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Dry Cleaner Turnaround
Aired July 30, 2005 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN CORRESPONDENT: Good morning everyone, I'm Betty Nguyen. "THE TURNAROUND" with Ali Velshi begins in just 60 seconds, but first, here's a look at the headlines right "Now in the News:" A suicide car bombing today in downtown Baghdad is blamed for six deaths including three police officers. Twenty-six people were wounded when the bomb went off outside the Iraqi National Theatre. Now, inside community representatives were developing demands for the committee that is writing a draft of Iraq's new constitution.
Two Discovery astronauts, they are wrapping up their first trip outside the shuttle. The six hour long space walk -- again about an hour late. Steve Robinson and Soichi Noguchi are replacing a GPS antenna on the International Space Station.
They're also testing new techniques for repairing a shuttle damaged in flight. NASA is expected to decide by tomorrow whether any repairs needed to be made to Discovery. We will have a live update next hour on "CNN LIVE SATURDAY."
One official says it looked like a fender bender when a roller coaster train at Disney's California Adventure Park rear-ended another train last night. Fifteen people suffered minor injuries in the accident on the California Screamin ride. That ride was closed indefinitely.
We have more news coming up in 30 minutes. The "TURNAROUND" with Ali Velshi begins right now.
ANNOUNCER: Next on THE TURNAROUND, a dry cleaning entrepreneur with an eye for detail but a blind spot for sales.
AMIN BATA, OWNER, PEPPER SQUARE CLEANERS AND LIBERTY CLEANERS: In 17 years I've never had to chase marketing.
ANNOUNCER: Can the CEO of a corporate giant help him mend his business before it splits at the seams?
GARY KUSIN, PRESIDENT/CEO, FEDEX KINKO'S: His biggest value to his company is to get out there and drive revenue.
ANNOUNCER: Small town service meets big city marketing.
KUSIN: You've got to ask for the orders.
ANNOUNCER: THE TURNAROUND begins now. ALI VELSHI, CNN ANCHOR, THE TURNAROUND: One steams and cleans the other copies and delivers. Two different industries, one goal, to always meet deadlines on time.
Welcome to THE TURNAROUND I'm Ali Velshi and we're in Dallas, Texas this week. The mentor for this episode is the CEO if the business services company FedEx Kinko's. And the business that he's going to help turn around is a local dry cleaner. I know what you're thinking, it doesn't seem oblivious but you're going to find out the have a lot in common.
VELSHI: Three hundred and eighty-seven million pants pressed every year, 1.4 billion pounds of clothing cleaned every year. As the clothes tumble the cash rolls in. Americans spend nearly $8 billion on dry cleaning every year. It's a dirty business but someone's got to do it.
Amin Bata got into this business of dealing with peoples dirty laundry back in 1986. Two years later, he opened his first store, Pepper Square Cleaners. In 2002 he opened Liberty Cleaners.
AMIN BATA, OWNER, PEPPER SQUARE CLEANERS AND LIBERTY CLEANERS: It's been a wonderful experience.
VELSHI: A wonderful experience that has hit many obstacles along the way.
BATA: We have faced challenges in the last three years, a shrinking demand for our services, a shrinking stream of revenue. Mainly because of retracting economy and increasing strain on overhead expenses, rents have gone up the roof, utilities have gone up the roof, supplies have gone up the roof.
VELSHI: Amin does a brisk business but his margins are tight. His income is just about 7 percent of his sales and he doesn't take a salary.
VELSHI: You've got a nice operation here.
BATA: Thank you.
VELSHI: I don't know if you need anybody's help. It looks like you've got a good business going.
BATA: I need a lot of help. As far as what I would like to see the mentor focus on -- focus on efficiency, focus on marketing, focus on being able to pull in the entire customer.
VELSHI: The man who is going to help Amin take his dry cleaning business to a whole new level is Gary Kusin, president and CEO of FedEx Kinko's.
GARY KUSIN, PRESIDENT/CEO, FEDEX KINKO'S: It's a go-to team here. I want to teach him about having a go-to team if his own.
VELSHI: Named "Entrepreneur of the Year" by INC. Magazine -- Gary, who currently sits on the board of Radio Shack co-founded Laura Mercier Cosmetics in 1985. In 2001 he joined Kinko's and in 2004 his company merged with FedEx. He now oversees an international company which offers customers an array of services including packaging and delivery, copy and printing, computer services and display signs and banners. With more than 1200 locations in 11 countries FedEx Kinko's expects to bring in $2.1 billion in revenue this fiscal year.
You as a mentor are directly related to the industry that the small business owner is in.
