Today’s guest is Lennie Melnick, a self-proclaimed serial entrepreneur. His first business was a box business and from there he’s gone on to hosting a sports talk radio show on Serius Radio. Lennie is going to help us find some new ways to sell that we might not have thought of before. He is going to tell us about some sales methods that the big don’t use, but little businesses can.
Here are some of the things we’ll be talking about:
- How owning a racing horse can bring in $1,500,000 in annual sales.
- Where having the customer always being right is an important thing.
- Having your employees think of you as family is a good thing.
- Why it’s important for you to focus on your customers problems.
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.
Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, how are you today? This is Josh Patrick. You’re at The Sustainable Business.
Today, we’re going to be speaking with Lenny Melnick. Lenny is a really interesting guy. He spent a whole bunch of years in the box business. Now, that’s not a very interesting or fancy business but it’s one of those blue-collar businesses that we happen to love here at the Sustainable Business. And then he went into broadcasting at 50. He has his sports talk show on Sirius Radio. And he has been a real pioneer in the world of fantasy sports which I know basically nothing about except that it exists. My bet is he’ll tell us something about it. So, you know, I can yammer on a lot about stuff but I bet I bet you want to listen to Lenny, so let’s bring him in.
Hey, Lenny. How are you today?
Lenny: I’m terrific, Josh. It’s so nice to be here. Thanks for having me on. But you say that the box business is very glamorous because I used to go around and show my kids dumpsters and I’d say, “Do you know what’s inside those dumpsters?” They’d say, “Yeah, garbage.” I say, “That’s what your daddy does. He makes boxes that fill dumpsters ultimately.
And also, so my older kid thought I was a professional boxer. He said that when he was in his school one day, “My dad’s a boxer.” And all of a sudden, I became very popular. They thought I was a professional fighter.
Josh: Well, that’s kind of a cool thing. By the way, Lenny, I love blue-collar businesses. I spent my first 20 years in a blue-collar business. I have a tremendous amount of respect for folks that run them. I think that people who build blue-collar businesses are generally undervalued by the strength that they bring to our economy so I’m glad you’re from that world because this is what this podcast is all about. It’s how to take your blue-collar business, make it successful and then make it sustainable. So, with that in mind, why don’t you tell me a little bit of the story. I love the story about how you became a radio host and owned a racehorse and how that ended up helping your box business. Can you tell us about that a bit?
Lenny: Well, it’s very interesting because you talk about—yes, blue collar – the corrugate box business. There were plenty of customers around. Everybody has to put their product in a box to ship it out so the amount of customers that were existing, it was all out there. The question was, “How do you get these customers?” And of course, you can go to school, any college in the country. You go to Harvard. You go to whatever and they’ll teach you what Procter & Gamble does. But in that blue collar, small business, self-owned business, you’re not Procter & Gamble. You’ve got to be creative. And the best way to be creative is to do something that you’re comfortable with that you feel that if your personality comes out, you can rope the customers, lasso them in and bring them in. That’s exactly what I did.
For years, I walked around with a three-piece suit, an attaché case, knocking on doors. It got me a little bit but I’ll tell you something, it was crazy. I thought I was stuck. I didn’t think I could go to the next level, until one day I met a fellow who was bored.
He was a very wealthy guy. He had a major company with shampoos and cosmetics and all the creams and all that stuff. He used about—oh, I’d say about a million and half dollars’ worth of corrugated boxes and I was getting one order. And I realized he had a love for horseracing so I suggested, “Let’s buy a racehorse.” “Oh, what a great idea.” And we wound up buying a racehorse. He owned 50%, I owned 50%. And I did it not so that, you know, I could take a picture in the winner’s circle. I did it so I could have a relationship with this fellow. And under the heading of “If he’s going to buy boxes from anybody, who’s he going to buy from, if I’m his business partner?” And we had some fun with it. We go to the racetrack once a week. We’d buy hats and shirts. Our wives get to know each other. And you know something, Josh? I realized then that’s the way to do it. And I was successful. And yes, my business prospered big time just by that racehorse.
Josh: So did you pick up the million and half dollars of the boxes that he was buying a year from your company?
Lenny: Pretty much. I got the major load. Quite frankly, he gave me all I could handle. So I couldn’t even handle the whole thing. Don’t forget, I was a small company. The only way I could get that amount of business under my roof was to expand. It happened very quickly. All of a sudden, he wanted me to have all his business and I wasn’t ready for it. Over the years, it did transform that I had everything. I had 100% of his business.
