An ALLPRO® Publication VOL. 23, ISSUE 7 JANUARY / FEBRUARY 2014

By: Kelley Anderson

Creating S.M.A.R.T. GoalsIt’s the beginning of another new year and anotherfresh start. By now most of us have had time toreflect on the previous year and, if nothing else,take a mental inventory of our successes andfailures. We invariably approach each new yearwith every intention of building on the previousyear’s successes and minimizing those problemareas. That axiom is true whether you’re a singlestore operator or a multi-store chain. Building onyour success and reaching new goals dependslargely on something as simple as how well youcommunicate with your employees. Are yousharing those learned lessons with youremployees? Have they been given clear directionand do they know what is expected of them?

Like any other business, your employees representboth your company’s biggest expense, and yourmost valuable asset. Ultimately, your company’sproductivity and profitability depends on youremployees performing to their full potential.Studies show a dramatic increase in both employeeand business performance when an organizationeffectively sets and closely links employee goals tothe company’s overall business strategy. However,according to Robert Kaplan and David P. Norton ofthe Harvard School Press, "a mere 7% ofemployees today fully understand their company'sbusiness strategies and what's expected of them inorder to help achieve company goals”.

Effectively setting and closely aligning employeeand business goals is critically important in anybusiness. Your employees must clearly understandhow their individual work serves both the short-and long-term goals of your business. To be mosteffective, goals should pass the S.M.A.R.T. test andbe specific, measurable, attainable, relevant andtimely. Following the S.M.A.R.T. guidelines providesclarity to your employees who will eventually beevaluated against these goals. Utilizing theS.M.A.R.T. method has proven to be very effectivein motivating employees to perform at peak levels.

To qualify as S.M.A.R.T. a goal must be:

SPECIFIC- Specific goals let people know exactlywhat's expected of them leaving no room formisinterpretation. Specific goals should be ableto answer the following: What needs to beaccomplished? Who is responsible? When must this be completed? Why is this important to the company?

MEASURABLE- When setting goals, you mustalso set specific criteria for measuring theprogress and achievement of those goals. Thismotivates your employees to plan, aim for targetdates, and reach objectives.

ATTAINABLE - Setting unattainable goals servesto demotivate, rather than motivate, youremployees. By setting ambitious, yet practical,goals you will inspire your employees to fullyleverage their abilities and all availableopportunities in order to achieve them.

RELEVANT - Employees must be able to see howa specific goal is relevant to them and the workthey perform in your company. Additionally, bykeeping goals relevant, you will help employeesbetter understand their connection to yourcompany's objectives and the importance of theirindividual goals.

TIMELY - To be most effective, goals must have aclearly defined time-frame including a target ordeadline date. This provides a sense of urgencyand serves to motivate individuals to beginworking on their goals immediately.

When your employees see how they can make adirect contribution to your company's success,they begin to focus on working more efficiently.So as you start to set those business goals for2014 keep these ideas in mind, and rememberthat with the start of 2014 come endlesspossibilities. The ALLPRO team wishes you all aprosperous and happy new year!

components you may have to deal with. Here aresome basics:

• An assessment is charged to the manufacturerfor qualified recyclable products shipped into a PaintCare covered state. This assessment flows through to the retailer, sometimes through several steps of distribution.

• The retailer then adds the charge into the purchase price at the time of purchase. You may be required by law to show the recovery fee assessment as a separate line item on yoursales receipts, or this may be optional.

This is an area where it makes good sense tofollow your competition as it can eliminateconfusion to the consumer. However you decide,stick with it and remain consistent. For the firstyear or so we had to remind our contractors andvolume purchasers to add the recovery fee to theircosts. Most of us have lost a job over a smallermargin than the 75 cent per gallon recovery fee. Ifone day you quote prices to a contractor excludingthe fee, and then add it the next, you could createan unwanted service issue.