KUSIN: Well you know there are a lot of similarities between dry cleaning and FedEx Kinko's. We do a final check before we give our finished product to customers. I suspect they have to give a second final check -- there are lots of different types of customers. There are customers at dry cleaners who are extraordinarily price sensitive. There are others that really care about quality. So its opportunities for dry cleaners to literally segment themselves, to differentiate themselves. And they have to think like that. They have to think about who are their competitors and what is their value proposition. And that's where I'm looking forward to learning and talking with Amin about.
VELSHI: Well day one is under way so we're going to get you over there to talk to him.
KUSIN: Terrific, looking forward to it.
VELSHI: It's 10:30 in the morning at Pepper Square Cleaners. Amin is busy working in his office when Gary walks in.
KUSIN: Amin, hi my name is Gary Kusin, I'm the president and chief executive officer of FedEx Kinko's.
BATA: All right, it's great to meet you.
KUSIN: I'm looking forward to this.
BATA: I am too. I need all the help I can get.
KUSIN: Here's where the similarities are, they take in raw material that doesn't belong to them, they have to do something with it and the return it back. In that regard we're very comparable.
VELSHI: Gary begins by getting a quick tour of Amin's facility.
BATA: There is where they proceed to the front. And this is the bagging zone. She handles the body of the shirts.
KUSIN: You're employees do the have staggered starts?
BATA: Yes they have staggered starts. He's sewing some buttons now.
KUSIN: What's your average ticket to your walk-in consumer?
BATA: Our average ticket last year in 2004 was $21. KUSIN: OK.
VELSHI: From employee issues, to production costs. Gary's fact finding mission has provided him with important information. But before he lays out a strategy to help make Amin's company stronger, Gary gives him some assignments -- to conduct a customer survey and create a value proposition.
KUSIN: A value proposition to him is brand building. What do we offer here that nobody else is going to offer? What's going to set us apart? That must be set in stone, must be defined, must be verbalize and must be communicated. Once that is done we can run with it.
VELSHI: Next on the TURNAROUND, Amin finds out what his customers really think.
UNIDENTIFIED MALE: This service too expensive.
VELSHI: And later the phone call that can make or break this turnaround.
VELSHI: It's day one of the turnaround. A couple hours ago, Amin Bata, owner of two dry cleaners in the Dallas, Texas area gave his mentor Gary Kusin a tour of his Pepper Square Cleaners.
What do you think he can actually focus on during the course of this TURNAROUND?
KUSIN: My biggest hope is that all Amin does is realize that his biggest value to his company and to himself is to get out there and drive revenue.
BATA: The wealth of knowledge that he's got is just instrumental, I think he could benefit any business.
VELSHI: But Amin isn't worried about any business, he's worried about his own. Business is down and production costs are up. With Gary's help, Amin hopes things will soon turn around.
Market research is one of those things that small business owners don't think they have the money or wherewithal to do. Now Gary gave Amin a particular task, easy market research, just talk to the customers that come into your store, ask them what you do that they like, ask them what you do that they don't like and ask them what you can do better.
UNIDENTIFIED FEMALE: Prices.
BATA: OK, change prices. But raise them right?
UNIDENTIFIED FEMALE: Raise prices, yes.
UNIDENTIFIED FEMALE: You all remember my name. Your honesty and your dependability.
UNIDENTIFIED MALE: Good service, good friendly people, too expensive.
UNIDENTIFIED FEMALE: That they deliver again.
UNIDENTIFIED MALE: My information on this ticket . . . .
BATA: On the claim check, that's a good one.
UNIDENTIFIED MALE: Identity theft.
BATA: The thing that I was most proud to learn was they come here because of the people up front and the way that they were treated.
The biggest surprise was the concern for security, putting the addresses of the customer right below their name on every claim check that we print. I found out today they don't like that. The other piece of information that I got was a lot of them want route service. They want to be delivered and picked up from at home.
VELSHI: The desire for a route service is a surprise to Amin. It proves his marketing is ineffective because Pepper Square Cleaners does offer pick up and delivery.
At 1:15 Amin meets with Gary and Tom Leverton, FedEx Kinko's senior vice president of markets and strategy to go over the results of his survey.
KUSIN: Did you learn any thing?
BATA: I've learned a lot.
KUSIN: Let's go to the likes.
BATA: Everybody knows my name.
KUSIN: OK, so they feel like they're a valued customer and they're getting recognition when they come in the door. Very important, that's great.
BATA: Good service, friendly people. That was it for the good.
Here's what you don't like, would like to change, would like to add or would like to remove. The first one that really shocked me was our claim checks. The claim check has last name, first name and then it has the address of the customer. They don't want that.
