Episode 234: No Charge for Shipping? The Probitas Story with Matt Fischer and Krisi Lund

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

What if you had a colleague in your company who suggested that from now on you wouldn't charge for shipping? And now what if that colleague was the boss? Because that's exactly what happened when Matt Fisher suggested in a board meeting with his team that they implement a no charge for shipping policy. And after the idea was met with stunned silence, and finally agreement, they did. But that's not the only story we have to share with you today. Our guests are Matt Fisher, CEO and one of the founders and owners of Probitas Promotions, and Kristi Lund, account manager and client expert extraordinaire. Probitas is a North Dakota-based distributor. Part of their story is the merging and acquisition of Trojan Promotions in 2019. Trojan Promotions was a distributorship owned by Jessica and Troy Nelson, were tragically killed in an accident. Today, Chrissy and Matt share the story of how they integrated two different teams while honoring the work of Jessica and Troy. We talk today about the impact of the no shipping policy, how they brought together two companies at a very difficult time, how they sandbox ideas, including the two podcasts they host, the effectiveness of cold calling, plus Matt's insight on how technology is the present and future differentiator for distributors. Hi friends, I'm Bobby LeHew, Chief Content Officer at Commonsku. One quick note, you might have heard that we launched pre-registration for our incredibly popular event, SKUCon, held in Las Vegas on January 8th. And we've been working furiously behind the scenes to put together an amazing lineup of talent. But if you're new to the business or new to SKUCon, SKUCon is the industry's one-day conference for innovators, explorers, and dreamers in the promotional products industry. It's a live, all-day, meant to kick off your year right, and it always sells out quickly. So I encourage you to hop on over to skewcon.com to preregister so that when tickets become available, you'll know immediately.

I hope to see you there.

Today's episode is brought to you by CommonsQ, the work-from-anywhere platform that powers your connected workflow, enabling you to process more orders and dramatically grow your sales. To learn more, visit commonsq.com. Now here's my conversation with Matt Fisher and Chrissy Lott.

Matt, when, when was Perpetus born?

We started in September of 2015 as a swag business, and we— the reason we started our kind of our go-to-market is we wanted to enter the swag world with the speed of business in the 21st century. So using technology and efficiency and going at it at that route, not just trying to be another swag distributor out of the 20,000 that were already there.

So you knew right away that tech was going to be a huge differentiator for you?

Yeah, I mean, I could— you could see it in the way that, I mean, we're talking 2015, it's Amazon's full-on and Netflix and everybody, and our industry just wasn't there even in 2015. So we felt like it was a good opportunity to enter at that point and use tech. And this is truly like, I'm not You haven't paid me and all this stuff, but the first call that I made in 2015 when we started was to Catherine at CommonSkew to get us set up. And the second call we made was to the place that we were going to be physically doing business. So it was more important to have that technology set. And, you know, our leading technology software from the beginning has been CommonSkew.

So I love that part of the story that you're like, you knew you had to get that component before anything else. That's a great part of your story. It also set you up for these virtual teams now. Who would imagine, right? Did you know in 2015 that you would have employees in the Philippines and Seattle and everywhere else? Was that part of the strategy?

Yeah. Um, that's kind of funny. Our, our lawyer, I— they asked, where's your company headquarters? And, um, the founder and I, he's in Minot, North Dakota, which is in northwest North Dakota. I'm in northeast North Dakota. And I said, where's the company headquarters and we sat on the cloud. And still the government doesn't see the cloud as a real place. You know, Uncle Gary, he's my business partner, Uncle Gary, he's my uncle as well. He thinks it's somewhere in Texas, which he might be right. But so we were going to be cloud-based from when we entered the industry and just knew that that freedom and flexibility was going to be important.

One thing I noticed is you have a very unique structure, including a board or senior exec team that sort of helps with decisions and strategy. Can you give us a glimpse of your structure?

Yeah, and, and I'll kind of take you in the evolution of it. Um, the structure was the co-founder and I, um, it was just us, the two owners, and I think that's pretty typical in a distributorship in our industry. It's the owners of the company making the decisions, and we did that for a couple years, and eventually we brought on another partner who was in the company, Savannah Simmers. So she then entered into the decision-making process, so then it was really 3 owners making decisions for the whole company. And it was working and fine. And our company was growing from, you know, 2 people to 4 people to 5 people and just slowly growing. And then we got to the point where that kind of exponential part of the growth started. And we needed more people to make decisions and we needed to spread that out. So about 4 years ago, we added Alyssa Bernhardt, who was in our sales department to be our sales director. And then kept growing. And at that time, it was no more owners making decisions. It was 4 leaders in the company. I was CEO, Gary was CFO, Savannah was COO, and Alyssa was sales director. So we had our roles, we had our accountability and authority, and we've just kept that model going through and have added now 2 more, Katie Barta and, um, Kari Strandberg, and Each of those have different roles. Kari's now our director of operations and— or Katie is our director of operations and Kari is our director of websites. And the philosophy behind that is if it were still to be the same way it was where it was just Gary and I, two owners making decisions, we have two people who can do a lot of things, but they can do a lot of things very poorly.