Assessment Charges:Be aware you will have to make some adjustmentsto your POS system to accommodate theassessment charges. The good news is theproviders of this type of software are wellprepared with solutions developed for the stateswhich have been implementing the program for afew years now. Even though the framework forthe solution exists you are still going to have somework ahead. Within your inventory you will haveproducts which qualify for the recycling program,and those that don’t. In general, you only want torecover the fee for an item if you are charged oneby the vendor you purchased it from. Forexample, two-component products are notconsidered recyclable and therefore are notcharged an assessment upon purchase from themanufacturer. You aren’t going to charge for a feeyou didn’t pay (are you?), so you need a methodof turning off the assessment on this specificproduct, or class of product. This all depends onhow your point of sale system is set up, but Iwould recommend doing some of the work now toavoid future implementation difficulties.

Collection Sites:So, now you are all set up to collect fees to drivethe PaintCare program within your state. Where isthe opportunity to gain an advantage on yourcompetition? While every outlet that sells paint inyour state will be required to collect the fee, only asmall percentage will qualify and be chosen ascollection sites. Not all of your competitors, even

How to Benefit from PaintCareStewardship Programs

By Craig Bond

Out here in Oregon we talk slow, wear socks andsandals (together), and care deeply for theenvironment. I don’t know if it is really a culturaldifference, or if it’s just because we have someenvironment left to take care of. Many folks backeast consider our entire state to be one largeNational Forest, so it was no surprise when in 2009Oregon enacted legislation which established astatewide paint stewardship pilot program.Perhaps the only real surprise is California wasn’tfirst, but they weren’t far behind as their programstarted in 2012. Connecticut came on board thisyear, and Rhode Island will start a recyclingprogram in 2014. Laws are in the books to createprograms in Vermont, Minnesota and Maineby 2015.

Many industry experts and organizations predictthese post-consumer paint management programswill be nationwide by 2020. As is the case withany change, those who are prepared may have anadvantage. It is my hope that this article may helpyou decide what roles you can play in paintrecycling, and perhaps gain a competitiveadvantage. I am not going to spend a great dealof time describing the PaintCare stewardshipprogram in detail, as more information andspecifics can be found at www.paintcare.org. Myfocus will be on how the program has impactedmy business and the community I serve.

About PaintCare Stewardship Programs:The PaintCare stewardship program is a non-profitprogram established to manage the reuse,recycling and proper disposal of unusedarchitectural paint. To participate in thesestewardship programs there are two basiccategories of actions you will have to consider.First, is what you will be obligated to do by law asa retailer of architectural coatings and the secondis an opportunity you can choose on a voluntarybasis. Since the laws may vary by state I can only speak generally about which

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if they wanted, could be collection sites. If you arewilling, and chosen, you could have access toprofessional contractors and consumers whowould not otherwise cross your threshold.Additionally, many consumers are put off bypaying a fee to a retail er who is not providing theadditional service of being a collection site. Don’tsign up immediately; this decision is going torequire significant thought.

Things to Consider:You need to have space to store the dump bins(provided by PaintCare) which hold the collectedpaint. While these bins are only the size of astandard pallet, we have 5-6 of them in rotationand they can eat up space quickly. Recycling paintis messybusiness, and asa collection siteyou should beprepared for thepossibility ofleaking cans.You must bewilling to trainyour staffbeyond eventhe programrequirements.They will needto know how tohandle acustomer who is a little upsetthat you can’ttake theirmayonnaise jarfull of whatlooks like motor oil as part of a paint recyclingprogram. And on that note, be prepared for thosecustomers who will just dump non-qualifyingmaterial in your parking lot. If you haven’t lostheart yet, inform your customers of your reasonsfor deciding to be a collection site in the first place.Sure you want to be recognized as anenvironmentally conscious business whichcontinually looks for ways to serve the community, but you also want to sellmore paint.

Be Prepared:Devise a plan and train your people on how tomarket and sell to those who are dropping offpaint. This is the only way to make it worthwhile.Develop a short form to use during collectionwhich gathers the basic name, address, phone oremail address along with the brand and quantity ofpaint dropped off. Leave room on the form to

write down any non-qualifying products thecustomer may have had in their vehicle along withthe license plate number. This information can bevery useful if illegal dumping becomes a problemfor you. We have handed out coupons whichthanked the potential customer for recycling theirpaint and reducing a possible hazard to thecommunity. If you do nothing else, have your staffthank them and ask them to consider you for theirnext painting project.