KUSIN: Confidentiality, its security . . .
BATA: Identity theft.
KUSIN: Well that's very interesting feedback, isn't it?
BATA: Yes, it is. We did get one delivery request and she never knew that we had it even though it says it right there on the van.
KUSIN: Fascinating. Isn't it amazing what happens when you talk to your customers?
BATA: It's incredible. We've got too expensive three times.
KUSIN: Were you able to explore more than that? Like I could pay 10 cents less for a shirt or it's a penny less down the street or it's a dollar more? Did you get any more?
BATA: No we didn't get them to elaborate.
VELSHI: But Amin realizes his prices aren't expensive after all. He explored the pricing at some of his competition and discovered his prices, like $4.50 for a pair of pants are lower.
BATA: We are at $4.50. We have one competitor here that's at $5.99. This one here is $4.75. The one that's the oldest player in town is at $5.19.
KUSIN: If you were at $4.99 -- which is a very good retail price point -- you would be increasing your average ticket here on slacks by 10 percent. Its 30 percent of your entire revenue. So 10 percent times 30 percent, you would move your margin as a company by three points. One item, one price change gets you three whole points on the bottom line.
VELSHI: Market research isn't necessarily expensive. It's not about going out and hiring experts.
KUSIN: He has so much data. He can figure out how to market, how to market to and what its worth out of hits existing cash register. He's got a lot of tools.
VELSHI: The next two hours are spent at the drawing board. Gary lays out strategies for bringing in new customers, retaining the old ones and helping Amin distinguish himself from the competition.
KUSIN: Spotless clothes that's important. Give me another one.
BATA: Ready to wear. Tea and coffee in the morning. We grantee in by nine out by five. I would say multiple services. I other words, the one stop shopping.
KUSIN: That's a good group of promises for a customer.
VELSHI: But brain storming is only part of the solution. Now Amin needs to figure out how to communicate his promise or his value proposition to his customers.
TOM LEVERTON, VP OF MARKETING, FEDEX KINKO'S: What are those two or three things that you want to promise somebody when they're walking in that will make them want to come back? And one more point, what kind of visual changes can we make inside the store so when they come in they understand the promise that they are trying to deliver to them?
VELSHI: You really seemed to embrace this.
BATA: Absolutely. I think that is where the merit is in this entire process, to find out where the improvements are needed, where we can improve things and them come out ahead. That's the part that I'm embracing is to see where we can make changes.
VELSHI: And changes mean more homework for Amin.
KUSIN: We want to refine your value proposition, exactly what your brand promise is going to be. We need you to be very specific and focused on that.
VELSHI: The first day of this turnaround in Dallas, Texas is over. We've paired a small drycleaner with the CEO of FedEx Kinko's. Well our mentor has given Amin Bata, the dry cleaner something to think about. But mostly today has been conceptual. Tomorrow they're getting down to practical tasks.
Are you clear now on what your homework is for tonight?
BATA: Yes, there's tons of it. I'm clear about it.
VELSHI: Next Amin isn't clean on his assignment after all.
BATA: That's a good one. I need help on that one. And later Amin tries to land a large account, but will he seal the deal?
KUSIN: The most common mistake people make, they don't ask for the order. You've to ask for the order.
VELSHI: Coming up on the TURNAROUND.
VELSHI: Branding and marketing, it's important to the success of any small business in America. It's going to be particularly important to the success of the small business that we're trying to turn around here in Dallas. Welcome to day two of THE TURNAROUND. Our small business owner Amin Bata runs two dry cleaning operations in the area. Our mentor is the CEO of FedEx Kinko's. Well the CEO Gary Kusin a lesson in business yesterday and sent him home with some homework. Think about the things that make his dry cleaning operation different from the 2000 other dry cleaners in the Dallas area.
Tell me about his attitude, how do you feel about how you were received. And whether or not he's embraced this project adequately.
KUSIN: I think Amin has had a very open mind about everything we've talked about so far. I can tell that moving him into sales and marketing is pushing his envelope. So now if we can give him some real tangible ways to think about marketing and to operationalize them in a way that works for him, I think that we're going to have a winning opportunity here. I think he could turn this around.
VELSHI: It's 10:30 A.M. Amin meets with FedEx Kinko's Senior VP of Sales John McDonald for a quick lesson on generating sales and building a reference account.
One area Amin wants and needs to improve on upon is bringing in larger accounts. He already services three department stores, two tailors, three high schools, five bridal shops, and one retirement home but that's not enough.
BATA: All that business came in as referral and we didn't chase it. We waited for it to come to the door. Gary is telling me we can't wait anymore. We need to go out there and purse it.
