Paul Sunwall, Lynchburg Hillcats GM – Part I

Paul Sunwall has worked in baseball for more than three decades, most of that time with the Lynchburg Hillcats. He won his second Carolina League Executive of the Year award in 2009. I talked with him about the challenges of running a minor league baseball team.

 

You’ve been in the business more than three decades. How has the business changed?

 

I think really the core has stayed the same.  Family entertainment has always been first and foremost in the minds of minor league operators. We’re going for the families, and we’re going for the entertainment – the fireworks and other things, other than just a baseball game going on. That’s what makes us tick.

We know we have to have fireworks shows and outside entertainment and all the giveaways in order to get the fringe people out here that aren’t coming out just to watch a baseball game. That really hasn’t changed.

I think technology has helped us over the years, with the Internet and Facebook and Twitter. Our ability to get out instantly, and they’re ability to chime in. That’s been one of the biggest changes over the last several years.

 

How do you use social media?

I’m kind of old school, I guess. Newspaper, radio and a little TV – we used to do some cable. Now, it’s not that we don’t do that  – we still use newspapers, still use radio stations, we still do some TV. But now that everyone’s got a phone in their pocket they can get on line with, along with Twitter, email, Facebook and everything else,  instant messaging and whatever, I’ve surrounded myself with some young people who are good at doing that

 

And I’m happy to be involved with the promotion of us through those means. I don’t really know if we can say it’s increased attendance 10 percent or anything like that. I think the facility and the organization along with everything we do to get people out here.

But you’re using as another way to reach out to people – the same message, just over additional media?

 

Exactly. You make it fun, too. You make it so they can win a prize skybox or they can win some free tickets. It all comes together in a roundabout way to use whatever you can that’s available to get the message out to the people who are going to listen to you.

 

Why do major league teams change their minor league affiliates so frequently?

 

There’s a number of reasons. We’ve had it happen to us several times. It’s not necessarily that the major league teams are unhappy with us as the operators or with the city itself or with the facility – and I’ll give you a couple of for-instances.

 

The Mets were here for 12 years from 1976 to 1988. The major league Mets shared a spring training facility with the Cardinals in St. Petersburg, Fla. Port St. Lucie on the east coast of Florida made the Mets an offer that “Hey, we’ll build you a spring training facility for the Mets to have by themselves. But part of the condition is put a class A team in the Florida State League.” Well, we’re a class A team in the Carolina League. And they pre-warned us, saying, “Hey, we’ve got this offer we can’t refuse.”

 

So in the meantime, the Red Sox became available. The owner of the Winston-Salem team was a Cubs fan. He had the Red Sox, and the Cubs became available. So the Red Sox had no place to go, and we’re kind of raising our hands over here, saying “We’d love to have you.” We had a good seven years with the Red Sox. Now, they had a high A team in our league and also in the Midwest League. So they decided to do away with one of their high A teams. – and Lynchburg was the choice.

 

At the same time in 1994, the Pittsburg Pirates were in Salem, Va., which is in our league. The owner over there was tired of having losing teams and decided that he didn’t want to re-sign with the Pirates.  We’re were without a team, so we said, let’s talk with the Pirates, and they said, “Sure, we’d love to talk to you.” Salem never wins a title with the Pirates but we win after they leave, two years later. So that was kind of fun.”

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Seeking Profits in Every Nook and Cranny

Can a marketing offensive counteract a powerful industry trend? We’re about to find out. Ad Age says the giant book retailer Barnes & Noble plans to double its marketing spending in the coming months. This includes a new ad agency – Mullin, Boston – a new look for its stores and heavy promotion of its e-reader, Nook.

The company’s profits have been slipping, as readers turn away from books and toward e-readers. Barnes & Noble has been trying to catch up with Amazon’s Kindle e-reader, adding the Nook Newstand (digital newspaper and magazine subscriptions) among other features. It’s another example of a retailer heavily invested in a delivery system that suddenly becomes outdated with the advent of new technologies.

At least Barnes & Noble is still earning a profit, even if that profit dropped by about 25% in its latest quarter to $60.6 million, representing a mere 2.6% of sales. As a comparison, look at Blockbuster,  which lost a half a billion dollars in 2009, entered bankruptcy court in 2010 and put itself up for sale in 2011.

