Louis Guzzetti, Chairman and CEO of Spinnaker Coating

Leadership and Strategy: Spinnaker Coating Sticks With Customer Service

Oct. 17, 2012
Focus on service and niche offerings helps label material manufacturer compete with larger companies.

More than a decade ago, Spinnaker Coating tried to play with the big boys and lost. The problem dates way back to 1994 when the label material manufacturer's former owners decided to move from a niche market to supplying large label converting companies.

Fast forward to 2012, and it's a different story for the Troy, Ohio-based company. Current Chairman and CEO Louis Guzzetti led the company through Chapter 11 bankruptcy restructuring in 2001 and the last recession with steady revenue gains.

See Also: Lean Manufacturing Leadership Best Practices

His remedy: a renewed focus on customer service and employee satisfaction. Since 2008 the company's revenues have grown to a projected $100 million this year from $73 million. Spinnaker developed capabilities that allowed it to improve its customer service, including the implementation of a sophisticated CRM system that captures detailed customer data. Guzzetti also brought sales representatives back from the field to the office so they would be readily available to more clients.

"You needed to have the salesmen available anytime the customer called," Guzzetti says. "If they had 125 accounts, how many could they see in a week? Seven or eight traveling on three days?"

The process may have seemed counterintuitive, says Guzzetti, but by having sales representatives 100% telephone based, it makes them more available to customer needs. In addition, the company came up with a way to tailor rolls of adhesive paper for smaller-volume items. The firm further improved its service by more closely monitoring customer satisfaction through surveys, Guzzetti says.

Employee engagement is expected to increase as well since Spinnaker moved to an Employee Stock Ownership Program, or ESOP. After a group of investors sold their stake in the company, Guzzetti decided an ESOP would preserve the value created from their investment without bringing in outsiders who weren't familiar with the company's culture.

The ESOP creates some tax advantages for the company while maximizing value for employees who earn money from shares based a percentage of their salary.

"It creates a tax advantage and also incentivizes people to think like owners," Guzzetti says. "We're all employee owners."

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