JOHN MCDONALD, SENIOR VP OF SALES, FEDEX KINKO'S: Absolutely. And would any of these customers that you have today be willing to be a reference for you?
BATA: Yes they would. I verified with the two public schools and they're willing to do it.
MCDONALD: There's nothing that works better than that kind of reverence where people are willing to say what a great job you did. That would be good for business.
LEVERTON: Good to see you.
BATA: Good to see you, too.
VELSHI: Amin meets Marketing Vice President Tom Leverton at a nearby FedEx Kinko's location to design marketing and sales materials to attract new customers. First on Tom's agenda is a new storefront.
LEVERTON: Here is a picture of your store. You really have three walls that we can do something with. I know you do pants, I know you do shirts. How would you want to try to drive home a few messages, things that I might not know that you do?
BATA: The display with Oriental rugs, the display with the wedding gowns, the display of draperies. That would be an idea, we could display those items that are finished products, finished goods that are ready to be picked up, paid for.
LEVERTON: What about showing punchy pictures of them instead of the actual products? Then it will be a cleaner look, a little bit more modern and that hopefully will help inspire confidence, which is essential if you're going to try to promise quality.
BATA: Exactly. VELSHI: Amin has become fond of using the term value proposition over the last couple days. It's the reason why customers would use his dry cleaner as opposed to someone else's. Well now he's here getting some good advice on how to get the good ideas from here on to here.
LEVERTON: When we talked yesterday about trying to communicate one or two things to the customer, that promise side, I think that's something you want to think about bringing out.
BATA: That's a good one. I need help on that one. We've got so many ideas, we can't put it into words.
LEVERTON: And that's the challenge. When you're talking to a customer you only get one shot to do it. So it needs to be something clean, it needs to be something short. Your whole promise and your hook.
BATA: I've got a thought on that, our emphasis on button checking. That's a continuous issue. If a garment is not ready to wear, it comes back. So we have triple checks on buttons on both dry cleaning and laundry.
LEVERTON: I don't like triple check.
BATA: It's too technical isn't it?
LEVERTON: Yes it is. Maybe we point out the inspection.
BATA: We inspect your garment three times. Your clothing is checked for these four items before it leaves.
LEVERTON: We guarantee our results down to the button.
BATA: There you go. That's what our core value could be right here. Our strong point, our value proposition. What do you think?
LEVERTON: I like that better. I like it a lot.
VELSHI: With Tom's help, Amin comes up with a first draft of his value proposition and a new design for a storefront. An artist creates a mock up of the plans and after the close of business tonight, a FedEx Kinko's design team will turn Amin's vision into a reality.
Now Tom and Amin work to come up with an advertisement that can e hung on outgoing orders.
LEVERTON: The goal here with any of these marketing issues is to step back from you business and try to think like the customer. You want to change the customers actions. You want them to either come to you more frequently, come to you exclusively or bring you jobs they don't bring you today. Those are your three goals, what do you tell them?
BATA: I want to tell them about jobs they don't bring in frequently. It's going to be household items. It's going to be the draperies, the area rugs.
LEVERTON: With something like this you can either have an educational piece or a call to action. Education is, did you know we did these pieces? You put your brand on there, you put your phone number and you're done. The call to action is bring in your pieces now because you're going to get a benefit for it, 10 percent off or a benefit. Which do you want these pieces to be? The both have a value.
BATA: We could do a 10 percent off.
LEVERTON: Now going for a call to action. Now how do you want to word these? Do you just want to say, oriental rugs, draperies, wedding gowns?
BATA: We could do some wording here regarding spring cleaning. Bring down your draperies, roll up your rugs.
LEVERTON: There you go, that's great.
VELSHI: Are you getting somewhere with this?
BATA: I'm getting a lot of places with this.
VELSHI: You hadn't really separated the values of your operation from that of other dry cleaners. You haven't quite understood how to tell people why to come to you as opposed to just get their clothes dry cleaned.
BATA: That's been the goal since yesterday is to verbalize what we do behind the scenes. Put it in words so that we can go and display it in everything we do.
VELSHI: Coming up Amin presents his value proposition to Gary.
KUSIN: You may want to incorporate yourself into this because you personalize it.
VELSHI: Then Gary gives him his biggest challenge yet.
KUSIN: We have a lead for you. We would like you to go in and make a pitch tomorrow.
VELSHI: Next on THE TURNAROUND.
NGUYEN: From the CNN center in Atlanta, I'm Betty Ngyuen. "THE TURNAROUND" with Ali Velshi continues in just one minute. But first, here are the headlines.