Right.

Or we can have the idea of having, having more people who do fewer things and do those things very well. And that's just the model. And I see that leadership team growing. I mean, eventually you get to a point where you're going to have to probably silo that and have different, you know, structures underneath each— not underneath each of those, but I could see that leadership team growing all the way to, you know, 8 to 10.

Yeah. You and your team have seen some amazing growth. Last year was a record year. What were some of the factors that led to 2021's growth?

I would say it was the silver lining of, of COVID Um, and I, along with where we were located in North Dakota, we were put in a position like every other small business where we had to decide, are you going to cut people and, you know, let them go on unemployment, hopefully they come back and then rebuild, or are you going to keep everybody on, weather the storm and try to get through it and then be ready to hit the ground running. And we decided to take the latter because we love the team that we had. We knew that if we were to let them go, when the economy got back, they wouldn't be there because they were so good and they'd be taken elsewhere. So with that strategy and with COVID happening, obviously, like everybody else in our industry, we stopped these bulk shipments to one headquarters where somebody at that headquarters wasn't going to disperse them. We had to figure out how to kit, we had to figure out how to drop ship, we had to figure out how to warehouse. And we took that time in the 2 to 3 months that were slow to be able to build that. So we rented a warehouse, we started making processes for kitting, started making marketing campaigns for kitting and going to market with that. And with those additions, when the economy opened up— and that's why I say North Dakota, because our economy opened up again, I would say in the Beginning of June of 2020. So not to get political here, but we took the 2 weeks to flatten the curve and we actually got it done in like 8 weeks where some other communities it took 6 months, a year, some are still trying to get out of that. And we were able to see that growth because we were open and that allowed us to get some national accounts because these people that maybe had a place in Arizona that they were going to as their local distributor wasn't open anymore. You know, they were either out of business or not able to take care of their needs.

Right.

So with those additions and that kind of national exposure, we were able to grow pretty, pretty rapidly.

Yeah. Year to date, you're on pace to exceed your previous year's growth. Is there anything different in your growth this year that wasn't apparent in last year's?

Yeah. And I'm going to do kind of a shout out to the Premier Group. It's an industry group that we're part of. It's a really unique one where it's suppliers and distributors who have equal footing. A lot of times in these partnering groups, it's kind of the, the distributors have the say and the suppliers kind of just, you know, give what the distributors want. We have a board that has equal representation, so it's truly a cool partnership. Anyways, we had kind of a mid-year meeting last year, and I, I brought the case to the group as best practices. I said, we've had this huge growth, what do we do? How do we keep it going? And The recommendation that came out of it was to completely flip how we did business. And that was a tough thing to hear as a CEO and then go and persuade the team that we're going to do something completely different because we've been already going well.

What do you mean completely flip? What was the difference?

So we, we had the traditional model of having salespeople, operations people, and just kind of siloing our departments. But the salesperson was the person that worked with somebody from when they were prospecting to presentations, estimates, to order entry. They did everything. They kind of had their hands on all that. And then finally, after that, it flowed to the operations team. We decided to take away the idea of having salespeople and have more of a team selling aspect. So we have account executives that have account managers with them that work on multiple clients. There's not— Matt doesn't work with works with one client, Chrissy works with another client. We all work as a team with all clients. That allows us to be more flexible. And then we took away the concept of siloed departments and we said that everybody in our company has a say in what sales is because as a sales organization, it's not just making the sale and getting the product there. It's, you know, tracking, art and all that. And all the different people in the company touch that interact with clients. So we got rid of commissions, we got rid of salespeople, and we decided to pay everybody a salary for what they did. And then the entire company gets a bonus every quarter based on one number, and that one number is total revenue.

This is a massive shift for your company. It was a big— I was about to ask if that compensation changed as well. And what you're, you're sort of the tip of the spear. I mean, the B2B buyer now is working with multiple people within an organization. In the old days, it was the salesperson, and the salesperson was the silo that held all the information. And now our clients are working with, you know, 3, 4, or 5 team members, um, and it's completely changed. And so it's refreshing to hear that you also had to align compensation. Couldn't have been easy, but what a great decision.

Yeah, and it was it was tough, but it made sense. And that's kind of— if it feels right in your gut, that's kind of my go-to.

Yeah, I love that. Also aligns the team when you get to where you're all moving toward a quarterly bonus or a year-end bonus or whatever the structure is. Um, something I learned that I was absolutely stunned by as a former distributor who did fulfillment and distribution and who spent just in our tiny warehouse around $250,000 to $350,000 a year in freight, not including the drop ship that we sent, you do not charge for shipping. And I heard this and thought, um, that can't be true. Uh, is this for all shipping, whatever comes directly from your warehouse in addition to dropship?