And the other thing about the horse racing thing is that once the word got around to my existing customers who I shared the business with other people, that, “Oh, Lenny’s got a race horse.” I’d get phone calls on the day the horse was racing and they would say, “Lenny, remember last week, I gave the order to the other guy? I’m going to give the order to you this week, okay, because you’re such a nice guy. And by the way, how do we look tonight?” That was human nature, right? How do we look tonight? I don’t know how we look tonight. I’m supposed to know if my horse is going to win. And there were some times I did know but the point was that. And then they either come down to the race track.
And once you meet people out of their element, out of their office, after 5 o’clock, somehow most relationships take a different turn and they become much more relaxed. And as a result, not only did I pick up the business from my partner in the racing business but I picked up business from so many other guys that were giving me just little bits and pieces but I got to know them at a different level and we shared. And when the horses won—I mean, because I eventually bought another horse. When the horses won, it was great. Not because of the horse income but because of what it did to my business.
Josh: So, this reminds me of one of my favorite sales sayings which is, “Customers justify with facts and they buy in emotion.”
Lenny: Well, yeah. You know what, there are so many things. I really took the position that—it’s the old adage, “The customer is always right.” I know it’s a dollars and cents thing. And quite frankly, I was not really your typical businessman and I just took the position that if all my customers, at the end of the day, have a smile on their face eventually I will make money. I did things that I know I lost money on but that wasn’t the issue. It wasn’t for the moment. It was for the overall picture and as it turned out right.
And I portrayed myself as a family guy which I absolutely am. And I tried to make my business that way. So, I kind of told all the people that worked for me, who were able to answer a phone, “Try to identify the voices.” The last thing I want to hear was “who’s calling?” Now, of course, many times there was no choice. But for the most part, you pick up a phone. “Oh hi, hi Charlie, how are you?” alright? Now, that, in itself, just doing that little thing, it was tremendous in making the people feel like they had a home they can call, they could ask me for anything and they did. And that’s what it was like for a good part of 35 years.
Josh: So, do you still have the business, or did you sell it, or close it? What did you do with it?
Lenny: No. I’ll tell you something. I wound up after almost 40 years of selling the company to a company that—
I mean, people were amazed. They would say, “Lenny—
I still stayed about the same size. I never expanded the size of—well, I expanded a little bit. I bought a big building and all the same but I was a sample room compared to my competition.
I used to put stuff out in the parking lot. I couldn’t take it in every night so I covered it with tarp, you know, in case it rained. The truth is that most of it was garbage. But anybody who passed by my factory would say, “Lenny, I got no business, you know, Lenny is always so busy. Look. Look at all the stuff he’s got out of his parking lot.” The truth is it was garbage, on skids, all scrap. It looked like it was something covered with tarp and people took the position that “Lenny is so busy. Look at what this guy is doing. How is he doing it?” I wound up intriguing a company that was looking for a niche market because mine was a niche market – the service aspect of the business, and he wound up buying my business but three years later he went out.
Josh: So, talk to me a little about your niche business because I’m a real–I actually call myself a niche-a-holic.
Josh: So, what was your niche and what made you successful because of it?
Lenny: Well, you know, rather than sell price – everybody’s selling price. My price is cheaper than yours, give me your price. I found out that the point of purchase in the display industry, you go into any drugstore, department store you’ll see sunglasses displays on the floor. You’ll see the cosmetic displays on the counter with the tester bottles and the mirrors. All that stuff is made in quantities of a thousand, two thousand, three thousand and they’re all shipped in boxes and they can’t break. And that was my niche.
Someone would say, “I got a sunglass display I’ve got to ship out. I’ve got a thousand of those. I have to ship them next week. You have to design a box so that (1) it fits my budget and (2) it doesn’t break because I can’t ship out 300 or 400 of these items and have them break at $300 to $400. So, that was niche where price was not the object. The object was to have the wherewithal to design the box properly so that it was still cost effective and it protected the product.
And here was the other thing. The other thing was many times the box couldn’t be developed until the first product came off the production line. And of course, once they saw it coming off the production line, one or two days later, they had to start shipping. So, I would have a sample maker positioned, ready to make a sample right there in the guy’s office, in front of him – whoever was in charge. He made it there because if you take the sample back and bring it back the next day, anybody could do that. It’s just a certain psychological obligation to give Lenny the order when he’s got a guy here with his tools and everything he needs and makes the sample.
