Naomi Simson is the founder and CEO of online gifting and experience company RedBalloon. She also happens to be one of SmartCompany's very well known bloggers. Naomi shares how RedBalloon is adjusting to the downturn, how she's saving time (and still hiring staff) being more productive, and what she is seeing in the marketplace.
Amanda Gome: You're ahead of budget, you're doing well, you've got sales of around $20 million?
Naomi Simson: $22 million we're going for.
So you've had a few good years. What are you seeing out there?
Our consumer business is really still strong, and I think it's because people still want to give a great gift. You know if it's somebody's wedding, a 40th birthday, a 60th birthday, they don't really want to skimp on that. Or maybe more people are going in together and it's more important to think about what they are going to give somebody.
The whole clutter conversation has worked for us as well obviously, because you can give somebody a pen or a vase but ultimately what people want more is to be with their family and friends. So I think on the consumer side it's a relatively inexpensive spend.
Also people aren't going overseas as much. Even with currency, people are confused; they can't guarantee what it's going to cost so they spend more in Australia. Our business of course is representing over 900 small businesses in Australia. So if you spend with us, it stays in the country.
But we also have a corporate side to our business, and we have more than 1400 corporate clients that are running reward and recognition programs, corporate gifting programs, sales incentive programs, sales promotions - and we've seen a significant uplift in sales incentive programs.
And why's that?
I think it's because most organisations are looking for discretionary effort. They want to make the "one more" sale, they want to make the "one more" thing... So the sales person is commissioned on selling a car for instance, but they want to change the behaviour so the salesperson says "would you like an extended warranty with that?". The salesperson might well get a RedBalloon voucher to support that. And so we're seeing an absolute uplift in sales incentive programs in all sorts of industries.
But recognition programs, which I'm concerned about, they seem to be taking longer to get off the ground. So within corporations where one person or two people may have signed off a program before, it now seems to be going to committees or to boards and taking a lot longer.
So how have you helped your sales people cope with that change?
One of the things is that we're talking to more sales and marketing people - the people that have the sales incentive budgets. The other thing is that we're offering to support our corporate clients by speaking to their leadership teams.
Our Little Red Book for instance is all about the importance of employee engagement, and that you can absolutely demonstrate increased profitability if you have an engaged workforce. And people need more than ever an engaged workforce.
Do you yourself go on some of those calls to meet the leadership teams?
Oh absolutely. Half of my role is being with our customers. I have seven clients that I work with myself in terms of designing their programs.
How many employees do you have?
We're still recruiting. I recruited four new people in the last month and we're just about to tip 50.
And you've read Michael Gerber's book on working on the business but not in it.
Well, I looked at the cover. Does that count?
It's quite an interesting question. As you grow to a larger company, how much time do you spend still selling? I would be like you, I would still be out there with the most important customers, seeing them, talking to them, and selling.
I do it because I want to stay connected. I'm really clear about why I'm doing it, but my role is 50% internal. My role is all about the vision. Making sure that people know why we're in business. We're changing gifting in Australia forever.
I've written a vision document for the end of next year. It's all documented. So my job is to make sure that everybody in the business knows where they are going and why we're doing it.
The second part is it's all about the values. It's who we are. People can't copy who we are and the relationships that we have. So my job is to make sure that the people we do recruit in, our suppliers, people that are around us, are living the same values that we are. And the third part of my role internally is alignment and that is making sure that we are all going in the same direction.
So how does that fit in with what we were just talking about, with going off and doing sales?
I wouldn't say I go off and do sales. I would say I stay connected to the customer. So 50% of my role is vision, values and alignment and 50% of my role is external. That includes being with customers, and that includes answering the phone.
We don't have a call centre as such - we call it our pleasure relations team - but I am still coaching the people around me and working with them on developing strategies and how they would tackle certain calls and so forth.
And the third part of what I do is going and visiting customers, and you can learn instantly about how your business is going. I call myself the chief experience officer because I'm accountable for how people experience the business.