Not exactly, um, but pretty close. It's— most of our orders are what we consider dropship. So, you know, if we order— if a client or something that we get from Hit or PCNA or whatever, we'll, we'll drop ship it right from there. So that one drop ship is free, and it just— it can only go to one location, and it's ground shipping. But like I said, that's 90% of our orders. Yeah, it's truly— yeah, it's truly— we don't— there's no line on that invoice for shipping. If we have to drop ship, they'll get the one for free, and then we'll, we'll bill for all the other stuff.

But yeah, okay, so go ahead.

I will say too, with our— with our— we have— we got about a 200 or so company stores that we do. And we do offer that free shipping for orders of $75 or more as well. So we do kind of pass that savings on there.

How did this idea come about?

Again, it was at a Premier Group meeting. And I will say this about, you know, for those of you out there who are thinking about or been asked to join buying group or a partnering group or whatever you call it. We were asked straight away as a company after a year or so, and I turned it down. And I, I've been thinking, well, I want my autonomy and I want to be me and I don't need any other advice from anybody else. Well, that was just dumb. Um, the biggest thing that I've found in this Premier Group is the collaboration with our competitors, and they're not even competitors, they're, they're really friends. Right, who are going through the same things we are going through, but they're just in different markets. And anyways, I was at another one of these meetings in the fall of 2019, and I won't, won't say the person's name. He knows who he is, just to protect the innocent. Um, but he was talking about shipping, and he said, well, yeah, shipping's a huge revenue generator for us. We make 50% on shipping, right? What? Midwest guy here, and there was a couple other Midwest in there. I'm like, we like freak out if we mark it up 5%, you know? And he's talking about marketing up 50%. So that was just kind of the little itch that got started that, you know, right, snuck into my brain. And from there I was like, all right, let's try to maybe make a little bit. So my big brain went to, well, let's just do what we're doing and we'll go from 5 to 10%. We're going to double our revenue. But that— and then COVID hit, and then we started shipping stuff like I was talking about with the kitting and the warehousing and all that stuff, and found real quickly going from 0 to 60 that we needed a better shipping partner. UPS, our rate that we were getting from there wasn't cutting it. And at that time, a company called All That Ship, and yes, that's the name, and that is one of the reasons that we went with them because it's hilarious, but kind of prospected us and we ended up saying no right away. But then eventually at the end of the year hooked up with them and we found that our rates were truly just phenomenal. And I'm probably getting— giving too much behind baseball, but you know what, I, I truly believe that it is something that our industry should look at and probably find a way to better navigate. But anyways, we— yeah, for, for a year and a half we were working with this company and trying to figure out how do we monetize this, how do we get to the point where we take these great rates give our clients a better rate and then still make a good margin on it. And the back-end accounting on it, if you can imagine, is just a nightmare. You got, yeah, a bill from Hit with your third party with, you know, just a lot of back and forth. Yeah.

And how much gets held— how much gets held up in billing just for shipping.

Exactly. And the time that it takes to chase all that down. And yeah, we finally got to the point where we had a solution, and then kind of threw a monkey wrench in it like I do. Um, and we said, why don't we try something different? Instead of going through all this rigmarole, why don't we just offer free shipping? And everybody looked at me in the room, and Alyssa, who I mentioned, our sales director's eyes got really big because she saw dollar signs. Um, Gary, our CFO's mouth just stayed open, and you— and usually he's the one where the mouth goes right away and then he shoots me down because that's his job as CFO.

Right.

Of course, much money. But, but truly, we, we tried it and it's— we're still doing it today.

I'm assuming when you made this decision, you knew the exact annual cost, or at least close approximate to what you were saying when you said free shipping.

We had an idea on— it fluctuated. That number was hard to find because, yeah,— it passed through cost of goods sold. So it's a tough line, especially when you're getting billed from your suppliers, what that number really is. Yeah, but I can tell you it was— we estimated to be about a 2 to 3% bump on our margin in the negative.

Right.

And did you adjust margins or did you say, no, that's just what we're going to do? Did it depend on the account or how did you handle that?

Yeah, we totally adjusted margins. We adjusted them up, um, because we now had a differentiator that our competition wasn't using. Going to market, our competition, it's, it's price and customer service. That's what they say. We didn't, we didn't lead with price. We left, we led with free shipping. And we, with, you know, with the great pricing we get, um, with the partnerships we have with our suppliers, um, we were able to to get that margin up.

Well, the two clarifiers on that, the two qualifiers on that, I should say, are really helping protect that 2 to 3%. When you say anything you're shipping from your facilities is $75 or more per average order and then ground shipping. So you've got great qualifiers on there. Did you, did you fear, did you guys talk about this possibly commoditizing your offering in any way that it could lead with more dealmaking with clients?