About Belonging to the PaintCareStewardship Program:My strongest endorsement to participate is theanswer to the question I am asked over and overwhen fellow retailers find out Tommy’s is a

collection site.The question is,“Would you makethe same decisionknowing thenwhat you knownow?” Myanswer dependson the day. If youhappen to catchme on a Mondaymorning just afterI discover a boxof miscellaneouscontainers ofunknown liquidsin our backparking lot I mightrashly answer“no”. The other99 times out of

100 I am more likelyto have just received a compliment from a regularcustomer who appreciates the extra service, or Iperhaps had a first time visitor exclaim howbeautiful our store is, and the answer would be“yes, definitely yes”. Don’t let this article precludeyou from asking me about the PaintCare recyclingprogram should you meet me at a future ALLPROmeeting. I would be happy to share more of myexperiences with the program. I’ll be the one bythe pool showing off my Oregon tan, wearingsandals…with socks.

Craig Bond is the owner of Tommy’s Paint Pot in Eugene, Oregon.

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PaintCare Collection Site at Tommy’s Paint Pot

Keeping Pace in a Recovering Economyby Kelley Anderson

As Henry Ford once said, “Coming together is abeginning; keeping together is progress; workingtogether is success.” ALLPRO has been in businessfor 53 years and began with only a handful of paintretailers. Today, our membership consists of 284companies. It’s safe to say the ALLPRO membershiphas witnessed both progress and success. Althoughthe past few years have brought a strugglingeconomy and low profit margins, market researchindicates a successful turnaround in the paint andcoatings industry - one that is estimated to continueinto 2014.

Bloomberg BusinessWeek reports that U.S.stock marketperformance, resurgenthousing markets,improved laborconditions and FederalReserve reports ofmoderate economicexpansion are positiveinfluencers of the U.S.’srecovery in 2013.According to 55 percentof CFO’s, the U.S.economy is now poisedto expand in themonths ahead.

Even more good news,American CoatingsAssociation has published a “U.S. Paint & CoatingsIndustry Market Analysis for 2010-2015” whichprofiles the coatings industry’s 21 market sectorsover the past two years, offering analysis andproviding projections for sector performance forthose five years. The study found that as the U.S.continues to emerge from the effects of the 2007-2009 recession (when both manufactured goodsinput and construction spending declined sharply)the paint and coatings market is expected torespond to improvements in both manufacturingand construction with significant increases in bothvolume and value. Both increased domestic demandand favorable export opportunities will fuel thedemand for increased US paint and coatingsprotection, the report says.

More projections include Freedonia’s estimation thatworld paint and coatings demand will witness ayearly growth of more than 5% by the year 2015.Market expansion will be fuelled by increasedactivity in the global building construction sector,with residential construction in particular witnessing

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strong recovery in the U.S. Robert W. Baird & Co.housing update reports that as negative equitycontinues to recede we should witness additionalspending on home-improvement projects. Theupdate also indicates that new housing inventoryhas entered the market as existing single-familyhome inventory and new home inventory increasedmore than 4%. These indicators demonstrate thatthe turnaround we are witnessing in the paint andcoatings industry is sure to continue.

While these figures sound promising, first handtestimonial from fellow ALLPRO members says it all.A number of member companies have witnessedremarkable success in their business from 2012 to

2013, and a few haveoffered to share theirsuccess in order todemonstrate howencouraging the year ahead appearsfor our industry andmembership inparticular.

Clement Ebbo ofClement’s Paint inAustin, TX is a newermember of ALLPRO,having joined in2011. He owns twostores and reportsthat both retail andcommercial saleswere way up in 2013.He claims “Business

has never been better,we are opening a thirdlocation soon and arewithin a couple of days

of beating last year’s sales” (quoted in September).He states that with the turnaround in the housingmarket and the increasing number of remodelsoccurring, “paint has been selling like crazy”.ALLPRO has contributed much to his success,Clement claims, as the vendor products are verypopular. In particular, Petoskey Plastics, TNT Caulk,Trimaco masking paper and ALLPRIME productshave been doing very well in his stores.

