Episode 286: Sales Leadership at Scale with Steve Cuthbert, CRO SanMar

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What is the most important factor in running a sales organization that produces over $2 billion in revenue annually? Well, that's what we chat about today with Steve Cuthbert, the Chief Revenue Officer at SanMar. Steve has over 25 years' experience in the outdoor textile industry and prior to joining SanMar was the VP of Sales for North Face. Today we talk with Steve about sales leadership, technology, and SanMar's recognition by the Wall Street Journal as one of 2022's best-managed companies alongside other companies like Apple and Microsoft. Hi friends, I'm Bobby LeHew, Chief Content Officer at Commscue. Hey, before our chat with Steve, this past week we opened registration for our most anticipated event of 2024, SKUCon, held on January 14th in Las Vegas. Now, this marks the 10th time the industry's most innovative thinkers will gather together to connect, learn, and reignite alongside other like-minded pros. If you're a new listener, SKUCON breaks boundaries in the promotional products industry and sits at the cutting edge of merch life. SKUCON features stories from pros in the trenches, fresh ideas from tomorrow's leaders, and a celebration of brilliant brand execution and growth. This year's event welcomes experience expert Joey Coleman, who's the author of the book "Never Lose a Customer Again," who will also be a guest on our podcast next week. Plus a lineup of the most progressive industry voices today, including Jeremy Lott, Jonathan Isaacson, Denise Tashrow, Danny Rosen, Kate Hallett, Andrea Stoll, Brian Duran, Isaac Ezroney, Reba Joy, Kate Nash, and Kirby Hasselman. Plus the most important part of SKUCon, you, the community. So join us for SKUCon as we celebrate our 10th journey together in the only way we really know how, by imagining a bolder tomorrow. SKUCon always sells out quickly, so be sure to register you and your team today at skucon.com. Today's episode is brought to you by CommerceHQ, 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 commonskew.com. Now here's my chat with Steve.

Thanks for joining us today, my friend.

I'm glad to be here.

Your background, as I mentioned in the intro, VP sales for North Face and Polartec, fascinating. Where do you see strong comparisons to like North Face and SanMar?

I think probably the biggest similarity between the two companies would be The passion that each of them have, different passion, but certainly rises to the top. At The North Face, there was a passion for protecting the outdoors and protecting the environment and bringing great product to the marketplace and being the global brand that it is. And that was your North Star on, on a daily basis. And the folks that were there were passionate about that. That was their background. They just loved it. Love that day in and day out. And then you shift over to Samor and the passion is there to do, to do good in the world and to protect the environment and all those things. But it's also about doing good by our customers and doing good by our internal customers and our team members, the communities that we manufacture in and making sure that we're being good partners to them and providing sustainable living in an environment that they can be in. So the passion is different, but it's certainly the strength of it is very similar between the two companies for sure.

Yeah. Yeah, with over $2 billion in sales, you, in your role, Steve, you're leading one of the most successful sales teams in North America. What do you think— I'm really curious because you're talking to an audience of entrepreneurs, you're talking to an audience of entrepreneurs who are running businesses of all sizes. They might be running $50 million companies, they might be running $5 million companies. But as far as the distributor side, and of course there's 30% of the audience is suppliers too, what do you think is the most important for a sales leader at your scale to understand about sales growth? In other words, how do you think about sales? I know it's a very broad question.

No, that's It's a good question and it's a little different than maybe what I'm used to being on the retail side. And that is for us here at Samara, me as the leader, this might sound weird in saying it, but the priority for us is not the sales that we receive. Now that doesn't mean as a salesperson you don't want to go out and grow the business and have good revenue. That, I mean, that, that's understood, but we can't do that unless our customers are successful and their sales are successful. So for sales growth for us as a team, my team is about the services that we provide to the customers and how we can support them in their business. Because we could have a campaign, we wanna go sell more t-shirts in a month, but if we don't provide them with the tools and the service and the inventory and the customer support and all those things, then it's really a fruitless exercise. And so for us, it's all about what can we do to service the customer from all aspects of the company. And if we do that, we believe and understand and know that the sales will come. And so for us, it's not about waking up and saying, "Hey, we need to sell more t-shirts today." It's more about how do we support our customers so they can be successful in their job? It was certainly a departure from my past experience because we were selling to retail and showing up, trying to understand how our brand would show up and trying to drive retail sales. It's just a different way of thinking. Where here it is about how can we support our customers and making sure that they're getting what they need from us so that they can be successful.

