Point of Sale

January 4, 2006

   We don’t celebrate the sellers, except for those who seem to excel in selling themselves and teaching you the same. You’ve probably heard plenty about people like Zig Ziglar and Anthony Robbins.
   I’ll make almost any wager that you’ve never heard of Lew Rothman. His product – cigars – really has nothing to do with stone. What he’s done with his business, though, can teach us plenty.
   Lew Rothman grew up in the cigar business when the cigar store was the quintessential mom-and-pop operation. One of his biggest days in sales as a youth came in 1960 when he managed to sell an entire box of the best cigars in the New York family store to one customer. (The combat-fatigues-clad buyer turned out to be, yes, Fidel Castro.)
   Rothman ended up leaving the business when he married a young lady from Kansas; a city born-and-bred boy, he spent several years in the Sunflower State in bucolic activities like dehorning and castrating cattle. Eventually, he went back to college and back to New York to run a cigar store in the early 1970s.
   Rothman, though, realized it wasn’t like old times, and a store he grew up in wouldn’t make it. He forged a number of partnerships with cigar producers in Central America and the Caribbean, and pioneered a huge national business in mail-order sales. He also became his own distributor, stockpiling huge supplies of cigars to keep customers supplied (and happy).
   Along the way, he cultivated a maverick image while creating a company with sales volumes unseen since the heyday of cigars in the early part of the 20th century. His business, J-R Cigars, became the industry powerhouse.
   And then came the cigar boom of the late 1990s, which should’ve been the big payoff in Rothman’s business. While he thrived with the massive interest in cigars, it also became one large – and potentially disastrous – headache.
   The big push in cigars brought hundreds of new competitors bent on either chiseling Rothman on price or snatching away his premium high-end sales. (And doesn’t this sound familiar in the stone business today?) The boom also created supply problems, with his customers often finding their favorite smokes out of stock.
   Rothman, however, had created a loyal customer base through the years, due in part to his mail-order catalogs with his personal, highly irrelevant and hilarious ad copy. (His refusal to donate premium cigars to the homeless, with a crafty transition to selling something he had in stock, is a politically incorrect classic.) The writing was direct, sometimes profane and always snappy.
   J-R Cigars is no small operation, and Rothman is one of the powerhouses of the industry. However, with those catalogs, he created a personal bond with his customers. You could always trust good ol’ Lew.
   And, when times got tough with supply, he did something fascinating with those customers: He told the truth.
   In one memorable mail-order catalog, he spelled out his problems. He then announced that, because he wasn’t able to satisfy all the orders from his current customers, he wouldn’t accept any new customer accounts.
   He also predicted that the cigar boom would go bust and many of the newbie sellers would disappear. When the market would be glutted with tons of products as a result, he would reward his current customers by purchasing those surplus premium cigars at slashed costs and sell them to his loyal customers at ridiculously low prices.
   Rothman prediction of the cigar bubble popping came true. He also kept his promise, with those long-suffering customers enjoying a bargain bonanza as he snapped up millions of cigars on the market and sold them cheap.
   Of course, by clearing the glut of products, he also stabilized his regular business – his main lines didn’t go at barnburner prices – and the cheap cigars didn’t last forever. His customers, though, didn’t care. Rothman kept his word, and he kept their business.
   Don’t start thinking that Rothman is a little guy scratching out a living. Millions of cigars flow through his retail stores and mail-order business on a daily basis, and recent financial reports show that he employs at least 1,000 in keeping that product moving.
   And, for some, selling tobacco products is a less-than-noble profession. They probably don’t like Rothman’s so-what attitude towards them, either.
   What he’s done, though, is something to think about as similar challenges of a hot market and massive supply continue in the stone trade. He sought sales channels previously untried in the industry and worked hard – often at the source – to maintain a flow of premium product.
   The key, though, is that he didn’t forget his customers. He remained honest with them when problems arose, emphasized service, and rewarded them for loyalty.
   What does he get for that? A lot of trust, and a tremendous business. That’s a sales lesson to remember in building a prosperous 2006.