An Employee Engagement Update

A few years ago, I shared the exceptional results of our first ever Employee Engagement Survey. We recently completed the Survey again and the outcome was even more positive: With 100% participation in the survey, 95% of GWC employees are satisfied with their jobs! And, we received over 20 pages of comments letting us know what we can do to make GWC an even better place to work.

These results are extremely gratifying as they illustrate that GWC employees “get” what it means to work in a high accountability, pay-for-performance company that emphasizes specific values and culture. They also demonstrate that the leadership team at GWC is listening to its employees and making the company ever more attuned to their desires for an amazing workplace.

Best of all, these Employee Engagement scores coincide with another stupendous run of growth in both sales and earnings. In fact, GWC just came off its 24^th consecutive month of record sales and is on track to establish another high water earnings mark in 2016.

I continue to believe that these results are a direct outcome of our efforts to attract and retain the very best team in the industry. And they provide even more fuel for GWC to continue to strive for high Employee Engagement as we move ahead.

 

What Am I Reading?

Early in my career I was introduced to the seminal work by Nagle & Holden entitled “The Strategy and Tactics of Pricing.” It’s a little dry at times but its influence (particularly on me) cannot be overstated. At the time, I was working for a large company filled with smart people who nonetheless thought an appropriate pricing approach was to figure out how much it cost to offer our product, add a standard margin and let it roll. This simplistic “cost-plus” method was ridiculously incorrect and Nagle & Holden gave me the ammunition I needed to push for a wiser strategy that started with our customers, not our costs.

Years later, Hermann Simon has released a worthy companion to the classic I read in my youth. Simon, one of the world’s acknowledged experts in pricing strategy, updates Nagle & Holden by offering up a variety of real-life pricing strategies and outcomes that illustrate his central point: Pricing is about value, the value a customer receives and perceives from your product. By focusing on that value equation, companies can ensure that their products are neither over- or under-priced and can thus maximize their success. Even more importantly, it forces a real discussion within companies about their product offering, how it is different from that of competitors and what customers truly value.

Why GWC Warranty Pays A Higher Minimum Wage

A few weeks ago, Geisinger Health System made headlines by announcing it was raising its internal minimum wage to $10/hour. While I certainly applaud this move, I was shocked to learn that Geisinger (which is by far the most expensive provider of health services in the Wyoming Valley area) had been paying some of its full-time employees as little as the federal minimum wage of $7.25/hour.

Apparently its newsworthy in 2015 when a rich, powerful employer decides its employees should actually be able to cover their rent and food bills.

At GWC, we have long believed that our employees should earn fair pay for a fair day’s work. Accordingly, our minimum wage for an entry level position is currently $11.00/hour and is on the way up. And in our pay-for-performance culture we elevate starting pay very quickly as the person learns the position and begins adding even more value. It’s not uncommon for new team members to be earning $15+/hour within a few years of starting with us. (And we’re not alone: Our sister company, EasyCare, which resides in suburban Atlanta, starts its entry level employees at $14.50/hour as Larry Dorfman and the rest of the leadership there share GWC’s values when it comes to its team.)

No, this is not Socialism, it’s enlightened Capitalism. Fairly paid workers are more engaged, loyal and committed when they don’t have to work two or three jobs just to make ends meet. We don’t believe that our employees are “tools of production” to be obtained at the lowest possible cost. Rather, we know that our talented employees across the organization are the secret sauce that makes us distinctive, allows us to deliver best-in-class customer service and forms the foundation of our exceptional growth.

GWC employees give their all because they know that in our true pay-for-performance culture those efforts will be rewarded. And that’s how it should be in every company, especially in large, wealthy ones like Geisinger. I hope others will follow our lead.

Giveaways And Gimmicks

Personally, I love coupons; after all, they’re free money to be used for things I was going to buy anyway, right? Professionally, however, I’ve never been a fan of coupon programs. Whenever I’ve seen them used in the past, unused vouchers ended up in dealer drawers or submitted long after the program ended and often resulted in customer dissatisfaction.

Last year, after trying a variety of volume bonus programs, I was persuaded to give a coupon program for our dealers a shot. In rolling it out, we allocated vouchers to our Dealer Consultants and let them distribute them to their Elite dealers as they saw fit, with the only goal being to increase overall sales. Some Dealer Consultants used the coupons to reward their most committed Elite dealers while others distributed them to newly minted Elite dealers in an attempt to drive business their way.