President Bush goes in for his annual checkup. He arrived at the National Naval Medical Center in Bethesda, Maryland, this morning. Now, last year, doctors declared the president in superior shape for a man his age. He's 59 years old.
Also today, President Bush is expected to meet with wounded troops at the hospital. And we will get a live update on President Bush's health at the top of hour on CNN LIVE SATURDAY.
The man police believe is the would-be bomber of London's Shepherds Bush train station train faces his first extradition hearing in Italy. Hussain Osman was arrested yesterday in Rome hours after arriving in the city. Authorities say both Scotland Yard and Italian police tracked Osman through a cell phone, which he carried with him.
More on the London terror probes, that's today. It happens at noon, Eastern.
And a group of astronauts say an object they discovered in the far reaches of the solar system is large enough to be classified as a possible tenth planet. Researchers believe it's bigger than the planet Pluto. We'll have more on this story next hour on CNN LIVE SATURDAY.
There's a lot more coming up, including news, in just 30 minutes. "THE TURNAROUND," with Ali Velshi, continues right now.
VELSHI: Become back to THE TURNAROUND. I'm Ali Velshi. We're in Dallas Texas, where our small business this week is a dry cleaner. Now, we've paired him up with the CEO of FedEx-Kinko's, and our dry cleaner seems to think that it's the quality of work they do here which sets him apart from his competitors. He is, however, having trouble getting that message out. And that's what he's working on today.
(voice-over): In order to market his business more effectively, Amin's mentor, Gary Kusin, suggested that Amin work on his value proposition. Back at Pepper Square cleaners, Amin presents the new hanger ad he's designed, which includes his value proposition, to Gary. But Gary doesn't like everything he sees.
AMIN BATA, OWNER, PEPPER SQUARE CLEANERS: Here's our core proposition. Inspect every aspect of your garment, right down to the last button.
GARY KUSIN, PRESIDENT/CEO, FEDEX-KINKO'S: Do you like the font size on that? I'm surprised it's not bigger.
I noticed everybody that comes in here says, "Hi, Amin," to you. You may want to incorporate yourself into this, because you personalize it, you make it real.
BATA: I could say my promise instead of our promise.
KUSIN: It's worth a conversation.
VELSHI: For now Gary's work at Pepper Square Cleaners is done. But he wants to check out Liberty Cleaners, Amin's second location. The 2,000-square-foot facility is a smaller operation than Pepper Square and brings in considerably less revenue.
KUSIN: SO walk me around here.
BATA: I sure will.
VELSHI: Amin takes Gary through the operations at Liberty Cleaners. Gary realizes that many of the answers for Amin's problems lie right at his fingertips.
KUSIN: How do you keep receipts?
BATA: We can pull them up how much each customer...
KUSIN: So if I was a regular customer of yours, could you pull me up and see exactly what I bought from you this year?
KUSIN: Oh, my gosh.
BATA: The number of times, and how about tickets, and what your total spending is so far.
KUSIN: You're going to make me cry. I'm telling you, that's all there. You've got everything you need. You've got to do a sort. You should find out from the biggest to the smallest of your customers in that for the last 12 months. I would love to know.
BATA: I can do a customer...
KUSIN: I would love to see that.
VELSHI: Amin pulls up customer records for the past year. They focus in on the top 20 percent of the highest paying customers. Out of the 196 regular customers, 39 of them bring in the most revenue.
KUSIN: Look at the rapid drop off here. From your biggest customer does over $4,398, down to $218. What that means is, in here, your top 20 customers, and you can see them up here, you need to be on a first-name basis. You need to know everything about them and their lives, and you need to be going out to their house to pick it up.
The 20th percentile customer came in three times last year, spent 70 bucks a trip. But you know what? That's a conversation you say with them, "You know, we love you, man. How'd we do. Did we do OK? Why are we only seeing you three times a year?" There is a treasure trove of marketing opportunity here for you.
VELSHI: In addition to giving business advice, Gary has also been formulating a major challenge for Amin. A pitch meeting with a high-profile department store.
KUSIN: We have a lead for you. We'd like you to call them, we'd like you to make an appointment, and we'd like you to go in and make a pitch tomorrow. It's Stanley Korshak. They're very interesting in listening to your pitch. Stanley Korshak is one of the very top retailers in Dallas. For him to get an opportunity to pitch them is an enormous opportunity for him.
When's a good time that you could do that tomorrow?
BATA: Sure, let's do that right now. It would be outstanding to land them. Whether they use us out of their alterations department, out of their bridal salon, out of their special events merchandizing, out of their personal shoppers.
