiar with the challenges of implementing a program in the retail space and have been able to educate my customers on issues that they may not have experienced yet. I’m not saying that other service providers don’t understand what is needed, but because I’ve “walked the walk,” I enjoy a greater credibility with LP leaders. It’s also the most enjoyable part of my job. I truly love the evaluation and problem-solving process.
HOLM: I think that the biggest advantage is that I have sat on the other side of the desk, and understand the challenges that LP leadership faces, not only with budgets for tools and technology, which includes building an ROI model that makes good business sense, but also from a payroll and people standpoint. Credibility and honesty are the keys to the successes that I have had.
MAY: Having a background in retail LP has been a major advantage in my transition to LPI. It obviously has the benefit of helping me identify personally with the challenges facing a director of LP. I have walked in his or her shoes and have faced many of the challenges they have. Also, since we provide loss prevention programs to a variety of retailers, we face those same challenges everyday with our customers. LPI is unique in that we are still very much frontline LP professionals working in the retail industry, so the challenges we face are the same as those working for an internal department. I believe this gives us a unique perspective that helps us provide custom solutions to the specific needs of an LP director. It is not a one-size-fits-all approach to loss prevention, but truly a custom approach that encompasses what is unique about that retailer’s culture.
McMENIMEN: The insight into retail LP has been the core of our success. Without this we would not have had the immediate nor long-term success that we have experienced. It was also a significant differentiator from other solution providers in truly being a company that had “walked the walk,” so to speak. It made us real partners in the industry, well beyond just being a “vendor.”
PALMER: Our view is that we are not selling an “off-the-shelf” product. Instead, we are selling our capabilities, expertise, and problem-solving ability. The inside knowledge of what it takes to reduce shrink, improve safety, and achieve operational results is critical to our ability to help clients. In fact, our “selling” process is more about ensuring people know what our capabilities are and then letting them decide when, and if, they could benefit from our services.
ROSENTHAL: It is absolutely an advantage. By coming from the LP world, I have clear understanding of what the LP executive faces within their organization in selling programs internally, obtaining funding, and, most importantly, earning the trust of the field and store staffs who must execute these programs. I have always viewed my roles in LP as a sales role. I always was in a position to influence and sell new programs, policies, and procedures. There is a lot more selling from the LP world to their internal customers than most people understand. That being said, I do not view myself as a sales person, but an extension of my clients. I enjoy being in their stores, visiting with the field staffs and stores, which keeps me close to my roots in LP. I firmly believe in only offering to my customers products that most benefit their shortage or shrinkage reduction programs and generate the best ROI.
Have you been disappointed with how some LP executives treat you as a vendor? Any disappointments in partnering with other vendors?
BLAKE: I was worried about how my former colleagues would treat me, but it has not been an issue. I entered into this new world striving to be a partner, so I’ve had a great experience. I was surprised when my status as a vendor disqualified me from participating in some events, such as the Women in LP caucus, or from attending conference sessions at certain trade shows. However, many of these things are changing as the industry recognizes the benefits of informed and integrated partnerships.
HOLM: I have no disappointments at all, and I am very appreciative of the partnerships that I have been able to establish. My commitment is to provide the customers with cost-effective solutions that work in their stores.
MAY: For the most part I have had great relationships with LP executives and vendors alike and have built lifelong friendships with many of them. I remember early in my career at LPI working with some truly great senior executive’s like Bill Titus and Kevin Valentine, to name just a couple. I had known both Bill and Kevin only casually as fellow LP directors prior to joining LPI and always admired their programs and careers. I recall specifically being intimidated by Bill, being a little younger than him and coming from a smaller retail format. I wasn’t quite sure what to expect from him in my new role as a vendor “trying to sell him services” as compared to when we were peers. He quickly solved that awkwardness for me by challenging me to talk with him about emerging technologies, loss prevention best practices of other retailers, what new issues I thought we would be facing in retail loss prevention in the near term as would as the long term. What I quickly realized was Bill and Kevin are dedicated lifelong learners who always challenge themselves to stay on top of their business by asking questions and seeking answers from as many sources as possible. Neither one cared if my background was as a vendor or retailer, but both were more interested in actively getting as many diverse opinions as possible to best serve the needs of their employer. So I owe both Bill and Kevin a big “Thank you” because I unashamedly adopted this approach for myself, and it has served me exceptionally well throughout my career.