Has that been the biggest distinction between your previous life in predominantly retail and then working through a client partner like a distributor or printer of some kind? That's the biggest distinction.

We're one step removed, we're one further step removed from the end customer, and it's there that we really need to— where we identify as what we really need to support the distributor. The distributor needs to will be successful with their customers and who the end consumer is. But for us, we need to make sure that our consumer or our customer, the distributor, has what they need to go out and be successful. They're the ones out hunting the business with their customers, and we need to make sure that we're providing all the tools that we possibly can for them to be successful.

Yeah. Does that mean there's like a split between your sales team then has to understand who their customer's customer is on one hand, And then on the other hand, they also just have to make sure they're providing the right tools to the distributors to go sell. So you're selling through these channels.

Yeah, the— I think one of the luxuries or benefits that we have with our sales team is that they've got long, deep relationships. For the most part, we have new customers come in or new salespeople that come in. Obviously that happens, but for the most part, we have a sales team that has long, deep relationships within their territory in the marketplace. And that alignment that's there, it's not so much they have to now know, they already almost know what the customers need, what those distributors need. Each distributor has a different need from one another. And so I'm so proud to be able to lead a team that has such deep relationships and the impact that they can have on our customers because yes, it is important that they understand what this distributor needs to be in front of their customer. Sometimes we join them on those end user sales calls depending on what it is. But for the most part it is like, Hey, what do you have going on? What do you need and how can we support you in that effort?

Yeah. Speaking of, SanMar's integration with Commonsku is so critical for our future, not just for our community, but also the entire digital transformation, what it means as an incredible wave of innovation for the industry at large. And how do you see Commonsku and SanMar, the Commonsku and SanMar integration enabling better and stronger sales for SanMar specifically?

Yeah, so maybe I would go back to my previous comment and again, it's about us providing services to our customer that make it easier, tools for them so that they can be more successful. And so we obviously see the Common Skew and the SanMar integration as part of that. Before, somebody would have to go to Common Skew, they would do it, they would do a presentation, they would get ready, and then they would have an order and they have to back out of an order, go into SanMar, however they were integrated with SanMar previously, and place that order. That's inefficient. And so the more efficiencies that we can build for our customers, that obviously is something we want to do. And so clearly there is an ease of working through the customer or the distributors already in the CommerceCube platform. Why create a step where they now need to exit and go order from somewhere else? And so for us, that ease of doing business is something that we look for those solutions all the time. And this is just one, a perfect example of that.

The EPO integration will present new opportunities for us to innovate faster. And just like you said, both, both SanMar, the alleviation for SanMar in terms of probably ops burden and the speed that distributor then can free up time to go focus on other things. From a sales perspective, what's the biggest challenge and opportunity ahead as we look at EPO integration specifically?

That's a good question. I don't know if I have seen challenges right now. I think the challenge that we identified was that we were causing another step for our common customer to go through that didn't— wasn't as efficient as it possibly could. So the opportunity for us is CommsQ and Sammar working closer together to take that barrier or that step away to allow them to free up opportunities for them. Listen, the more that they can be out selling or engaging with their customer and less time on the back office things, that's where the secret sauce is. And so when you can take that noise out of that process, allow them to be out in front of their customers, that's where we all succeed in that, in that kind of scenario.

Yeah, and for distributors, that puts the joy back in the business.

For sure.

That's the thing we hear a lot.

For sure.

Let's talk a little bit about supply chain and inventory, because I've heard from other leaders in our industry that inventory is a big challenge this year, meaning post-COVID, many suppliers are sitting on a ton of inventory, and that ties up capital and could have downstream effects. Does an oversaturation of inventory pose a challenge for you and your team, or even distributors downstream?

So it's a, it's a, it's an interesting situation I think that we're in. So when you look back 51, 52 years ago, Marty Lott started the company. He built the company based on having inventory to service our customers. It's a very unique model. It was one that I was foreign to coming in from a retail side where you're trying to push inventory away. This is an— this is a scenario where, hey, we want inventory in-house so we can service our customers. And we know that over the last couple years we fell short to where this— on what our expectations are to service our customers because we didn't have the inventory to service their needs. And so we've spent a lot of time in the last— like everybody else, 18, 24 months— driving that inventory back up to a level that we're, that we're pleased with. There are categories or areas, Bobby, that were more heavy than others, where there are still some areas that were a little short on that we're trying to catch up to. Yeah, we probably have more than we would normally have, but one of the things that we looked at when we went into 2023, one of the goals that that we had as a company, and not knowing what 2023 from a macroeconomic perspective is going to present to us, was to prepare for any rebound that might come in 2024. And so we knew 2023 might be a rebuilding year. We knew that it may cause for some elevated inventory levels for us. It was something that we were expecting and forecasting. And so yeah, is it uncomfortable?