Anne Dages of Dages Paint in Louisville, KYreports that her business has seen an increase inproperty maintenance accounts in the past year.These accounts help sustain the business during theslow times of the year and are very lowmaintenance. Anne also reports that she has grownher business in the last year through diversificationand now offers wood finishes, lacquers and stainsto woodworkers and carpenters. On the retail side,

Map of ALLPRO Membership

her company has joined a bi-local initiative, an activelocal business alliance named “Keep LouisvilleWeird”. The area where Dages Paint is located doesnot have a lot of franchises and is more populatedwith local businesses. She has been excited to seethe resurgence of young people in their twentieswho are supporting local businesses in the area.Dages Paint is prospering and happy to see theemergence of a young energetic group who seemmore than willing to support their local businesses.

John McKenna of The Paint Shoppes in EastProvidence, RI stated, “We have seen considerablegrowth this past year in three areas: retail trade,painter trade and property management. 2013proved to be the best year we have seen across theboard since the previous economic downturn”.About 2014 John states, “Based on this year'sincrease in both gross profit and sales, I amoptimistic that this trend will continue throughout 2014”.

Victor Krause of Monarch Paint in Beltsville, MDstated, “Our decorating department has shown realgrowth this year with window treatments and in-home services leading their way up 21 percent. Theaddition of new outside sales personnel in 2012 hasfinally shown results and sales are up over 90% overthe first year. Government sales while slow and atlow margins, took a major jump. We are alwayslooking for add-on sales and in 2014 it looks likecarpet [may be successful].”

The ALLPRO membership has already conquered thedifficult part. In the spirit of Henry Ford, we havecome together, we have kept together and we areworking together as a group. We love to hear whenour members are successful and we hope this is thecase for each and every one of you. As we continueto keep pace in a recovering economy, let’s beencouraged that the year 2014 will bring even moreprofit and success.

Advertising in 2014by Scott Morath

Over the past several years our advertising efforts have been to build ALLPRO brand awareness. You may recall in 2011 we ran ads that featured a cross section of our members with a message that promoted our network of member retailers. In 2012 we carried that message forward and highlighted several of the ALLPRO product categories. Last year we added a contractor testimonial to reinforce the overall message.

We will continue promoting the brand in the comingyear by bringing awareness to those products thatare new to the ALLPRO family of products. Productssuch as the Titanium brush, Masterknit HD and

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Master Select roller covers, Pro Stretch andQuick2Coat caulks, ALLPRO Blue tape with Pro-Linetechnology, and more. Each ad will be designed toeducate the consumer on how that respectiveproduct will essentially make the paint contractorbetter at what they do. We’ll lead off January byintroducing the new Titanium brush and Pro-Stretchcaulk in The Paint Contractor and American PaintingContractor magazines. Each month that followswe’ll introduce a different ALLPRO brand productthat (ideally) fits with the theme of that month’sissue. As always the call to action will be to visit theALLPRO store locator to find the nearest retailer.

For members who like to “piggy back” on these adsby offering monthly product promotions we willpublish advance notice of the products to beadvertised via the website control panel and bulletinboard. So keep an eye out for the latest andgreatest products and be sure to take advantage ofthis opportunity to promote and sell yourALLPRO brand.

Color ClubBy Brian Eisbrenner

In 1989 Sherwin Williams had an advertising budgetof $4 Million. In 2012 they spent $247 Million onadvertising and the best they could come up withwas a promotion that offered 40% off paints &stains. The future is looking very bright for thecreative independent paint dealer. Marketing yourbusiness is only as complicated as you want tomake it. The number one reason why a retailcustomer buys paint is to change colors. So keepit simple and track results.

In December of 2012I was frustrated withmy advertisingresults from theprevious year. I hadspent a lot of moneyadvertising for ameager 2% increasein total sales. Theads worked as wellas anyone’s, and thecoupons wecollected provedthat. I couldn’t helpasking what I wasdoing wrong.

I began to look at theroot cause of theproblem. I have alimited budget to getcustomers in mydoor and myadvertising lackedfrequency. Those twothings don’t workwell to attract acustomer that is inneed of my productevery 3-5 years. Ineeded to get peopleto remember mystores first everytime they neededpaint.

In February of 2013 I began our Color Clubprogram. Members of my Color Club get one freepint sized color sample per month, for life All thatis required to sign up for the club is a name,address, phone and email. On the first day ofevery month I email them a coupon for a free pintand the offer expires the last day of that month.Customers love it so much they buy on average 2samples with everyone one I give away.