Sign of Armageddon: Pepsi Falls to No. 3 Soda

It’s easy to laugh at Pepsi’s embarrassment after the Avis of the soda giants saw its flagship brand slip to No. 3 (read: oblivion), behind not only Coke but Diet Coke.  Beverage Digest says Pepsi brand soda sales fell nearly 5 percent last year.

Pepsi bottlers are furious at CEO Indra Nooya for taking her focus away from the company’s namesake soda in her effort to boost sales of the company’s healthier food and drinks under Tropicana, Gatorade and Quaker Oats, among other brands.

“Is she ashamed of selling carbonated sugar water?” Pat Weinstein, owner of Seattle-based Weinstein Beverage Co., an independent Pepsi bottler, told The Wall Street Journal in an article today. “That’s a question that is raised often by the most concerned of the independent bottlers.”

She hardly repaired the damage by failing to launch the “Summertime is Pepsi Time” recovery campaign until after the start of summer, costing bottlers the first few weeks of critical hot-weather sales.

Hey, even Fortune 500 CEOs make mistakes. But this is really a tale of just how challenging it is to adapt a company to changing conditions. The larger and more successful a company is at doing something, the harder it is to change. Dismiss any move by Nooya at your own risk. She had the vision when she became CEO in 2007 to push the snack food and soft drink company toward a goal of getting half its sales through healthier foods. She also had the gumption, after winning the CEO position, to approach her main rival for the position and say, “Tell me whatever I need to do to keep you.”

PepsiCo is taking its lumps now, and Nooya might get booed off the stage before her strategy succeeds. Or maybe her strategy won’t ever succeed. But give her credit for addressing the deep disconnect between the star products in her company’s arsenal and the growing concerns over unhealthy eating. She could have ridden the sales of Pepsi for years, retired as an admired and respected industry leader, and left the painful strategic correction to her successor. She chose the bolder approach.

Can you think of any leaders in the business world, or the political world, for that matter, faced with similar dilemmas?

Lacrosse and Branding Courage

Fred Moore, founder and CEO of the branding/marketing communications agency Big River, recently wrote a terrific post on lessons from the championship season of the University of Virginia’s men’s lacrosse team. A season after coping with a catastrophe few groups of any kind ever deal with (a player accused of killing a member of the UVA women’s lacrosse team), the team was determined to redefine what their team was all about.

Of course they would, you say. And you’re right. But check out the actions they were willing to take to live up to that commitment. I can only hope I’d have the guts to do the same under remotely similar circumstances. I don’t want to spoil Fred’s story by revealing the details here. I hope you’ll read his piece, and I’d love to hear how you’ve handled difficult decisions like theirs.

Thank you, Rob Quel, principal at Lynchburg’s Bedford Hills Elementary School, for sending this story my way.

 

Web 2.0, Meet S&H Greenstamps

Stu Woo and Geoffrey A. Fowler note in their Wall Street Journal article (subscription only) that smaller businesses didn’t begin to embrace web advertising until the advent of  “daily deal” model. The model is simple: offer on-line coupons – new technology, very traditional marketing idea.

The numbers are striking. Local-media advisory firm BIA/Kelsey estimates in the article that local merchants will spend $3.1 billion on daily deal web marketing in 2014, nearly triple what they’ll spend this year.

The lesson is one I expect we’ll come back to many times: The tools change, but the principles endure (for the most part). New technologies and new media are the tools – sophisticated, effective tools. But they don’t trump basic marketing concepts. You still need to provide your potential customers with a powerful reason for doing business with you. No matter what medium or what device you’re using to connect, 50% off my next purchase will always get my attention.

What are you offering your potential customers in your web communications?

How NFL Owners Swiped fan Support from the Players

How important is it to win the hearts and minds of the public in a labor dispute? The NFL labor dispute could have been an opportunity to find out, if the players had not frittered away their public sympathy card.

In most professional sports labor disputes these days, much of the public has no sympathy for either side in a “millionaires vs. billionaires” dispute. Oddly enough, even that’s a step forward for the players. In the first modern strike that robbed fans of major professional sports games (Major League Baseball, 1972) the fans were mostly angry with the players for walking off the job.

