While business success can be measured in a number of ways beyond profits, some forms of recognition matter more than others. Like making the Inc. 5000 list of fastest growing companies. Or making one of the Best Places to Work lists.
While building a happy, engaged, and loyal workforce certainly creates a foundation for success, not every small business -- especially startups -- can pull off the combination.
That might seem especially true in the vehicle service contract business, since customers typically only call when they have problems with their cars. (A vehicle service contract is, in general terms, like an insurance policy for automotive repairs; if you have a problem with your car a CarShield VSC pays for repairs by any ASE certified mechanic.)
Clearly CarShield employees know how to turn a potential negative into a positive: The company has covered over 750,000 vehicles, paid out over $1 billion in claims... while maintaining a positive customer review average of 96 percent.
I talked with Steve Proetz, Carshield's President of Operations and an employee since day one, about how CarShield has become so successful.
And become a company where employees love to work.
Research shows that when employees feel promotions are handled effectively, turnover ratios are less than half industry average, productivity is higher, and stock returns are almost three times market average.
I wasn't aware of that statistic, but we almost exclusively promote from within.
For one thing, our industry is fairly specific. There aren't many competitors, and the ones we have are much smaller. So not that we would want to, but we can't really "steal" from competitors.
So when we hire people, many are referrals from current employees. We take that as a compliment since it means our employees are willing to recommend us to their friends.
Overall we look for energetic people, with great personalities, who are highly teachable. You can train skills, but you can't train attitude.
Once new employees are in the door, because we tend to promote from within they quickly realize there's a real path to advance and grow their careers.
Promoting from within typically results in less hierarchy; if I used to do a certain job, it's natural to step in when needed.
That's another thing that sets us apart: People don't wear particular hats.
We moved some departments around over the weekend and probably twenty managers helped the IT people move them. I did too. That's just what we do; the owners take out the trash if it's full. We really don't care about job titles, especially if they get in the way of getting things done.
We aren't a job title company. We just have a job to do.
That's easier to do when a company is small. As you grow, it's hard to keep "layers" from creeping in. Yet you clearly try to keep it like a "family."
We have 700 employees and do try to keep it like a family. Just a really big family. (Laughs.)
And we try to show we care about people as people. We have an in-house gym. We pay for personal training. We have indoor aand outdoor basketball courts. Massage chairs. Pool table, ping pong table, shuffleboard...
We pay for a different restaurant to come in every day. For for $8 or $10 you can get a meal from the "restaurant du jour."
We sponsor CarShield Field, the home of the River City Rascals minor league team, and give the suite away to employees and local businesses. We have a company picnic with lots of prizes for kids, petting zoos, face painting... we have holiday parties...
Ultimately we feel that the better we do as a company, the more we should give back to our employees. It only makes sense.
But not at the expense of fair pay. Some companies offer lots of perks but then provide below-average wages and benefits. We pay well, and we allow people to work overtime if they want...
I've always supported the premise of "work more, make more."
(Laughs.) But you can also build your career. We have a trainer from the John Maxwell organization come every week to tutor our managers, tutor individuals, tutor groups... that extra training is great for our company, obviously, but also great for our people.
And we have two full-time trainers. We would always rather have too much training capacity than not enough.
And we do our own internal quality control. We have specific people that listen to calls all day long to make sure our reps are claims advocates. We're the customer's advocate; we're always on their side.
Which makes our jobs more rewarding: It's a lot more fulfilling to help someone than to turn them away.
What's the biggest challenge for you as a business?
Probably being in an industry that is not well known. Everyone knows you can get coverage from your dealership... but that usually only lasts for one or two years.
We specialize in cars that are up to 10 years old with anywhere from 5,000 to 150,000 miles. And we actually go up to 300,000 miles. If a car is under 100,000 miles, we can basically provide new car coverage. After that, coverage steps down a bit, but even over 120,000 miles you can still get powertrain coverage along with other select components, and over 200,000 miles we can still provide powertrain coverage.
That's why we do so many sports sponsorships, why we're sponsoring your buddy Ross Chastain for the remainder of the NASCAR Truck Series races this year, why we do so much TV and radio advertising... building awareness is huge for us.
The key is to get people to call us while their cars are still running well. Like many things, after you have a problem... it's too late.
Serving that many customers, and doing that much advertising, means you have plenty of data on hand. How do you sift through all that data to make smart decisions?
We're constantly in testing mode. No matter how good you are today... that doesn't mean you will be good tomorrow.
We've created a number of tech positions to help us go through our data, to learn from wins and losses. And to help us find ways to reach potential customers -- not just where they "are," but at the right time.
But all that data can be boiled down to a few key indicators. Like retention rate: Making our customers happy is always at the core of what we do.
And so is making our employees happy. While it sounds like a cliche, it's also true: If your employees aren't happy and engaged, how do you expect your customers to be happy?
Building a great business starts with building a great team: Building a team that enjoys the work they do... and the place they do that work.