No, because we just looked at it as such an opportunity to, to go to market with this story of free shipping, free shipping. And the cool thing is our society and our culture already expects that, right? We live in an Amazon world and a Target world and a Lowe's world where, yeah, you're not getting free shipping, you're not even going there. So if we can tell that story of free shipping, they're like, Oh, it's, it's almost subconscious just to kind of gravitate towards that because that's the offer that you're getting.

Yeah. How was that received by clients?

Fantastic. They love not seeing that, you know, 1,000 water bottles from ETS, $1,100 shipping line at all.

Did it help add additional clients or increase sales? Was there any markers you saw that you were like, this is— this was a great decision?

What I saw initially is that it increased sales from the current clients that we had. We were getting maybe departments that we weren't getting before. We were getting more orders from clients that we weren't getting before, different parts of budgets that we weren't getting before because they were gravitating towards it. And to be honest, we haven't really gone to market prospecting-wise yet with this. And that's been kind of the 2022, 2023. Yeah, very cool. Plan to go to market in that sense.

And you had already adjusted compensations and commissions. So, and, you know, in my old model, that would have been a challenge because you have salespeople getting, you know, adding freight as part of their compensation in their projects. But this would have eliminated that problem. And smart. Thank you for sharing those details. That's fascinating. Thank you for being willing to share that. Let's talk a little bit about technology. You know, you are very passionate about technology. As you said earlier, you started with that, um, like your first stake in the ground. Why is it so important to you? And I know maybe we're going to obsess about the obvious, but there are listeners that I think still don't make technology the fulcrum by which their business rests, or, you know, the rocket ship on which they should ride. And I have heard two major suppliers in the past two weeks alone say Technology, we talk about it like all the time, but it is going to be the primary cornerstone differentiator foundation, whatever you want to call it, for people going forward. And distributors used to be able to hide their heads about this. I know we sell a technology product. This is not a self-serving comment I'm making. I've just been really shocked at how much everyone is saying. In fact, one, one supplier leader even went as far as to say, if this industry is going to get disrupted, it's going to get disrupted through the technology sector, not through any other relationship. I'll shut up now, Matt.

What—

why is it so important to you?

I think you, you have to look back about, you know, what technology is and how you define it. You can even look back to the printing press. You know, that was technology. And then fast forward to our industry. What was technology in the, you know, 1980s when you could fax an order instead of sending in the mail? How did that increase your production and your efficiency? And fast forward board to email. You're able to email art now instead of having to draw something out and fax and having somebody redraw it. And it's always been there, it's just that adaptation has been so slow, what I've seen in our industry. And it's, it's kind of that holding on to what you've done and not being able to let go and just kind of go with the flow of business. And, um, truly, I, I agree with that supplier's understanding of disruption and that disruption is not going to come from— it's not going to come from getting CommonSkill. You're not going to disrupt the industry if you don't have CommonSkill yet. You're behind. Yeah. Um, the, the future where it's going is machine learning. It's, um, and I don't want to get all Terminator and Matrix or any other dystopian reality movie that's out there, but, um, computers are able now to do things that 10 years ago was science fiction. Yeah. And that's just a reality. And if you're not using that in business, you're behind. And if you're not looking at what that next thing is, so yeah, I think that's where we're going is that machine learning and finding a way to combine the two.

You're a relatively young company still. How have you seen technology influence your growth?

It's crazy that you ask that at this time because we're going through a migration from from Google to Microsoft since there's really like only two platforms on planet Earth that you can use to run your business. We started our company as a Google company and it was because we were able to use the collaboration tools that Google had with Comms Queue, with companies like QuickBooks Online and that sort of thing to collaborate and to be intuitive and work together. And I think that was the— where we were when we started. Almost 7 years ago. Now looking to the reason we shifted from Google to Microsoft is because now we have to have our technologies talking together. Now we have to have our— and I'm not talking about intuitively moving, you know, data. I'm talking about like Commenscu needs to learn what Sendoso is doing in order to create something that's never been created before. And Microsoft has a platform that can do that with Power BI and and some of the different apps that you can create. So that's where I see that change moving to is more creating your own identity as a business through the use of technology. We're still going to need CommScue. We're still going to need Microsoft. We're still going to need all that ship and all these other software platforms that we use. But we're also going to need to create our own things in order to make them specific to our business. Yeah.

So a friend, uh, sent me, um, and that, that friend would be Mark Graham because he likes to send me things that make me nervous. And he sent me this AI, uh, story about a, you know, content creators or writers that AI was using, or that there was AI storytelling and they were taking components and pieces. And he, he was laughing and said, you know, hey man, this is going to replace you. And we, and we got a good kick out of it, but it was actually a fascinating story. I think it was on This American Life or something like that. But where do you see the— is there a conflict or is this still an opportunity? When some folks, when they hear technology and people, and we deal with this when we're talking about efficiency, because when you're selling a platform like CommensQ, your efficiency just leaps ahead light years and you're actually able to do more with less people. But what we always say is use those resources for other strategic, um, you know, other strategic goals. What do you say?