And many times, I get an order for a thousand and the guy would need 50 tomorrow. So you know what I did? I made 50 and I didn’t charge him anymore. I get an order for a thousand – sometimes it’d come out to be $4,000, $5,000 or $6,000 but I ship him 50 so he would get going. And not only did I do that, but in many times I didn’t even deliver it in a truck. I pretended that it was such–oh, I’m going so crazy, I put in a pickup truck because it’s all an illusion, you know? It’s just for the show part. I’d show up in a pick-up truck. “Lenny, thank you so much, man.” I could’ve put in a regular truck but you know what? There’s no glamour in that. You know, that’s why I put it in a pickup truck. Made the grandstand play and that’s how you lock in customers. That’s how you build a business when you’re a small company.
Josh: So, it sounds to me like you were really focusing way more on solving your customers’ problems. And because you were a niche, you really understood what their problems were and you could solve it effectively than trying to say, “Oh, I’m just going to be all things to all people and have cheap prices.”
Lenny: Exactly. Because not only did it help my customers, but here’s the other thing that it did. I made a big business with a lot of big companies. I did things that the other guys couldn’t do and it wasn’t because they were lazy, just because of the size of their companies didn’t allow that kind of flexibility where I could walk out to my factory and say “stop this and we’re doing this.”
Remember the old Ed Sullivan show where he used to have a guy come out on the show and he would spin plates on a stick and he would have like 10 plates and then all of a sudden, as he got to the middle, the first plate started to do the slow wobble and he had to go back and start spinning it again? I used to get orders for 1000, 1500, 2000 but I never finished them because everybody needed it tomorrow. So I would give this guy a 100. I would give that guy – and then I’d go back and I’d start it again the next day. I was always spinning the plates. But the name of the game, Josh, was I kept my customers happy and at the end of the day, they all said “Thanks, Lenny.” And once you have that kind of security with people you feel very comfortable about your business.
Josh: That’ cool.
So, just to give the listeners a little bit of a sense what you’re talking about, before you bought the racehorses, what was your gross sales?
Lenny: It was about $500,000 and I was the only salesman. I’m somewhere out there and doing the whole thing. It was a small company. It had about 10,000 square feet in the factory. I was knocking on doors, making phone calls, doing the whole thing. And then all of a sudden I didn’t need a salesman – word around, I got the horse, I got the radio show going on. Then I joined all these fantasy leagues and I got to know people that way. And that’s how I did my sales. And let’s face it, I don’t care what business you’re in, you’re only as good as your sales. You could have the most modern factory, the beautiful equipment but you’ve got to get sales. And that’s what it did for me.
And along with the sales, once I had the people who gave me an opportunity – well, of course, I had my moments but I tried never to let them down. And here’s the other thing, when I had my moments of failure, I didn’t shy away from it. As a matter of fact, I tried to appeal to their humanity, knowing I was trying. So I had a list. I sent out a list to many of my customers and on this list, I had 20 reasons why I was late on delivery. One was an earthquake in China, another – just stupid reasons. And so, they would call and say, “Am I getting my boxes today?” I would say, “14.” “Oh, there’s an earthquake in China. Okay. I get them tomorrow, right?” But it was all about—really, I mean, what am I going to do, right?
Lenny: You’ve got to be so creative so—
And people—you know what? We can’t be afraid to be honest. And people understood what that meant. And there was one time where a guy was just insistent that “I don’t care what you do. I’ve got to get it here today.” and I kind of knew that he was just, you know, really busting my chops. This is the greatest thing I ever did. I wound up sending a truck and I said “It’s on the way” and had the truck get to the place. They opened up the door and the truck is empty – absolutely empty. So my driver who was in on this whole charade said, “Oh, Lenny put your stuff on the tail and I went to the wrong stop, they took it off and they forgot to put it back on when I left.” Well, the customer called me up and said, “Lenny, are you sitting down?” He wasn’t angry. He was sympathetic with the driver. “Don’t fire your driver. He’s a nice guy.” So I sent the guy an empty truck and he came up with this wonderful story that the driver was in on because I had no choice, I couldn’t make it so I had to come up with something.
The whole point is that you’ve got to be creative. And there’s no college in town that’s going to tell you that that’s what Procter & Gamble does. You’ve got to be creative. You just got to do it, man. And so, you’ve got to find a way to put a smile in your customer’s face.
Josh: Well, a lot of times, what you learn if you’re a student in an MBA program is not especially practical with the blue collar businesses that you and I both love.
Lenny: You know, it’s not taught that way. This is all self-learned. I didn’t plan any of this stuff. You know, this was never in my plan – buy a racehorse, get a radio show, join a fantasy league and send somebody a list with excuses and an empty truck. No, that was not in my plan. My plan, when I started, was a three-piece suit and an attaché case.
And you know something? You know what changed my whole style?