McMENIMEN: With LP executives, I have found that my biggest disappointment is when I find execs who are not open to new ideas or get too tunnel-visioned to be open to new ideas or even discussion around new ideas. Not just in being close minded to hearing about new products, but in taking the time to get more involved with the industry initiatives and with the industry in general in shaping its direction. It’s not always about hearing a sales pitch. As a vendor we are not always trying to sell you. We can all learn from each other. Being open to sharing information and providing input on new ideas is critical to our collective success. I find the same with other vendors and to date have had great success, even with folks who are in some ways competitors, in being able to work together on certain projects. My only disappointment with other vendors has been limited to a very few occasions where lack of integrity has come into question with someone representing one interest, but having a different agenda and using the situation for gathering intelligence to steal ideas. I prefer the upfront approach…and I prefer to be kissed first.
ROSENTHAL: This is interesting. When I was first promoted to corporate manager at Kids”R”Us, my director taught me how important it is to call back a vendor. He always said it is the right thing to do. Be honest and say if you’re not interested, but the bottom line is you might need them later. It is frustrating at times with the lack of response, but I also understand how busy people are and that, if there is not an immediate need, you might not get that immediate phone call back.
Now that you have been in both worlds, how do you react to comments like “the dark side,” “just another vendor,” and “suitcase slammer?” How have you tried to distinguish yourself and your company from those perceptions?
BLAKE: When I first started at Aspect, I wasn’t fully at ease in my new role, and often used terms like those to describe myself. It was almost like I was apologizing for being in the position. A good friend in the business told me that by categorizing myself that way, I was actually diminishing myself and the work I did with his company. He said that he saw me as a partner, working with him to help him succeed, rather than an adversary. It was great advice that I took to heart and have made a cornerstone of our company’s approach to business.
HOLM: After three years with USS, I am still waiting to feel like I am on the “dark side.” I think by building true partnerships through great communication and follow up, a high degree of integrity and mutual trust, and by listening to what the customer’s needs are and having the solution offerings to address those needs is what makes our company different. Many of our products were developed based on feedback from our customers.
MAY: I have heard these comments, but they are usually made tongue-in-cheek and, from my perspective, not how the vendor community is viewed by most retail LP professionals. I have found that most retailers or vendors take a partnership approach and see our products and services as an extension of the loss prevention program.
McMENIMEN: I have not found this as much of an issue as the general perception makes it out to be. In thirteen years there has only been one negative comment made when I was, interestingly enough, compared to a used car salesman. But I hope it was a comment about the suit I was wearing and less about the products or services or my approach to selling them. However, given it was a comment from someone who was frustrated that their request for a free program had been denied, maybe it was just lashing out. I think the success in differentiating yourself and your company comes in being less of a “vendor” and more in being a solid business “partner” and delivering on your word. That can often come at a cost, but I am a firm believer in putting your money where your mouth is. In those rare occasions when something negative happens, we have always accepted responsibility for a mistake and always deliver on making it right at our cost. Some vendors will charge for the privilege of fixing their own mistake, and I have never been a proponent of that. Being a partner and doing so with integrity and ethics has always been what helps us distinguish ourselves from those perceptions.
ROSENTHAL: It is funny that when I first came over, everyone told me I was going to the “dark side.” Well, the dark side is pretty bright. I love being over here. We at Alpha differentiate ourselves in our support, training, and testing programs we conduct. We average a 98 percent success rate on all tests we conduct. We have field trainers and product managers that meet with our customers, and we truly are a business partner. We sell solutions and not just products. We don’t throw everything on a wall and go for what sticks, which is my definition of a “suitcase slammer.” At Alpha we are in it for the long haul, and our customer relationships are the most important to us and why our customers come to us for solutions first. Finally, for me personally, I have never forgotten my roots in LP and that is the foundation for everything I do in sales.