You're still going to need people. And I go back to that, you know, analogy of the fax machine and the email and that progression there. It just made you more efficient and allowed you to go gain more business. And what we're going to need to do is we're going to need to take these new tools that we're creating, we're using, and that the jobs, if you will, that technology is replacing and insert humans into being able to navigate the data, the opportunities that are coming from that at light speed compared to what they were coming at before. So we're going to be able, we're gonna, I feel like what we were in 2015 were really efficient order takers and idea generators. We were really good at that because we had technology. Right now what we're going to need to do is we're going to have to be really efficient procurers, procurement professionals, really. Yeah, be informed and use technology to procure as fast and as effectively as we can because our clients are going to start going online. If you, if you don't have a shiny awesome website that does all of that AI stuff in the background for you, that does presentations, estimates, almost gets a sales order, you could go all the way through and You know, you need that human to be flexible and to be able to make that final decision that's going to click that into an order. That's where I see that combination of the people and the computers.

Chrissy, did you want to add anything to that?

Yeah, I believe that with the technology, clients still want to know that there's a human behind it. Yeah, they want that peace of mind still of I'm gonna see this online, I'm gonna look at this online, everything's computer generated, but I want to know that there's a person behind it making sure it's correct.

Yeah.

And, and that's where I think the human aspect comes in. Um, I've been able to tell clients in the past, don't worry, someone's physically looking at it. It's not just going to flow through a computer and you have to put your faith in that.

Yeah.

You have not one but two podcasts for propetus to talk about a little bit about marketing and how has the podcast led to a better team, a better experience?

I really feel like it's, it's allowed us to be ourselves in an environment that's almost a little scary. So as a teamwork aspect, you can kind of have that camaraderie of we did something a little out of our box together. And then from an outside looking in the box perspective, it allows our clients, our suppliers, our fans to see who we are as people. Because, and this might sound terrible in a promotional industry podcast, but like your viewership, the people that you're looking to get to, who I am one of them, wants to hear about what's going on in our industry. That was a decision we need to make. Our clients, do they really care about that? And the question, the answer is, yeah, probably a little bit. But I think they care more about what does Matt do on a Friday night, or what does Chris think about mittens, or— and these are real conversations that we have, right? It's almost like Seinfeld, where our shows are about nothing. They have a theme, but really it's just us getting together so our clients can get to know who we are and we can, as a team, you know, kind of get to know each other a little bit better as well.

That is a lot of fun. Chrissy, you're laughing through this whole conversation.

I am, because I like to show up to the podcast recordings completely unprepared, and that terrifies Matt.

That would terrify me too.

I, I show up and we sit down at the table and I look at him, I'm like, what are we talking about today? And yeah, sometimes the conversations get completely out of hand, but we laugh a lot.

Yeah. You know, having done lots of podcast interviews, I can tell you that what it does, that it allows people to think critically. Like, you don't even realize it. It's a, it's a, it's a subconscious experience that when you go through, but you end up clarifying thoughts, you end up just having a great time. And so I can see the benefit. You and your team like to experiment with ideas, like what's in the sandbox now that you're playing with?

Um, and you say that and it's like the team kind of freaks out because I truly believe that the job of a CEO, you have two jobs. Job one is to be a visionary and job two is to have a good culture. And the visionary part means that it's my job to throw stuff against the wall and see what sticks. And whenever I say something like I have an idea, everybody kind of cringes a little bit. But the The one thing that I would say right now, it's actually two words, but it's put into one: HubSpot. That's something that we're doing right now. It's like a lot of tech companies, Commonsku, HubSpot, SendOwl, you know, we like to put words together. So we're doing HubSpot. It's an amazing tool. We're trying to learn what the heck it can do for a company like ours in our industry. And like I said before, to moving from Google to Microsoft, that was, that was a major change. And that's something that we talked to our our tech partners about how do we, how do we do this next move where we take our business and make it more efficient by doing it the way we want to do using technology. And they said, you got to move to Microsoft. And that was a tough pill for me to swallow because I'm, you know, we started the company with Google and I'm kind of a Google guy. So yeah, yeah.

Something I've noticed in your language You take partnerships very seriously, and this sounds like a pedantic topic to talk about, but having just talked with Jeremy Lott, Jonathan Isaacson yesterday, as we were talking about how to weather potential recession or economic headwinds and things like that, they both commented what we can all do better is strengthen our partnerships. But this is a very natural part of your language, as you and I were talking off mic. Um, how have you seen, like, the reason I'm asking this too is there's a difference between treating a vendor like a vendor and treating a vendor like a partner. It's a huge differentiation when you can get to the point where you realize that your business is a very interdependent model. Um, how have you seen this shift in your attitude affect your business?