That would be a privilege. That would be an honor to be able to service them. It is exciting. It's very, very encouraging to get that lead from Gary.
Hello, John. Amin Bata. Is Suzanne Warner available?
Hi, Suzanne. Amin Bata with Pepper Square Cleaners, how are you today?
VELSHI: Amin sets up an appointment for tomorrow and Gary offers some last-minute advice.
KUSIN: Let me tell you what the most common mistake people make in the sales, in the pitch, is they talk wonderfully about their product, their value proposition, their services. But they get to the end, they don't ask for the order. You've got to ask for the order.
VELSHI: In other words, close the deal.
BATA: This is the first effort in marketing by myself, with the guidance of Gary. In 17 years, I've never had to chase marketing into department stores, or anything like that. So this will be quite an opportunity.
KUSIN: Tomorrow is a new day. And let's see how you hit the ground running tomorrow. OK?
BATA: All right.
KUSIN: Look forward to it. I am very excited.
BATA: I am, too.
KUSIN: I will probably put on a tie, for tomorrow, if we're going to Stanley Korshak.
BATA: All right.
VELSHI (on-camera): Day two of this turnaround is over. Our dry cleaner, Amin Bata, has done very well so far. He's identified a brand for his company, the thing that separates his dry cleaner from others. He's even put that on paper and developed some graphics for it.
But, fundamentally, he's an operations guy. So his big challenge comes tomorrow. He has to put his marketing hat on. He's meeting with one of Dallas' premiere clothing retailers, and he's going to pitch them on giving him their dry cleaning business.
(voice-over): Coming up, will Amin be able to seal the deal?
BATA: I didn't think about the obvious.
VELSHI: And the storefront's transformation grabs Amin's attention.
BATA: The button was a surprise. I didn't think it was going to be as big as it is.
VELSHI: Next, on THE TURNAROUND.
VELSHI (on-camera): Day three of this three-day turnaround has begun at this dry cleaner in Dallas, but the big changes aren't going to be the physical ones, here. They're going to be the ones that Amin, our small business owner, undertakes.
He's going to meet this afternoon with one of this city's premiere retailers. If he can win their business, it could be the beginning of something new for him.
BATA: Day three, a lot of big things happening.
VELSHI (voice-over): Big improvements, and hopefully, big improvements, that'll put a new spin on Amin's dry cleaning business. 10:00 a.m. While a FedEx-Kinko's design crew gives Pepper Square Cleaners a facelift, Amin meets with Larry Rogero, FedEx-Kinko's director of environmental affairs. He gives him some energy and money-saving tips.
LARRY ROGERO, DIRECTOR OF ENVIRONMENTAL AFFAIRS, FEDEX-KINKO'S: What do you spend on electricity a month.
BATA: Electricity averages anywhere between $1,200 to $1,800 a month.
ROGERO: You could work with your landlord and potentially put skylights in here so you could bring natural lighting in. There are called T12 lights and you can put in T8 lights. Same brightness, same color, uses about 70 percent of the energy that you would normally use.
VELSHI: Beyond the physical plant, Amin is also looking to improve the quality of life for his employees. Between his two stores, he has 16 full-time employees who work 40 hours a week. After a year, he gives them one week paid vacation, but he hasn't been able to give them a raise in three years. Amin wants to do more for his hard-working staff, but he can't afford to. Tracy Brightman, vice president of human resources for FedEx-Kinko's, is going to help him achieve that goal without having to shell out of a lot of cash.
BATA: We need to know ideas for rewards and recognition.
TRACY BRIGHTMAN, VICE PRESIDENT OF HUMAN RESOURCES, FEDEX- KINKO'S: And that's a great thing. There's so many studies out there that show that -- money's obviously a part of why everybody works, but it's really not the determining factor on why people stay at jobs, or why people will leave jobs.
And never underestimate the value of the things that don't cost any money. The "thank you for what you did", pat on the back for a job well done.
VELSHI: Tracy suggests Amin can do simple things, like name an employee of the month, recognize staff birthdays, have a pizza party or a potluck, and maybe even give $10 gift cards for a job well done.
BATA: She gave me some wonderful ideas, non-monetary ideas, on how to reward employees.
VELSHI: 12:30. Amin's meeting with Stanley Korshak, one of the largest department stores in Dallas, is moments away.
(on-camera): Your meeting is about 45 minutes. How do you feel about it?
BATA: Pretty good. A little overwhelmed, but not nervous. I think I'm okay.
VELSHI (voice-over): A lot rides on this presentation. If he does well, it could help him expand his operation.