It is a reality that LP executives lose their jobs for whatever reasons and some believe they can become a consultant or vendor without skipping a beat? How would you counsel a friend faced with this situation?
BLAKE: As with retail, the provider role is not for everyone, and you have to evaluate the things that will make you happy and successful. You will be responsible for helping to make your company profitable, and, in most cases, that means selling. Most people come to this role and think, “These are my friends. They will buy something from me if I ask.” The reality is that the relationship may get you in the door, but your friends are professionals, and decisions are made for business reasons. The other advice I would pass along is to stay involved in the industry. When you go to the conferences, make sure that you attend the sessions, not just work the exhibit hall. Read everything you can about the retail environment, not just the LP articles. The LP executive of today is very well rounded, and they have the expectation that their business partners are the same.
HOLM: “One size does not fit all” is a good analogy to help explain to someone who thinks they will be able to jump right in and hit a home run. You need to believe in the company you go to work for, the products that they offer, and be willing to invest the time and effort to learn the business and what role they play in their new position.
MAY: Do not confuse professional and personal friendships with the ability to sell a product or service. Selling is very hard work and to get someone to “voluntarily” part with their employer’s cash is very challenging…as it should be. You need to be an expert on your products’ value proposition and be truly passionate about how it will help your customer achieve their goals. Be prepared for rejection, never take it personal, and remember that it is okay to have a beer with a retail friend without talking about business.
McMENIMEN: I think it depends on the individual, the personality and the products or services to be offered. Becoming an LP consultant based solely on LP experience and the dream that with such experience you can go out and help all of these retailers improve their shrink performance and get paid for itthat is more dream than reality. I think most people who are good consultants are well networked with the vendor community and is well educated on, if not partnered with, a variety of solutions and solution providers because at the end of the day, it takes tools to help manage a business and your effectiveness will depend on the products and services provided by others, just as it did when you were a retailer.
I would also recommend that knowing about a particular service or even liking a particular vendor does not always make for a good fit if you are thinking about transitioning. It is all well and good to be positive about a particular product or company, but if you cannot truly articulate its offerings or if you are uncomfortable in the sales environment in actually selling a product and asking for money, then it is not a good fit. Alternatives might also be in what role you look to fill with a vendor. Because you are proficient with a particular product may not make you the right person to sell that product, but it might make you one hell of a product trainer for that company.
Finally, I would ask…or caution…how they deal with rejection. As the director of LP for a retailer, you may have had no problem getting people to return your call. But as a vendor, you might not find it so easy, which can be very discouraging. If that’s the case, here’s one piece of advicedon’t take it personal.
PALMER: It was several years from the time I realized I would like to work in this role until the time I tendered my resignation. There were at least three years of preparation in terms of preparing financially, developing the skill sets I thought would be needed, and working on business plans. I don’t know how successful I would have been at this if I had been thrown into it in different circumstances. I would counsel anyone considering the vendor side to really think about the prep work necessary to make the transition.
ROSENTHAL: It is not that easy. There is a huge transition process from managing a group of people to working on your own. You have to learn that you are there to support your customer. You have to be cautious not to use “this is how I did it in LP” or come across like you know more than they do. This is the quickest way to lose credibility. Be a support, not a burden to your customer.
Based on your experiences, if you were back on the practitioner side, would you treat vendors any differently than before?
BLAKE: As a practitioner, the attributes of a vendor that mattered most to me were honesty, credibility, and knowledge. As a service provider, that’s what I aspire to and what I expect from everyone else. If I were a practitioner again, I would have greater understanding about the pressure that is put on a sales staff to make their numbers during certain times. I often thought quarterly and sales goals were artificial pressures on me to purchase. Now I realize that they truly are a significant part of a vendor’s job performance.
HOLM: I always tried to be as respectful to my vendor partners as possible, giving them the opportunity to meet with me and my LP operations director, visit stores with them, as well as respond to their emails and phone calls. Things can get hectic, but those relationships are important.