No.

Would we like to be less? Sure. But at the same time, we're excited to be able to support our customers when we do believe the business will recover to levels everybody expects it will.

Yeah, and that's a great perspective going back to Marty's original vision, having inventory available. I know as a distributor, and we were spending around a quarter million with SanMar a year, and that reliability was just so solid. And it's a great perspective because it's like, this is a good problem to have if we—

yeah, it is. Presents challenges on the financial side that we're working through, but at the end of the day, Bobby, there were many cases over— and this is and just for us, it happened in the industry, but there were a lot of cases where you'd have a distributor that would go out and they would sell something and then would come back and they placed the order and the inventory would be gone.

Yeah.

So all the work that they just created in front of their customer doesn't put them in a, in a great light in front of their customer. And so the reliability was, is such an important thing for us that, yeah, we would rather be a little heavy but be reliable to our customers. Yeah. And we know that we'll work through it.

Has the product category or SKU count changed dramatically this year, or are you making big changes to it next year?

No. If anything, we're actually— we're adding styles. I think that goes to the rebound, to be honest with you. From a style perspective, in 2023, we probably, we probably added around 250 new styles to the line. Now SKUs will obviously grow dramatically from there, but from a style perspective, we have a fair amount that we can go out there and present to our customer and new. And it's in all categories. It's in our retail brands, it's in our own private label brands. And so we're really excited about the launches that we've had both in spring and then what we just launched for fall.

Wow, that's significant.

It is, it is. Yes.

Have there been any surprises in the sales numbers this year in terms of either category product leaders, in terms of category, or anything else that has surprised you year to date?

No, I would say that the basics business is certainly gaining strength again. I think over the previous years it was maybe— it was— it fluctuated because of the lack of inventory.

Yeah.

So we're really pleased to see that there. Retail brands has been— has always been good for us, and for— and, you know, we need to make sure that we continue to bring newness in that because I'll speak just from an experience. If, if somebody had bought a North Face product in 2022 and 2023, they may want something different in 2024. So our team is constantly looking for newness to bring there so that there's another reason to buy. And so obviously what we would like them to buy from us. And so for us, it's just making sure we're bringing the variety that the customer's expecting from Samarkt.

Yeah. You had such high respect going into SanMar coming from North Face, and SanMar is a household name to everyone listening, and SanMar has received tons of accolades not only in the industry but outside of it. The Wall Street Journal recognized SanMar as a 2022 Best Managed Company, which I think that's the second year in a row alongside companies like Apple and Microsoft. What an incredible honor.

Yeah.

What is it about SanMar that you wish people knew that gets most often overlooked?

I think, I think you would be unique, or what's interesting is that we— those accolades come and we might do a high five and we just move on. It's not something that we dwell on. And I think that's probably what makes this the secret sauce behind the company. Yet we're very proud of those things. We're very proud of the team and, and what we did. We celebrate internally, but we don't take that so seriously that we don't— we try not to take the approach that we're pounding our chest and how great we are, because I think once you get there, you're in a dangerous territory. And so we appreciate it. It confirms everything that we believe in and we're trying to do internally. And so that, that confirmation of what you're doing matters and it works. But at the same time, it wasn't a goal that we became a Wall Street Journal Award winner. Like, it was— that wasn't something to be aspired to. It happened. And I think if we try to aspire to do those things, then more than likely that may not— you might not have the same result.

Yeah. Someone once told me that when those accolades come, it's more ratification of values than it is reaching for them. So that—

and that's We're very proud of it. We're not going to say— certainly it definitely is recognized within the company, but it's not something that drives us every day.

Yeah, a lot of— Steve, in your role, it's fascinating that you're managing such a large, complex sales organization. So I'm really curious about Steve and how you, how you operate in the world, because who your mentors are and how you think as a salesperson. So both your grandfathers served in the war, and they sound like such an influence on you. And I know you've been reading about that recently. How has their story impacted the way you think about life? What have you learned from their experience that has encouraged you?