BATA: If we can land this one, this will set a benchmark for us. We do a couple of other high-end stores. A third one, on our perspective, will just add to our value.
KUSIN: I'll be looking for presence. I hope that he's wearing his nicest suit.
VELSHI: Besides a nice suit, Gary will be looking at Amin's overall performance, and more importantly, to see if he remembers to close the deal.
KUSIN: The most common mistake people make, they don't ask for the order. You've got to ask for the order.
VELSHI: 1:30, wearing a newly pressed suit, Amin arrives for his meeting with three Stanley Korshak executives.
BATA: Hi. Suzanne, Amin Bata. Good to meet you. Thank you very much for allowing me to come and introduce myself and explain some our services at our cleaning operation. VELSHI: Amin begins his pitch while Gary watches his every move.
BATA: We do everything from special events merchandizing to quarterly rug cleaning.
VELSHI (on-camera): Amin's been pretty cool and collective over the last three days, and that's because he's been around people who have been here to help him. That's not the case, here. Our mentor, Gary Kusin, introduced Amin to one of top retailers of men's clothing in the city, and Amin is pitching them on using his as one of their service providers. Let's see how he's doing.
KEITH CARLISLE, BUYER, STANLEY KORSHAK: What about men's tailored clothing? They're almost fragile, and they have to be pressed in just a certain way.
BATA: The secret to avoiding steam impressions is to use either no moisture or very low moisture.
SUZANNE WARNER, BUYER, STANLEY KORSHAK: On men's dress shirt, quite often we recommend not having a starch. How do you handle a process like that, when it's no-starch?
BATA: There should be a separate head for the no-starch shirt. There should be a separate head for the starch shirts. If the plant maintains two sets of presses, then no-starch customers will always be happy.
CARLISLE: And you maintain two presses?
CARLISLE: That's interesting. I'd never heard of that. Very interesting.
BATA: It was great to meet you guys.
VELSHI (voice-over): 20 minutes later, the meeting is over. Amin thinks it went pretty well.
(on-camera) How'd it go? How'd it feel to you?
BATA: It felt like a lot of information going back and forth. And I kind of got a sense of what they're looking for, what we may be able to provide.
VELSHI (voice-over): But Gary points out that Amin forgot the golden rule of sales.
KUSIN: I'll kind of start with what I think was perhaps the most egregious thing. You really had them where you wanted them. They were eating out of your hand. You didn't ask for the order. And that is the most important thing about a sales call.
BATA: My reasoning for not closing with it is, didn't think bit. I didn't think about obvious. The obvious is, "When do we get the job?"
VELSHI: And while he did show off his knowledge of the dry cleaning business, Amin's presentation wasn't seamless. Gary offers some tips that help Amin in future sales calls.
KUSIN: The first part of a sales call is small talk. And here, the small talk would have been, "Wow, this is a beautiful store." Then the next stage, you asking questions of them. "Tell me about your business. Tell me what your needs are in dry cleaning."
Now you go into your value proposition. And your real value proposition to them is quality. And you communicate that through your knowledge of the business. The next stage is, "Any questions of me?" And in the end is always, always, always, the close. The ask for the order.
VELSHI: Nonetheless, Gary thinks Amin did make a good impression. And the Stanley Korshak people agree.
(on-camera): He had, I thought, some very confident answers.
CARLISLE: He was very confident.
WARNER: He knew his business very well.
VELSHI: Your level of confidence in a cleaner probably has to be higher, even, than the average consumer's level.
CARLISLE: Just because of the nature of the fabrics that we sell.
VELSHI: Do you kind of feel that he gives you that sense of confidence? Do you feel that this is somebody you could do business with?
CARLISLE: I do.
WARNER: I thought he was very informative and very knowledgeable.
CARLISLE: I thought we'd stump him on something. We didn't.
BATA: It is exciting that the meeting went well because it was an opportunity to start a new process, something that we haven't pursued before. This is a new venue.
VELSHI (voice-over): Coming up, Amin sees his new storefront for the first time.
BATA: Oh, my goodness. Look at that. This is something to flaunt.
VELSHI: And he reflects on his turn around.
BATA: We're going to start a new day tomorrow.
VELSHI: Next on THE TURNAROUND.
UNIDENTIFIED MALE: The guy who ran Yes, We Care Landscaping is a 29-year-old landscape-gardener in Chicago. And his big problem was that he was extremely dependent on his family for money. His mother had sort of bankrolled the business, going in. And just for moral support, generally, he tended to go to his parents for advice.
One thing we advised him to do was, you know, set up an independent board from business schools, bankers, people who work pro bono, and just, sort of, take a cold, hard look at the business every six months or so and give unbiased advice. And he did that.