MAY: On rare occasions I have experienced the “them versus us” attitude, but it is the exception and by no means the rule. Interestingly, when it has happened, it has not been with the senior LP executive, but from the middle tier LP managers. My guess is that comes mainly from a lack of experience or over confidence. I think until you sit in the hot seat as a director, more junior managers may have a misinformed perception of the challenges a director faces. However, the vast majority have embraced me as a partner and part of their solution and not as a vendor trying to sell them something.
McMENIMEN: I think one thing I would do is take the time to respond to any vendor who reaches out, to be honest in either setting up a meeting or in being clear that I appreciate their reaching out, but note that I simply have no interest at the time. This approach versus ignoring the call or email only takes a minute, and it is far more professional. In return I would expect the vendor to respect my position and my honesty.
Are there things that you miss from being an LP executive? Things you have not missed?
BLAKE: Believe it or not, I miss the excitement of the holiday season. I enjoyed all the aspects of itplanning, execution, and responding to the various curveballs that the retail environment throws you. It was a time when you really felt that you were contributing to the success of the company. I also loved working with the operation teams to create new programs for the stores, and the rapid changes in retail, such as mobile POS and new payment methods, would be a great challenge. The one thing I will never miss is receiving a call that one of your stores was robbed. My biggest fear was that someone would be seriously hurt.
HOLM: I really enjoyed being out in the stores with my field team, helping solve problems, and watching them advance and grow in their career. In my position at USS, I still get out in the field quite a bit, and am able to leverage my experience to help our sales team understand the daily challenges that the LP executive faces. One thing I don’t miss is the call that an LP agent had made a bad stop on a potential shoplifter.
McMENIMEN: There isn’t anything in particular that I miss about being an LP executive. In my position and in being so close to the industry, I still feel like an LP executive. I will admit that I do not miss the holiday and seasonal schedule. While I do tend to work far more hours than I did when working for a retailer, I like the control around the schedule, and it is no longer mandatory for me to work six days a week around the holidays or to be in a store. That’s kind of nice.
PALMER: Probably the only thing I miss is the opportunity to see one of my people emerge and advance in the profession. I was very fortunate to work with several great individuals who have gone on to success in our industry. In my current role, I’m glad that I’m able to stay active in this area by providing coaching to those I can assist, whether that be through formal mentoring or simply ad-hoc career advice.
ROSENTHAL: I miss the camaraderie of team. I have been very fortunate in my career to work with and network with some truly great people; most are still very good friends today. Sure, I don’t think anyone misses the budgeting process, but I have traded that for forecasting and sales quotasnot sure which is worse! I truly enjoyed my time in the LP world. It is a great experience and a great career choice.
In your role as a practitioner, you managed a budget inside a large corporation. Is there a different attitude or challenge managing the budget of a small company that may directly affect your personal finances?
MAY: In my capacity as CEO of LPI, I am responsible for making sure we deliver a budget that affects every aspect of my cash flow. I find this to be a much more intense exercise. Even though the budget I manage today is somewhat larger than when I was a director, the process in terms of line items is relative on a comparative basis, but the stakes are much higher.
McMENIMEN: There are several differences with the biggest being the ownership you have over the process. It’s one thing to be allocated certain dollars and to put them into certain buckets to allocate for payroll, projects, services, and so on. As a business owner you also have to cut the actual checks. When I worked in retail, if there was an issue with budgets or a situation regarding the need for additional dollars, there was a process and, in most cases, a larger account to pull from if needed. As a business owner, that money is coming from your own pocket, and the headaches and pressures are much greater when you have to move money from your personal bank account to cover payroll or a capital expense. There is also more control around a budget plan in a large company than with that of a small company. With the larger company, you are allocated dollars that, while you may have to trim back or even give back some over the course of a year, for the most part the dollars are the dollars. In a smaller company, the sales performance greatly impacts budgets that have to be adjusted on a quarterly, monthly, and sometimes even daily basis.
PALMER: Being outside the large corporation, I have more freedom to do what’s right for the business in the long-term. I’m gambling with my own money, so I have the chance to invest in activities that might be hard to justify in a corporate situation. I’m afraid many organizations have a very narrow view on investments and budgets due to pressures from analysts on Wall Street and, as a result, have erratic performance patterns.