Yeah, it's in a— I, I'm certainly very proud of the path that my grandfathers took. They both fought World War II in the Pacific, and as I look back, I mean, they were kids. They were 19, 20, 21 years old going in, in into this, and I at 19 and 20 could never fathom that being the environment that I would be in. And I think just understanding the perseverance at a very young age. They didn't have a choice. They were thrown in this and they had to persevere, and it drove them when they got out of the service to be very successful. Not college educated, but in their both regards took careers that became very successful, and, and I just shaped them as being great humans. And so I think for me what it tells me, and that is it's okay to put yourself in a place where you're uncomfortable. I think that's how you grow as a person and what drives you each day. It's hard to do that. We live in a world of convenience and how do we make things easier for us on a daily basis. And sometimes you do need to be reminded humbly sometimes where, you know, it's not always easy. And going through those challenges actually shapes you into a better person. So I guess what I've tried to understand or try to do is not be afraid or understand that hard things happen. And how you grow is how you grind through those things and get to the other side.

Yeah. What do you enjoy doing when you're not working?

So I have certainly spent time with my family. I, my, my— I have a son who is a second year in college, and I have another one, another son who's a senior in high school. And so my wife and I can see the days with them becoming limited, and so we try to sponge up as much of that as we possibly can. From a, from an activity standpoint, when I was with The North Face, outdoors were, were pretty key to our culture. And so I do a lot of skiing in the, in the wintertime, and I do it with the family. It's a great life sport. I was fortunate to get them in there early so the four of us could do it as a family for the rest of our lives, which has been great. And I play a lot of golf in the summer. And so again, with the kids and my wife, and so we have a really great time. It's— but getting outside and doing that, it's been a lot of fun.

I know North Face is obviously a big influence. Are there other brands or mentors that you follow that inspire you?

It's an interesting question. I don't know if there is— not that I blow with the wind in terms of brands that I follow or that inspire me, because I think there are a lot of brands that are out there that we use on a daily basis, from Apple to Google. Just the innovation that they continue to drive is certainly something that I don't— I certainly aware of. For me, and maybe because I just turned 50, and you think about life and health and all those things, and I just think that physical personal achievements that people do, I've just grown— have it maybe a stronger appreciation as I've gotten older that Man, it was— it's incredible what people can do nowadays and the envelopes that get pushed on a daily basis. I get inspiration from that, and it ranges from anywhere from— I still follow all the athletes at The North Face to watching the US Open on TV last night and watching these folks play. It's just, it's an amazing thing to watch and understand the preparation and the dedication and the grind and the work. All the things that happen behind it, I think, are really— that's inspirational, inspirational to me for sure.

Yeah, for sure. Speaking of, Steve, I mean, you've had a pretty amazing career, and you're talking to an audience of entrepreneurs and salespeople. And as you look back on your own experience, how would you encourage a young salesperson today— you do this all the time probably in your role— but how, as they consider growing their business, facing opportunities, if you had coffee with them just a few minutes to share a couple of important life lessons that you've learned along the way, what would those be?

I think the one of the biggest things that I've tried to do, and again, I'm not perfect at it, but we were given two ears and one mouth for a reason. And to really understand, as salespeople, we are hunters by our nature. We want to go out and get after it and sell and do all those things. And sometimes it's about the sale versus maybe the experience. And I think what I've found over the years is that when I spend more time understanding what a customer is going through versus coming through, hey, I have a mission to sell something to this person, I think ultimately you become more successful because of the understanding is where you find the opportunities. Yeah, we're goal-driven and we wanna go do certain things, but for me it is really about putting yourself out there and understanding what's going on and listening to your customer. The other thing I would say, and that is, learn how to be a good communicator. Spend some time in understanding like writing, just the basic writing, we get away from it. Speaking, go to a public speaking class, like, unlearn how to communicate. I think once you can do that, is something that's really powerful. I was fortunate when I was in grad school that we focused a lot on that, on writing and presentations, and it really has really helped me in my career. And so that would be something I would, I would say. I wanted— what my son and I, we talk about what he wants to study and all those things, and he's landed on communications. I said, listen, man, if you can If you can write and you can speak and you can have connections with people, there's— your world is somewhat open, right? And so that's okay. And he's a good writer and he's a good speaker, so it fits him. But that would be where I would tell people to maybe just pay attention to. Couldn't agree more.

Steve, thanks for taking time out of your busy schedule right before the holiday to visit with us. I know it's probably been a crazy week as we head into fall and everything. And thanks on behalf of the CommsQ team for the amazing work that SanMar has been doing along with our own development team. And thanks for being here today.

Thanks, Bobby. Appreciate it. Great talking with you. Take care.

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Until next time, friends, thanks so much for listening.