Ken Daly: sales route to the top.

Daly, a first dan judo blackbelt, stepped up to the top job in May after following an increasingly popular route with those seeking to get on in business – consistent achievement in a sales management role. In 2000, he became sales director, four years later sales and marketing director and then, last year, deputy MD.

Market stall

JML is the company that sells all those useful items you never quite realised you needed until you saw them advertised – slimming body suits, ironing board covers, storage bags, snore relief spray, titanium hair straighteners – you know the kind of thing. It’s an electronic age equivalent of a novelty market stall and, this year, the business will comfortably exceed £50m in revenue.

Hot cakes

Retailers are extremely keen to get their hands on JML products, according to Daly. ‘Our stuff sells like hot cakes,’ he enthuses.

‘The levels of sales and profit they can achieve from a JML promotion is generally way higher than just about anything else they can have in store in non-food. Time and time again major customers have told us that our operation is just about the most profitable use of floor space for them.

‘When we trial these products, we’re only interested in the top 20% sellers. Even if every product we trialled sold like hot cakes, we’d still only select the top 20%. We’re looking for products with mass appeal, which sell in huge volumes.’

Ken Daly: products with mass appeal.

Margins are lower than average but this is more than made up for in high sales. But do such ‘impulse-buy’, incremental purchases always do well? Surely, JML is vulnerable to recession?

Through good times and bad times

‘Traditionally we’ve done very well. Some companies can do well in recession – like confectionary in cinemas apparently – because people haven’t got a lot of money to spend on the high-ticket items. But, if there’s a product in store for £4.99 that’s going to make their life easier ironing, say, that’s the kind of thing people are happy to buy.

‘During recessionary times retailers are very keen to find new ways of generating revenue,’ he adds. That’s when the company adds most new customers in terms of retail outlets.

Dryer Balls

In the current boom times JML is doing just as well. It promotes its products via mainstream television advertising (remember ‘Dryer Balls’ which reduce drying time in tumble driers and soften clothes without the need for fabric softener?), shopping channels – channels 631 and 632 on Sky are recent additions – and in store using seductive point-of-sale stations with LCD TV screens.

‘The majority of our screens are digital widescreen LCD panels with a built-in digital player with content held on a flash memory card,’ Daly explains. ‘We change the product on offer in stores every six weeks.’

Merchandisers restock the shelves and POS units and change the promotional video programmes at the same time. It seems this ‘old-skool’ technique is still the best way to ensure full shelves with the correct promotional videos being played.

Technology

JML is currently exploring networking technology and different ways of uploading promotional content remotely – either over the internet or via the GPRS phone network – but such technology is costly and doesn’t yet demonstrate a suitable ROI (return on investment).

Ken Daly: electronics degree.

Reordering is predominantly done via EDI (electronic data interchange) and new stock is sent either to customers’ central distribution warehouse or directly to the store concerned. ‘We go in with our people once a week or once a fortnight,’ says Daly. ‘We want the stores to put the stock out. Most stores are pretty good at putting it out themselves.

‘Obviously, if there’s stock in the warehouse that needs to be put out our people will do it when they go in. In some stores we are a victim of our own success and they do tend to rely on the JML person,’ he adds.

Sales team structure

With the public buying JML’s products either through retail outlets or direct in response to shopping channel programming, where does the selling come in? ‘Our retail sales team sells to retailers. We’ve also got the international sales team – which is smaller – who sell to companies worldwide. They either already sell to retailers or home shopping.’

JML’s retail sales team is split into two functions. ‘One is national account management and the other is the field sales team. The national account managers are selling into head office buyers at the major retailers or managing incumbent accounts and selling in new products.’

Five national account managers report to national sales manager Tim Waite. ‘He and myself spearhead the new business development as well.’

The other side of the operation is the 100-strong field sales team, which is directly employed by the company. ‘Their primary role is merchandising product in stores. The do also have a selling role.’ Looking after independent stores (rather than just implementing what head office dictates) means selling to the store owner or buyer. Even in multiples, however, there’s a role to play in optimising position in store.

‘Although they’re not listing new products, they’re certainly selling JML and trying to get the store manager to support JML. That’s quite a tough job because a lot of their work is manual work which is relatively easy to do but then we need quite high-calibre people who are very persuasive and have got the brains, culture and infectious personality.’

Growth path

Overall, is it an easy sell? The key, says Daly, is getting a trial in a store.

Ken Daly: ramping up TV advertising.

Down the years, revenue growth has been impressive. From 1994 when Daly joined JML, the company grew at an average of 50% year on year. Some years were better than others with turnover doubling between 2000 and 2001. ‘We grew very, very fast over that period.’