Needless to say, the program was an unmitigated failure. After three months, we had a redemption rate of less than 35%. And as we sat around the conference table puzzling over why it didn’t change dealer behavior, Todd Weeks, AVP of our Eastern Region, simply shook his head said something very profound: Dealers don’t partner with GWC for the gimmicks. They work with us because we deliver on our Brand Promise: GWC Warranty helps dealers sell more cars by giving car shoppers the confidence to become car buyers. We do that by providing Service, Products, Training and Technology.

There are plenty of other VSC companies out there that offer inferior service and products at bargain basement prices. Many of these companies also offer lots of freebies, coupons and other gimmicks. But chances are, GWC dealers are smart enough not to be swayed by those things. Instead, they want to do business with GWC because we are, as Seth Godin would say, a company that offers dealers true value and has the guts to state “We aren’t the cheapest but we’re worth it.”

WHAT AM I READING?

Everyone who is middle-aged at some point begins to question the nagging short-term memory lapses that occur with increasing frequency. Some shrug them off while others of us Google “Symptoms of Alzheimer’s vs. normal aging” with regularity in an attempt to ward off our worries. Patricia Marx chose a different path, researching and implementing as many memory improvement schemes and approaches as possible to see if she could change her brain. This book, which chronicles her journey, is intended to be humorous and at times succeeds. I can’t wholeheartedly recommend it since it’s not really a story but more of a compendium of quizzes and anecdotes. But it’s a fast read and if nothing else will cause people to realize they’re in good company in facing up to the mental challenges that come all too quickly with aging.

Post-Meeting High

It’s been three weeks and I’m still buzzing about the amazing National Sales Meeting we had in New York. The energy and enthusiasm among our Dealer Consultants was infectious; the new tools being introduced by our Marketing & IT leaders were innovative; and the presentations, including the two-hour barn-burner by Dave Anderson, were inspirational. What a weekend and what a team!

Many of us took the time in The City to visit the newly-opened Observation Tower in World Trade Center One. Our resident photographer, Robyn Havener, snapped this great picture of the awe-inspiring building:

When I think about how far we’ve come as a company since the lows of the Great Recession in 2009, it’s hard not to see a small-scale parallel between the rebuilding that’s occurred at GWC and the breathtaking WTC that towered over our meeting. Hard work, determination and belief in a better tomorrow helped propel the massive reconstruction effort in NY. And I think those same qualities have been exhibited by many of the people at GWC.

 

 

 

During my opening presentation at the meeting, I noted that we were holding our event at a Marriott hotel, the chain that repeatedly shows up in Fortune’s list of Great Places to Work. I thought you’d appreciate knowing that, as we danced away the night at the end of our awards presentation, I had three Marriott employees all tell me how much they wished they could work for OUR company! That’s a testament to the pride and energy everyone at the meeting exhibited and I couldn’t be more pleased to be part of this team.

Execution & Engagement

An interviewee recently asked me what I’m most proud of about GWC.  I instinctively reached for two charts.


I have always believed that the truth is in the numbers.  Having worked with many people over the years who do everything they can to talk around and even avoid the facts, I’ve taken the opposite approach:  Transparency.  In fact, I like to tell people that I should be judged on more than my effervescent personality ;)   Instead, I believe that any individual or company should be primarily evaluated on the points they put on the scoreboard. 


To that end, the GWC profitability story since the current leadership team took charge at the end of 2009 is pretty spectacular:  In summary, GWC’s profitability grew by 127% between 2009 and 2014.  This is very exciting as it means that the team exceeded its stated goal of doubling profitability every five years.  And its even more impressive considering that Independent dealer vehicle sales, GWC’s industry benchmark, rose by only 19% during the same period.



Achieving those results coincided with an intense effort to define and establish specific cultural values at GWC.  Those values have helped us create a company that demands a lot of its people while rewarding performance.  So, when we had the Society for Human Resources Management (SHRM) conduct our first-ever Employee Engagement Survey at the end of last year, I had some well-founded anxiety.  I wondered if we were succeeding in creating a thriving company that was also a great place to work.

The results of the survey left no doubt:  GWC’s top-line score (88% of GWC employees “Satisfied” with their jobs versus 70% in other companies) was very gratifying.  Taking a deeper dive into the survey, GWC’s results on particular aspects of Job Satisfaction were even more impressive, garnering scores as much as 33% higher than those of average employers. I took particular satisfaction from the many verbatim comments that our employees shared with us.  To wit:

“This place isn’t for everyone (and I think that’s a good thing.)"