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Here are the results I have seen with the Color Club:

Color Club Regular Retail

Average Transaction $118.50 $74.47

GM/Dollars/Transaction $51.66 $34.26

New Color Club Members 3993 (2/13-10/31)

I have given out 1,507 total samples and sold$21,913.43 worth of merchandise on those sametransactions. My staff does an excellent job ofsigning up every retail customer that walks in the

door. Not everyonetakes a free samplebut they love theidea and do comeback to make apurchase.

I have had 277customers whotook samples butmade no purchase.My staff follows upwith everyone thatdoes not purchasewithin 2 months. Ihave found 90% ofthem have hired acontractor to do thepainting. The other10% I lost to priceand the hours weare open. Thisfollow-up gives meactionable data tomakeimprovementsgoing forward.

My traffic countsare up 4.4% and Ihave seen a salesincrease of 15.5%in the last 3months. I havefound the Color

Club to be very successful and I hope this idea hasinspired some creative thinking within the ALLPROmembership. Perhaps you can build on this ideafor your business.

Brian Eisbrenner is the owner of Shelby Paint andDecorating and currently has three stores located inShelby Township, Rochester Hills and GrossePointe, Michigan.

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A: A hotel reservation must be made for eachattendee requiring his/her own room.

Vendor Q: When do the booth assignmentscome out?

A: After we have received all the vendorregistrations we will release the exhibit boothlayout and provide information on how tocontact USExpo to arrange your freighttransport and set up. The assignment list will beprovided to USExpo.

Q: When will I get my name badge?

Vendor A: Your name badge and informationfolder will be placed on your assigned boothtable. You may pick up your package duringbooth set up on Wednesday, March 19th, 2014.

Member A: The ALLPRO staff will man aregistration desk where you can pick up yourname badges on Wednesday, March 19th.

Q: What is the registration fee for?

A: The registration fee is used to offset the foodand beverage cost of the show.

Q: Who has to pay the registration fee?

A: Any attendee over the age of 18.

Q: If I sign up for the golf tournament, whenwill I know what team I’m assigned to?

A: Golf pairings will be provided inside yourfolder, which you will receive on-site.

For any other show related questions pleasecontact the ALLPRO office at 813-628-4800 ore-mail Kelley Anderson or Scott Morath atapc@allprocorp.com. We look forward toseeing you all in Phoenix!

ALLPRO 2014 Spring Show & Sales MeetingJW Marriott Desert Ridge

Phoenix, AZ, Mar 19 – 22, 2014

ALLPRO 2014 Fall Stockholder’s MeetingThe Westin Michigan AvenueChicago, IL, Oct 23 – 25, 2014

ALLPRO 2015 Spring Show & Sales MeetingRosen Shingle Creek

Orlando, FL, Mar 18 – 22, 2015

ALLPRO 2016 Spring Show & Sales MeetingJW Marriott Desert Springs Resort & Spa

Palm Desert, CA, Mar 16 - 20, 2016

ALLPRO 2017 Spring Show & Sales MeetingThe Westin Diplomat

Hollywood, FL, Mar 8-12, 2017

ALLPRO 2018 Spring Show & Sales MeetingWalt Disney World Dolphin

Lake Buena Vista, FL, Mar 7-11, 2018

IMPORTANT DATES TO REMEMBER …

As everyone is no doubt aware by now 2014 springshow prep is in full swing. We wanted to addresssome frequently asked questions that come upduring this time. Hopefully this information will comein handy when registering for the spring show eventin Phoenix, AZ taking place March 19th-22nd, 2014.

Q: When will I be able to register for the springshow?

A: Event and registration information has alreadybeen populated on the ALLPRO website. Anannouncement was made on December 16th, 2013.

Q: How do I access meeting information andreservation forms?

A: Log into the ALLPRO website atwww.allprocorp.com. On the main menu select thetab labeled “Meeting Info”. You will see a list offuture events with the 2014 Spring Show listed atthe very top. Click the “Details” button located nextto the Spring Show listing. You will be directed to apage entailing all pertinent information to the show.This page will contain a button link to the agenda,which will consist of a complete schedule of events.At the very bottom of the page are two buttons:“Hotel Reservation” and “Show Registration”. Thesebuttons direct you to two separate forms whichmust be filled out by each attending company.