I truly think it's just a part of my character and our character as a company. And the way I look at it is a three-legged stool. And I use this analogy all the time, and it might be a simple answer, but I look at it where you've got in our industry, and you can put this in lots of different relationships, but in order to come to that part where somebody can actually sit on that stool and not be tilted or fall off, you need to have everybody involved doing their part. And in our industry, the three legs are ourselves as distributors, our suppliers, and then the client. They need to hold their weight and have their part. And I truly treat our clients the same way as I treat our team and the same way as I treat our suppliers. And, you know, I even go so far as to— we'll have collaboration meetings where we'll get somebody from the supplier. And I know that happens a little bit in our industry, but I, I kind of run towards that because Suppliers are experts in certain areas. So let's bring the expert in to talk with ourselves and to talk with the client. And a lot of people might look at that and say, well, you know, what if, what if client A goes and meets with supplier B? Aren't they going to go to your competitor? And yeah, at that point I would say, well, then client A isn't a good leg in the stool, right? They're not going to be something that's going to be a long-term furniture for us in our beautiful house.

Yeah, Chrissy, part of the Probitus story is the merging and acquisition of Trojan Promotions in 2019. Trojan Promotions, for those listening who might not be familiar with the story, was a distributorship owned by Jessica and Troy Nelson who were tragically killed in an accident. As you can imagine, losing both leaders and owners of a business suddenly meant the team, those accounts, had So many questions about what to do, a very difficult time for everyone. Probitus acquired Trojan in 2019. As I mentioned, I want to honor Jessica and Troy's work for a moment. Can you give us some insight into Trojan Promotions prior to being acquired by Probitus?

Yeah, Troy started Trojan Promotions basically as a sister company to his father's company. So they did business forms, and Troy saw a market for items other than business forms. And so he kind of branched out as Nelson Specialties, and as they went along, um, they just— Troy had this vision for the company, and so they did break off and become Trojan Promotions, which was, you know, the same thing as Nelson Specialties was, um, but new kind of face to the game, and he saw us moving towards being completely self-sufficient, basically a one-stop shop. He felt like we were moving at a pace that the industry, mainly contact decorators, just could not keep up with. He had such a high standard for quality, and Jess used to say all the time, We may not always be the cheapest, but we will be the best. Yeah. And that was just kind of her mantra. Uh, and so for that reason, we were working towards moving the entire operation under one roof. And that did start with the purchase of two embroidery machines. And the screen printing was actually the next step when the accident happened.

Chrissy, this had to be an excruciating time. You were on the Trojan team and And as we all know, what were you and the team considering as you began to think through the practicality of a future for Trojan and your clients?

Of course, there was this period of disbelief and shock. You know, we were a family.

They—

we worked so closely together. There were so few of us that, you know, when you see somebody every day, they're, they're not just a coworker or a boss. They're your family and they care about you and you care about them. And the biggest question was, you know, how are we going to keep going without this driving force, you know, Troy and Jess?

Yeah.

So I remember the day we got the news. Of course, our first thoughts were actually, how do we get in front of this story? How do we get in front of the news and the media? So we literally all sat down at our desks and started phoning our top clients, calling people at home, because, you know, these people were not just clients, they were close friends to Troy and Jess, you know, Troy's hunting buddies, Jess's cousin, you know, it doesn't matter. But the— these people were very close. And so we're trying to get in front of the story so people don't have to hear it on the news. And we just— we released a statement just to calm everybody's fears. We're still here. Troy and Jess, we were lucky enough that they gave us all of the tools to just kind of keep going and keep moving forward without them. And the support that we received from the community, including competitors like Provitas and our vendors, it was just phenomenal.

Yeah. Christy, had you and the Provitas team worked together or did you know each other? Were you friendly competitors?

So this isn't a very big town. Okay. I knew, I knew of Matt. I knew of Savannah. We, you see each other across the trade show floor at different events. One of their team members actually was a former Trojan employee. So we were, you know, friendly terms. And another employee had actually worked with Troy and Jess at Nelson Specialties. Before the change, but there wasn't any collaboration up until that point. But I will say honestly that ProVitas and Matt and Savannah and Gary and everybody, they were the first ones to reach out to us when the accident happened. They were the first ones to offer their condolences and offer support for anything that we needed.

I am so sorry for your loss, and I'm also So, you know, as someone who has seen many mergers and acquisitions, this had to be one of the most unique times and also very delicate time. But Matt, how did the acquisition begin for you?