Fans had just as little sympathy for individual players who held out in contract negotiations. Since the advent of free agency in the late 1970s, players and their unions wield a lot more power than their ancestors. And, perhaps by coincidence, the public is at least willing to entertain the idea that maybe the Jets ought to offer cornerback Darrelle Revis more money, or it makes sense for player salaries to grow with their sport.

Which gets us back to the current NFL labor dispute. For once, the players did not have to justify either their demands for higher pay or a threat to strike. This time, the owners are locking out the players. This time, the owners are asking the players to give back a portion of the revenues that players shared under recent collective bargaining agreements.

In the PR world, you rarely get an easier, more powerful key message handed to you than this one. All the players have to say is, “We just want to play. But the owners decided that, even though the NFL has never been more popular or lucrative, they would end our labor agreement early and lock us out.”

DeMaurice Smith, head of the players union, did say some of that when negotiations collapsed and the court battle began.  But that message got diluted by Smith’s homage to sacrifices from former players and the pride the players have going into the battle with the owners.

So what did fans see and hear on March 11, when the talks moved into the courts? Smith talking about pride, contrasted with a half-dozen owners  saying how frustrated they were that the talks would have to pause as the dispute entered the courts. Somehow, the owners snatched heroic role of the side that’s desperate to save football.

The lesson: Smith made a common communications mistake. He used one message for audiences with very different interests. His “pride” message was an effective rallying crying for the players – his “internal audience” in PR-speak. But NFL fans don’t want to hear about how proud you are to go into battle. They want you at the negotiating table.

America’s Oldest Pawn Shop

L. Oppleman calls itself “America’s Oldest Pawn Shop,” a claim almost impossible to prove. The story goes back to 2001, according to Darrell Laurant of The News & Advance. Harold Dambrot of the Four Aces Pawnshop in New York searched for the nation’s oldest pawn shop before the 2001 national convention of National Pawnbrokers Association and concluded that L. Oppleman was the clear choice.

David Somers, who has been running L. Oppleman for more than two decades, prefers to say it’s the oldest pawn shop operating under the same name. Pawn shops change hands a lot, (although, as we’ll see in a moment, L. Oppleman is a notable exception), and often the name changes with ownership. So perhaps there’s a pawn shop out there that’s older but has changed names over the years.

Somers took over Oppleman from his father, Aaron Somers, who began working in the pawn shop in the 1930’s and kept the name after he acquired it after Ike Oppleman died. Ike had taken over the operation from his father, Jacob, who founded the company and named it after his wife and co-owner, Lena.

If you’re scoring at home, that’s four bosses in 120 years, or as many as General Motors has had since 2000.

David sat down with me to talk about how L. Oppleman has handled the challenge of a tough economy, the advent of eBay, and perpetual space shortages to house a whole lot of Lynchburg’s stuff.

Q: Who are your customers?

It’s interesting. I have a very high-end customer that comes in here. It took a long time to build that up, in jewelry. That’s really a trust relationship. You need a lot of knowledge about the product. We have a high-end clientele, and we get a lot of blue collar. Both of them are looking for value –one because it’s basically where they can afford to buy things, the other they’re just looking for better value on higher end

We’re still missing that middle segment, which is your broadest area of people. I haven’t heard it in a long time, but I’ve had a middle class person come in here and go, ‘Oh my god, I’m in a pawn shop,” and walk out the door.

We’re breaking through that barrier. And shows like [History Channel’s] Pawn Stars are helping to show another image of the pawn shop.

Q: Are you a counter-cyclical business? Do you do well when everyone else is struggling?

Probably one of my favorite quotes is this is the type of business that does really good in good economic times but better in bad economic times. It’s kind of recession-proof.

Our percentage of forfeitures is not increasing. Right now, we have a pick-up rate of about 65 percent [65 percent of the people who pawn an item return to pick it up and pay off the loan], which is pretty typical.

Q: Does your pick-up vary?

In good times, our pick up rate is 80-85%

The pawn shop is probably a better economic indicator than anything. I can tell you before you hear it on the news what’s coming. If I’m having a 50% pick-up, I can almost guarantee you it’s a depression.

For more on Oppleman, including how the pawn shop has turned potential competition from the internet into an ally, read part II of this interview.