The company hit a plateau in 2004 and 2005 with the rise of internet shopping, while also suffering from the 2005 downturn. It had already picked all the low-hanging fruit and needed to look for new ways to attract business.

‘We were left with the really difficult nuts to crack, which were the major grocers. But in 2006 we really got our act together again.’

Daly and colleagues did two things. The company landed some major new customers. ‘We really started to make headway with the grocery chains, particularly ASDA and Tesco.

TV advertising

‘Also we managed to counteract the downturn in retail trading by spending a lot more money on TV advertising.’ (This runs against the perceived wisdom of cutting all budgets to the bone in the face of recession but clearly makes sense. Why do most companies insist on reducing their marketing spend when they’re desperate to sell more? – Ed.)

‘The way we managed to do this was to get the retailers to work on lower margins.’ Now that wasn’t an easy sell,’ Daly confides. ‘Everybody wanted more margin, not less.’

Trials successfully proved that the lower margins were more than compensated for in terms of volumes sold. (Pile ’em high and flog ’em cheap – Ed.) It was a win-win situation with both parties happy and the retailers helping to fund the ad campaigns.

‘We took all the risk. We paid for the TV advertising. We ordered the stock up front and, in some cases, we offered profit guarantees.’

Overall in 2006 the company was up 23%. ‘The vast majority of that was in the second half of the year when we began ramping up our TV advertising.’ This year has seen JML increasing advertising still further with a media spend of £12m. Daly claims to be well ahead already of what he needs to hit this year’s £50 million sales target.

Company motivation

So how does all this success filter down to the rest of the company? Sales achievement is used to motivate the whole company, Daly explains.

‘Everybody in the company earns a sales-related bonus – even if you’re working in the accounts department! That really helps to get the whole company sales-focused. It’s paid monthly, based on the sales for the preceding month.’

Additionally, although the company is privately owned, there’s also a share scheme, so staff members are paid dividends.

A day in the life

What is a typical Day for the new MD? With a busy schedule and two young children, Daly’s day starts at 6am. Driving to work at 7am, he is in the office by 7.30am with a quiet hour-and-a-half to read emails, memos and have some breakfast at his desk. Then it’s into a busy schedule of meetings, although he’s out of the office two days a week seeing clients and retailers.

Early days

It all seems a long way away from the days when he emerged fresh onto the jobs market with an electronic engineering degree from Exeter University. Admittedly, Daly had taken a year out after school funded by selling marble and granite, so a sales career was always on the cards. He also spent his university years working part time in retail at the Gap and running various small enterprises of his own to help make ends meet.

‘As well as being interested in electronics I’ve always been interested in selling. I like selling and I like talking to people.’

After working full time at the Gap’s Oxford Street store and the usual post-university travelling, Daly looked for a temporary sales job to give himself some thinking time prior to embarking on a long-term career in electronics.

‘I answered an ad for the job with John Mills. I went to the interview which was at John’s house.’

Operating from the basement, Mills had three staff. ‘I thought what on earth was this! John is an incredibly personality; incredibly talented and he sold the company to me. I just thought: “I want to work for this guy.”’

Sink or swim

The role turned out to be sink or swim. ‘Literally I got given a company car, was given a list of the stores in which we were operating and just sort of sent packing!

‘I drove up to Grimsby on a Sunday night so I could hit the store first thing on the Monday morning and did an all week trip around every store we were in across the country, staying in Travel Lodges on my own, which I really enjoyed. I spent the first year schlepping around the stores myself.’

From there it was onwards and upwards as Daly’s role grew along with the company.

Personality is key

So what makes a good salesperson for the JML business?

Personality is a key when recruiting, Daly stresses. ‘You can train people in skills but personality is something you can’t instil.’ He looks for people who are dynamic with an infectious enthusiasm to match the company culture. ‘They need to be good ambassadors for the company.’

Additionally, experience is also useful but Daly is quick to point out that he’s not looking for old hands. ‘We’re looking for people who haven’t been around the block a million times; let’s be honest!’ JML is looking for flexibility and people without pre-conceived ideas.

‘Also, they totally have to believe in what we call “the JML Way”.’ Daly is quick to stress that this is nothing sinister. ‘It’s hard to put your finger on it but we’re all fighting for the same cause. We genuinely believe that our products are great products that consumers love.

World domination

That said, ‘world domination’ is Daly and the team’s long-term goal. ‘There’s absolutely no doubt that what we do is make loads of money for the retail customers.’

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