ROSENTHAL: I look at it as all the same. On the LP side, it is a business and not all about catching bad people (even though that is a big part). It is identifying your losses, utilizing your resources effectively, reducing shortage, and bringing dollars to the bottom line without impeding sales. On the sales side it is about knowing your customers, knowing their business, understanding their needs and obstacles, and most effectively identifying what they need, all the while managing product availability, cost, and, most importantly, implementation and execution of solutions to them.
Your present role takes you into a broader spectrum of retail segments, such as big-box, grocery, restaurant, and department store, than you experienced as an LP executive. Have you found differences in the purchasing process or priorities?
BLAKE: There is. While overall profit enhancement is still the goal, different attributes of the business are important for different companies. For example, exception-based reporting in the grocery environment focuses more on cashier performance metrics than the traditional front-end theft scenarios. The food-and-beverage segment has a completely different set of overall challenges, plus specific requirements for the various types of restaurants, such as quick serve, table service, bars, et cetera. You have to craft solutions that meet those business needs.
MAY: Each of these industries is unique in their go-to-market strategies, margins, customer demographics, employee demographics, how they measure loss, customers, and store site selection criteria. As a result they do have different priorities, but not necessarily a different purchasing process.
McMENIMEN: I think the differences are tied closely to the type of business and the margins in that business. The spending and the priorities in grocery or restaurant are very different in comparison to department store and specialty retail. The budgets appear to be much tighter and the process for which projects get approved for funding appear to be less autonomous and far more detailed and requiring justification and approvals at a higher level. It also varies with the threats against that business, where a fast-food restaurant or convenience store, for example, will have a far greater emphasis and spend on preventing robberies than will a large department store because of the emphasis on cash payment and thus the availability of cash in a store.
ROSENTHAL: Every company has different processes and procedures for making purchase. From the LP executive to procurement, you have to know how to navigate through each individual company’s layers to be effective. You need to make good contacts within each department and understand the companies procedures and never assume they are all the same or even similar. For example, there are differences in purchasing procedures between public and privately held companies, not to mention the difference in selling to the military exchanges. The most fascinating and interesting part for me is learning about each of the vertical markets, understanding their needs, and the differences in what the root causes of loss are within each.
In what ways, if any, do you think the decision making on purchasing products and services has changed in the past decade?
BLAKE: Return on investment has always been important, but it has taken on a much more substantive role in the decision-making process. This includes the impact the results will have on financial measures, such as shareholder value. In addition, purchasers are not competing just for budget dollars; they are competing for that rarest of commoditiesIT resources. Nothing that is done in retail is done without considering the impact to that area.
HOLM: The major change I have seen over the past couple of years is the involvement of a company’s procurement department, where they negotiate pricing and present options, with the LP leader having input on the final decision. Many variables are looked at, and pricing, although important, is not the only factor considered. Also, I think that working closely with the LP team to develop an ROI model that can show the cost benefits is critical. We have used this tool with great success, and it has been met with great enthusiasm from our customers.
MAY: Early in my career as a director of LP, I relied on limited test environments to make purchasing decisions generally with limited input from other departments and specifically targeted at my department’s goals. Over the years and especially now on the vendor side, I’ve found purchasing decisions typically involve all major decision makers, including LP, store operations, finance, IT, and HR. Depending on what services I am proposing, it could also involve merchandising and distribution as well as outside consultants. The process is more collaborative with a goal towards consensus building among all participants. It has also become much more rigorous in terms of proving an ROI by applying scientific methodology with high levels of integrity in the key metrics and data analytics. No longer can you simply sell products and services on intuition or gut feeling. It has to meet or exceed the strategic goals of the retailers with full disclosure on the impact this purchasing decision will have on both internal and external customers.
McMENIMEN: I think the evolution here has been even more recent than ten years, but there is more process and approvals needed to buy products and more justification on ROI than ten years ago. This is a natural evolution given the changes in the economy, and the need to be tighter with every dollar.
ROSENTHAL: Companies are doing more due diligence than ever before when it comes to purchasing. Relationships are important, and buyers still want to buy from credible and trustworthy vendors. However, procurement has taken a stronger role in purchasing decisions.