Christy's way stronger than I am. After 3 years, I'm finally to the point where I don't like sound like a blubbering idiot. When they— when we heard the news of them passing, it was right before, um, my wife and I go on our— we go on our vacation once a year. And I do say vacation because we go without the kids. If you go somewhere with your kids, it's a trip. Um, just wanted to define that. And so we're going on vacation, was already planned, and we're in Palm Springs. And, um, I got a call from, um, one of the executors of Troy and Jess's estate And I didn't know who it was and they left a message and I called back and I'm like, well, I'm on vacation. And they asked if we'd be interested in taking over and merging and that sort of conversation. So that kind of got the ball rolling. And after talking with them more, it just sounded like it'd be a pretty good fit. But unlike Troy, we didn't have the vision of having everything under one roof. You know, the idea of a screen printing machine possibly and embroidery and production, all that stuff that just wasn't in our cards and we didn't feel ready to do that. So we actually talked with a company called Daydream Specialties here in Grand Forks who does mostly contract decorating. So we ended up kind of purchasing the company in two parts where we took on more of the sales and operations side and then Daydreams took on more of the production side.

Transitioning two brands into one is a monumental change in normal times. I can't imagine the difficulty in this. How did you and your team ensure a smooth transition?

Um, the smooth transition was just going to be Well, we're buying Trojan. Trojan's gone and we're going to move forward and we're just going to bring everything under the ProVita roof. We're going to— and all out of kindness and love and care, you know, like that. But like, we just got it. We got Trojan's done and we are going to take care of everybody. We're going to take care of the clients. We're going to, you know, just kind of that weight that we were putting on ourselves. And that, that got back to Brad Nelson, who's Troy's dad. And Troy or Brad asked me to go to coffee. And so we sat down and, and I shouldn't say we sat down, he sat me down and he, in not so many pointed words and a few pointed words, he said, Trojan's been around for a long time. So is Nelson Specialties. There was a lot of equity and brand that, that went with that and really said it would be stupid for you to do what you're about to do. And then I left the coffee.

You're about to do what? Meaning what?

Just kind of say Trojan's done. Everything's Probitus now and kind of let the Trojan name go away and let it kind of go, go on. Because for our company, we also have a branch in Fargo, North Dakota, and Bismarck, North Dakota, and Minot. And Trojan was only in Grand Forks. They had clients elsewhere, but really it was the Grand Forks market. So We're trying to figure out, well, how do you bring that into a company that's maybe broader? So he, like I said, he told me I was stupid. And I say this because now 3 years later, Brad, his wife Helen, you know, we text, we meet, like it's a very cool relationship. So I got done with that coffee, went back to my office, and now this was in the back of my head. The last thing I wanted to do was make Troy's parents upset. You know, after all that, they were already upset enough. And thinking like, what about Christy? And what about, you know, the rest of the crew? And so we needed to reevaluate that and talk to Gary and Savannah. And after talking to them and a lot, a lot, a lot of prayer, we decided to not let that Trojan name go, and it will never go away. And the, the words that we decided to use, um, are continuing the legacy of Trojan. And we put that on our, our sign, we put that on our car that we have in Grand Forks, we put it on our business cards. Every once in a while we'll do some kind of throwback stuff where we'll have you know, the Trojan logo, the Purvitas logo, anyways, just kind of merging the two together and being okay with that. And I still remember walking out into our showroom and kind of making the announcement to everybody. And I was just like, it felt right. And to this day, I just, I can't imagine our company without it being a part of Trojan and vice versa.

Christy, you want to add to that?

Yeah, I have said from the beginning, and I still say it today, they adopted me and I welcomed them into my home because they all moved into our office. And so here I'm still going to the same building every day that I would come and see Troy and Jess at, and it was different but it was the same. And it was comforting that they weren't going to let that name and that logo die, essentially, with Troy and Jess. I didn't realize until the possibility of not ever seeing Trojan Promotions logo again, it was painful. And I didn't, I didn't really realize how much you become something when it's such a big part of your life. And I had to detach myself from that. Identity of Trojan Promotions and keeping the logo, having it on the sign. When I drive up to the building every day, I still see the Trojan horse whose name is Lemon Drop, in case anybody wants to know. It's comforting.

It is.

Chrissy, would you learn about that process of merging and what advice would you have for other distributors who are merging two teams together and two brands?

You know, that moment in my life, it was really a sink or swim moment. It made me really sit down and internally decide, like, what do I want for myself? And, you know, Troy was old school, and he— but even though he was old school, he had already started us down the technology path with the adoption of Commonsku. So that was our order entry platform when this whole merger happened, and Provitas was already using it. So it was a relatively seamless transition for me. In fact, honestly, I really wish Troy was here to see where this platform has taken the business and everything that it's allowed our company to do. The flexibility to work from anywhere, it was really a game changer for me and, and my young family especially during COVID lockdowns. My kids were out of school. I was suddenly found myself at home. What am I going to do? And my family has greatly benefited from the freedom, and it made me a better mom, a better wife, and, and I really hope that that translates into being a better teammate and a better employee.