Lenny: George Carlin.
Josh: Oh really? Good person to change it.
Lenny: George Carlin, the wonderful comedian. I had been going out. I wear the three-piece suit. “My name is Mr. Melnick” and the whole deal. And that was a bunch of baloney but that was what I was supposed to do, in my opinion. I went for four years of college. I studied the whole deal. I know what to do LIFO, FIFO and all that stuff. But I go to a George Carlin concert and somehow he stuck with me. And the next morning, I went out with my three-piece suit and attaché case. A guy comes out and I said, “Could you believe I’m another corrugated box salesman?” Now, that’s not your traditional businessman opening. And when he asked me if my prices were good. I said, “What? Am I supposed to tell you that they’re not?” So, I really had some George Carlin “No, they’re not very good but, you know, who cares, right?”
Lenny: It’s more money for me. And I turned into a bit of George Carlin by saying, “Do you believe I’m another corrugated box salesman?” And can I tell you something? People loved it.
Josh: Oh sure. I mean, it sounds like you’re a bit of a character and people like characters, so there you are.
Hey, I’ve got one more thing to ask you and then were going to be out of time because we’re running up on it right now. And that is, let’s talk just for a minute or two about treating your employees with respect. Why is that so important?
Lenny: Well, I had about 15 to 20 people in the factory who worked with the bandanas and the whole deal. Sometimes, it was hot. Many times, when I found out – word got out that one of these guys, their kid had a soccer game. I’d walk out, put my bandana on me and I’d say, “Get the heck out of here. You belong at your kid’s soccer game. I’ll do your job.”
I had girls in the office who – the only argument I ever had with them was that I noticed that they were taking work home on the weekends and they didn’t want to tell me. Now, that’s the argument, alright? And that’s because I tried to treat everybody – “listen, we’re all doing our thing. Nobody’s job is easy. And we treat people with respect.” They respect you and your goal is to respect your customers. That’s the most important thing in your business. If you treat your people with respect who deal with the customers, they will respect the customers as well and that’s half the battle. You can be the boss and you could be saying anything you want but when the people don’t do the right thing – people who work for you, slack off and they fail to follow your role, it could be bad so it’s very important that you all work together. I know it sounds kind of Polyanna but “it worked for me.”
Josh: So you found that the more respect you showed your employees, the more care they gave to your company?
Lenny: Absolutely. And I had people who knew that they could’ve gotten jobs elsewhere but if anybody had something in the family, I would say, “Go home. Take the day off.” I mean, look, it’s my little business. There’s nothing I couldn’t do. And I if I had to fill in for you for that one day, well what does it cost me? It cost me nothing but you come back the next day and you work even harder than you did before. Anybody who thinks they can do it on their own, is just fooling themselves because ultimately it’s going to get you.
Josh: Well, Lenny, unfortunately, we are out of time and we didn’t even get to your fantasy baseball or fantasy football, or how you got into the sports broadcasting or how you were a pioneer of fantasy sports. We might have to have you come back and talk about some of that stuff in the future. Would you be willing to do so?
Lenny: Absolutely. You just say the word. I’d be happy to come back.
Josh: Okay, cool. So that’s great.
I’m going to bet that there are some listeners out there that are going to want to find a conversation with you interesting and might want to contact you, how would they go about doing that?
Lenny: Well, first of all, my website, lennymelnickfantasysports.com. That’s my love affair. That’s the new business that I’m building and it’s fascinating, from a lot of aspects of the game. I have 350 people who have introduced themselves with paragraphs and I find that to be astonishing. So, lennymelnickfantasysports.com. At Twitter, @lennymelnick. And firstname.lastname@example.org – that’s my email address. I’d be happy to talk to anybody.
Lenny, thanks so much for your time. I really appreciate it today.
And for those of you who are still listening which I hope is all of you, I have an offer for you. We have put together a one-hour audio CD course. It’s a physical audio CD. You can put in your car and listen to it while you’re driving around. The course is how to take your business, make it successful and then make it personally and economically sustainable where you’ll learn The Five Keys to a Sustainable Business.
If you want to get this, it’s really pretty easy. All you’ve got to do is text SUSTAINABLE to 44222, that’s SUSTAINABLE to 44222. You’ll get a link and you’ll be able to go in and give us your address and we’ll mail the CD to you and you get to listen to it. And if you like it, maybe you can tell me what you think.
So at any rate, thanks so much for being with us today. You’re at the Sustainable Business and I hope to see you back here really soon.
This is Josh Patrick.
Have a great day.
Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802‑846‑1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an e-mail at email@example.com.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.