Vendors: If you are not planning on staying on-sitethere is no need to fill out a hotel reservation form,but a registration form is necessary for you toattend.

Q: What if I am bringing more than one person?How many room reservations should I make?

SPRING SHOW FAQ’s

News and ViewsConstructing a New MarketAccording to The Paint Retailer Construction spending in the US hasincreased for five consecutive months, with most gains coming fromresidential construction projects, according to the US CensusBureau’s most recent monthly survey released Oct 22. Residentialconstruction spending rates have leaped up 28.2% from one yearago. The survey also said that total estimated spending onconstruction projects in the US during August was 7.1% higher thanduring the same period in 2012. The new estimated annual rate ofconstruction spending is $915.1 billion. While spending on privateconstruction is on the upswing, public construction rates are stillheaded downward. The rate for nonresidential private constructionheld steady, and total public construction spending was $274.5billion for August down 1.8 % from August 2012. This data comesfrom “The Value of Construction Put in Place Survey”, the monthlysurvey from the US Census Bureau that estimates the total dollarvalue of construction work done in the nation.

Reported 2013 Business TrendsEach month, Northcoast Research surveys a large sample of paintretailers throughout the U.S. to get a sense for current businesstrends. Of the three primary architectural coatings channels (paintstores, home centers and retail distributors) the survey primarilyreflects the distributor channel which tends to see volume growthless than the industry. Therefore, the results of this particular surveyserve as a directional indicator more so than absolute industryvolumes. The survey reports an increase of 1.3% volume ofArchitectural Coatings Sales in September 2013 vs. 2012. Accordingto industry participants, average sales volumes in September rose1.3% year-over-year and slightly contracted from the 2.5% level inAugust. Survey respondents tended to cater more towards the do-it-yourself painter (DIY) and given existing home sales, which tendsto correlate higher with DIY sales than new construction, has grown12% this year. Results are expected to continue to trend positively.Overall, 62% of respondents witnessed an increase in volumesversus only 23% that saw volumes decline, which averaged out to1.3% volume growth and a net increase of 39%.

Social Media Marketing Getting EasierFacebook is making the lives of social media managers easier withtwo updates to its Page Composer announced November 20, 2013.Previously, it took 12 steps to schedule posts. Facebook has nowreduced that number of steps to four, making it easier to schedulecontent without a third-party app like HootSuite. This update mayincentivize page managers to post regularly. Last month, Facebooksaid its average referral traffic to media sites had increased 170%this year. The social network also reported that greater postingfrequency leads to higher referral traffic.

Painting CancerJim Olson, a pediatric oncologist at Seattle Children’s Hospital believes his research team has discovereda way to help surgeons operate on and remove cancerous tumors. His discovery is called tumor paint, andit is used to paint cancerous tumors. If the paint works, it would be a huge advantage to oncologicalsurgeons. While they currently use MRI scans to see tumors, the scans aren’t able to show the tumor’sedges. Olson’s team developed a molecule that is injected into the bloodstream, travels around the body,finds the cancer cells and inserts a little molecular flashlight, making the cancer cells glow so the surgeoncan see them while operating. Who knew there were so many uses for paint?

Editor/ProductionKelley Anderson

ProofersJulia ThomasPat Brulfer

Susan Nichols

Contributing WritersScott Morath, Kelley Anderson - ALLPRO

Brian Eisbrenner - Shelby Paint & Decorating

Craig Bond - Tommy’s Paint Pot

ALLPRO® PresidentMichael Gleason

Exec. Vice PresidentJoe Poliseo

SUGGESTIONS WELCOMEYour suggestions, ideas, articles and

comments are encouraged.

The Scouting Report is an important communications media for ALLPRO®.

Mail all correspondence to:The Scouting Reportc /o ALLPRO® Corporation

4946 Joanne Kearney Blvd.

Tampa, FL 33619 • (813) 628-4800

Website: www.allprocorp.com

The Scouting Report is a bimonthly publicationof the ALLPRO® Corporation.

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