Love that. Matt, what about you? What did you learn through this, uh, transition and what would you encourage other distributors who are considering merging with another company or acquiring another company?

The biggest thing I learned, I would say, is that God's in control. I'm a cradle Christian Catholic, but being a Type A, you know, business go, go, go sort of person, it's hard to submit to his plan. Since I put that humanity and that wanting to do it myself in front a lot of times. Kind of that season in life when this whole thing was happening allowed me to step back and just let God take control. And he will put things in front of us. We just need to pray and submit to that. And that doesn't mean that you stop planning. That doesn't mean that you stop preparing. That doesn't mean that you don't think for those next big, great ideas. But the reality is he's in control and you can plan till you're blue in the face. And if he puts something in front of you, you better be ready to deal with that and do it his way versus your own way. Or else, I mean, it's just not going to work.

Hmm. Last 2 questions for you. We— this industry is fascinating and we have a unique opportunity to work in so many different roles, particularly running a business. Like you sort of have options to what you're going to focus on as your business evolves and grows. Matt, what do you enjoy doing now in your specific role? Where do you find the most enjoyment in what you do today? And I'm going to ask you the same thing, Chrissy.

So, this is crazy Matt here. I hadn't been able to hold— like when you're running a company and trying to get it up off the ground and when you're the person that's responsible for most of the sales when you start a company, you're really just trying to keep clients that you already have and, and kind of go through that process of taking care of clients. And I hadn't been able to cold call in a long, long time. And with this new transition into the way we're going to market, my— one of my skill sets is cold calling. And I'm excited that I've been able to cold call for like the last 3 or 4 months, and it's just been literally rejuvenating. I've got way more energy and way more excitement about my, my day-to-day work than I have in a long time.

That's a rare gift. What kind of results are you seeing, uh, post-pandemic cold calling?

Awesome. I mean, because that's the thing people don't realize— people want to be called on, people want to be, you know, pursued, and we're just so afraid to do it. So it's, it's never changed, it's just I get to do it again.

Are you, you going after certain verticals? Um, here's me peeling this back a little bit just because I think it's fascinating. You go going after certain verticals based on clients you serve? What's your strategy around that?

I'm going after some more kind of, I want to say national accounts or accounts that are maybe outside of our market that I've got loose connections with through my market or through my network that I've had in business for the last 17 years.

Very cool. Chrissy, where do you find the most enjoyment in what you do today?

You know, when I was with Trojan, I had a hand in everything start to finish. I was in client meetings, I was invoicing, I was building websites. And since Provitas has kind of separated those processes, I'm so happy to be in the role of just taking care of that client's initial needs. I get to find the item that they want, whatever it might be. And I love hunting the unicorns. I think it really brings out my competitive nature. And when I'm challenged, on an item I've never sourced before, that's pretty much where I shine.

Yeah, you love working with clients. That's been apparent through this conversation and closing deals. You love that. That's awesome. Chrissy, let's stick with you. What are you most excited about as it relates to the future of Provitas and the future of our industry?

Sure. As a company, our reach is expanding outside of North Dakota. And I'm, I'm really most excited about cultivating those relationships with the people outside of our region. And as for the industry, I really love that we're not just pens and koozies anymore. I love selling a brand name tumbler or fun technology product that's hot on the market and having a client come to me and say, hey, I found this at a retail store and being able to say, yes, I can get that for you and I can put your logo on it. It's really next level. And I can only see it getting better.

Matt, how about you? What are you most excited about as it relates to ProVita and the future of the business?

As the kind of CEO leader in our team, I really look forward to the growth, all of the new people that we're going to be able to bring into our company and getting to know those people. I just love that relationship aspect with the team that we work with, not just here in the US but internationally, like I said, with our connection to the Philippines and just getting to know a new culture and people in a different culture has been just phenomenal. Yeah, and then very cool industry-wise, um, I, I feel like I'm excited to compete. Like Chrissy said, her competitive nature, I'm the same way. I love to coach, I love to compete, and I'm looking forward to competing with those distributors that are looking to disrupt our industry. I'm looking forward to competing with the ones that don't have a clue what our industry is and try to come in and disrupt it, and learning what they're doing. And I look forward to the ones that are kind of similar to us who've kind of been coming along and now are ready to jump out. Um, I look forward to that healthy competition because it's going to make us both stronger.

Yeah, great point. I feel that energy from both of you. Um, thank you so much for joining us today. Thank you for being being so open about your strategy and some of the tactics you've used, and particularly the relationship with Trojan. That took a lot of guts, and thank you for your time today.

Hey, we really appreciate it, and thank you so much for having us on.

Yes, thank you.

Thanks so much for tuning in to this episode of Skucast. Be sure to keep up with our latest content by subscribing to Skucast on iTunes, or to our blog at community.commonsquew.com. Until next time, friends, thanks so much for listening.