VELSHI: It's the final day of this three-day turnaround in Dallas. Our small business owner is Amin Bata, a local dry cleaner. Our mentor is Gary Kusin, the CEO of FedEx-Kinko's.
Gary found Amin to be a hard worker with a keen eye for operations and a commitment to quality. So over the past three days, Gary has given Amin some tasks to complete. Tasks designed to help him differentiate his business from the competition.
The tasks have included developing a value proposition, to articulate Amin's commitment to quality, getting more aggressive about marketing, something that Amin has shied away from in the past, and redoing his storefront, freshening it up and using it to underscore Amin's differences from the competition.
BATA: The surprise of it all has been to get the storefront to say what we've always done. To put that wording on the walls, to put it all over where the customers can see it in pictures and words, getting our message out to the customers that we haven't got out in the last 17 years.
VELSHI: The storefront redesign at Pepper Square Cleaners is almost complete. It's finally time for Amin to see his storefront vision come to life.
BATA: Oh, my goodness. Look at that. This is something to applaud. They did a great job.
BATA: Thank you very much.
KUSIN: In my mind, the ribbon cutting is much more than a ribbon cutting. It symbolizes, to me, especially in this case, a new day, a new beginning, a new approach to business. It's the same physical location, but it's not the same.
BATA: The idea of putting the name in the middle and putting six services, three on each side of our name, was important because those are services that complement our traditional cleaning laundry.
The button was a surprise. I didn't think it was going to be as big as it is. The button is our promise that the clothes are cleaned and pressed, but they're ready to wear. That is our message. A big button for a big promise.
VELSHI: And remember those hanger ads that Amin designed?
BATA: What do we have here? It's a hanger holder. Look at that, I love the colors. I love the three different services here. I love it.
TOM LEVERTON, VICE PRESIDENT, FEDEX-KINKO'S: You have 1400, which should keep you busy for about two weeks. And you know where you can come by for some more.
BATA: All right. That sounds great. I appreciate that. Thank you.
VELSHI: And that's not all. FedEx-Kinko's Vice President Tom Leverton, presents Amin with a demographic map to help him target his business expansion more effectively.
LEVERTON: What this shows is the income, by neighborhood, in your surrounding area. The darker the green, the higher income those neighborhoods are, and the more likely they are to have those big elephants that you want to get.
BATA: I'm very optimistic about following up on the marketing plan.
VELSHI (on-camera): Give me your sense of where Amin is on the road to a turnaround.
KUSIN: Well, I think Amin has all the tools. He had it in him when he started, he has it in him now. I think the next 30 to 60 days are going to tell the story. I think he's good to go and I expect he's going to be spectacular.
VELSHI: So he understands what he needs to do to be successful?
KUSIN: I give him an A plus.
VELSHI: Alright, now, whenever you get an A plus on something, or any grade, there's always a little section with comments. So I know that you've got a couple things you want to talk to Amin about. I'm going to let you talk about that alone.
KUSIN: Okay, great.
You've been drinking through a firehouse, literally, for three days. And if you can only remember a couple of things, I would like you to remember these things. You are the CEO of your company. You're going to have to drive your outside sales.
So you're in charge of marketing and sales, and what marketing means is understanding your customers. It means pricing. You already identified a way to raise your margins. And then being sure that every that way you face your customer, from the front of your store to the materials that you leave behind with customers, are up to the image you want to portray. I think those are going to be your new keys to success.
BATA: We're going to start working on it.
LEVERTON: I want him to see that this isn't just a one-time event. He needs to take this to the next level.
KUSIN: I'm going to give him an assignment. I'm going to tell him to call me in a month. I'm not calling him. He has to believe that there's some value add in him picking up the phone and calling me and seeing if I'll meet with him or do whatever. If he does, I'll be all over it. But he has to care.
Amin, good luck to you.
BATA: Thanks so much.
KUSIN: You bet.
KUSIN: I can't tell you how much our whole team enjoyed this exercise. We had a spectacular talent in Amin and a great business. We loved it.
BATA: We're going to start a new day tomorrow. We're going to start with Gary's ideas. A new way of marketing, a new way of looking at our values, a new way of communicating those values. And we're going to start doing them every single day.
VELSHI: Now some people would say you can't really turn a business around in three days. This certainly looks like a new business. A lot of changes in the front, the marketing materials. And it's not just cosmetic. There's been a real change in Amin Bata. He's gone from being the guy who runs his business to being the guy who markets it.
He has the tools to make a difference, now. What he does with them is up to him. I'm Ali Velshi. See you next time on THE TURNAROUND.
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