The Smell of Leather – The History of Rochester Shoe Stores

With things going along so good most owners would leave ‘well enough alone.’ Not Jack Rubenstein though. With an eye to the future he was unsure if he knew what steps to take to assure the continued success and growth of the business. His team of confidants – his lawyer, accountant, and friends – suggested that he talk to a professional consulting firm to analyze his business.

Whenever Jack decided to do something he usually did it first class. He was true to form when he met with Mr. White, a representative of the George S. May Consulting Company. Mr. White explained that his company was international in scope, providing clients with proven business methods for cutting waste, reducing costs, and increasing profits.

Jack said, “Didn’t you leave something out? How about doing more business?”

White said, “Of course.”

He said that they start by determining if there is a real need for their services. Only when it is agreed that they can make a valuable contribution to the company’s operations do they begin their work. Mr. White added that the implementation phase is what sets his company apart from other consulting firms. He explained that without helping the client implement the recommendations, a consulting firm’s job was only half done. Over the next couple of hours Mr. White questioned Jack about all aspects of the business and asked what his goals were.

Now it was finally Jack’s turn to ask a most important question – “How much will it cost?”

When White said that their fee would be $5,000 Jack gulped and said he wanted a day or two to think about it. Five thousand dollars was no small amount, especially back in the 1950’s. That evening, as Jack was relaxing after a good home-cooked meal, he began reading the current edition of the Boot and Shoe Recorder. The Boot and Shoe Recorder was a monthly magazine for the shoe industry. In addition to advertisements for shoe manufacturers, the magazine had articles of interest for the general business world.

As he read, Jack came upon an article about business consultants. His eyes widened like an owl in the dark. What a coincidence! After reading the article he cut it out and put it in his pocket. He wanted to show Mr. White why he decided to hire his firm. The article said, “A business consultant once said that the one thing that tells me a company is in trouble is when they tell me how good they were in the past. The key to ‘long term’ success is the willingness to abandon the policies that made it successful in the past and to start all over again.”

The next morning Jack couldn’t wait to tell Mr. White about his decision to hire the George S. May Company. He was relieved when he found out that the store would not be inundated with business consultants all over the place. There would be just two – one concentrating on the office procedures and the other on the store operations of receiving merchandise, displays, customer service, advertising, and store personnel.

After several days the gentlemen submitted their reports and asked Jack to study them. A date was set when they would meet and discuss all of the recommendations.

The list presented by the consulting team was widespread.

1.) There had only been one financial statement for Jack to analyze – the year-end statement prepared by his accountant. It was strongly urged to have his bookkeeper prepare statements at the end of each month, to include cash flow and inventory turnover reports.

2. )It was suggested that the signs on the displays be done professionally. It was obvious that the employees did not have the skills necessary to make attractive signs.

3.) Limit employees use of the telephone to important calls. The consultant said that in the short time he was around the store he was surprised at the amount of calls the employees were making and were getting.

4.) Use more displays of impulse items throughout the store.

5.) Expand the use of the PM system. PM stood for ‘premium money’ and was used as an incentive for the clerks to sell certain merchandise. It might include a poor selling style, a group of odds and ends, or special buys the store made on manufacturer’s closeouts. PM’s could vary from 25 cents to three dollars a pair, depending on the item. PM’s were paid in addition to any commissions earned.

At this point Jack thought the proposals were okay, but questioned if they were worth the $5,000 he invested in the consulting company? But then, it got more interesting.

6.) Because the consultant was the father of two young children he thought of an idea that would have a profound affect in the children’s shoe department. By keeping a record of each child (under the age of 10) there were ways the store could develop a loyal following. Specifically, the record would include the date and size of the last shoe purchase for that child. In six months a card would be sent to the parents reminding them to bring their child in for a free size check. Whether the child needed a new pair of shoes or not, the ‘reminder card’ was good for a 10% discount on their next purchase.

Although Jack was beginning to feel better about his investment in the George S. May Company, the best was yet to come.

7.) Sales clerks had been earning a base salary plus a 5% commission. The base salary was determined by the amount of experience the employee had, and by a few intangible items.

Mr. White said other clients that dropped the base salary and increased the commission saw a significant increase in sales.

Jack shuddered at the thought and said it would cause too much of a morale problem. White suggested that the new compensation system be tried for six months, and that the employees be guaranteed at least what they earned for the same time period the year before.

Then something strange happened, Jack was struck for words, a rare occurrence. He finally looked up and said, “Can’t lose, can we.”

Jack thanked the consultants and handed Mr. White a check for $5,000. White handed it back and said, “Our work is not done – now comes the implementation phase.”

During the next two days Mr. White worked with the bookkeeper, teaching her how to do the monthly statements and showed her other time saving systems in the office. The other consultant worked with Jack and the salespeople. They developed a new ‘PM’ program, contacted a freelance artist to do the signs, set up displays of impulse items throughout the store, and got things ready for the new children’s ‘reminder card’ program.

The time finally came to announce the new commission plan. Because of the magnitude of the new compensation plan a meeting was called for the next morning, about an hour before opening. Although both consultants were there they thought it was best for Jack to present the plan. The three of them decided to hold back the six-month guarantee idea until he needed to use it. That would be his trump card. The consultants would be used for back-ups to answer questions and to give examples of other businesses that were successful in adopting the straight commission method.

To begin the meeting Jack said that he hired the George S. May Consulting Company to assist in the growth of the business. He explained that as the store grew so would their incomes. He concluded his introductory remarks by saying that he wouldn’t do anything to harm any of his employees.

As the time drew closer the palms of Jack’s hands began to sweat. He had no idea what the reaction to the straight commission plan would be. He took a deep breath and said, “Beginning next month there will no longer be a base salary, but your commission will go up to 10% from the current 5%. I have no doubt that the way our business is growing you will all make more money under this new system.”

There was silence – deafening silence. Then Larry, the oldest of the employees, spoke up in a loud and challenging voice. He was so upset that he was foaming at the mouth, a trait that he had exhibited a few times before. He forcefully said that he did not want to be on straight commission.

Asking him to calm down and listen, Jack reminded Larry that he had the biggest following in the store and that his ‘see you’ customers alone would be enough to make his earnings grow under the new system.

Another employee asked why the change was needed and Jack explained it was to give them all the added incentive to wait on more customers and to suggest additional items. He emphasized that it would be good for the store and good for the employees.

When another one said he preferred to stay on the old system, Jack thought it was time to play his ‘trump card.’

Rubbing his hands together and speaking like a barker at an amusement park, Jack said, “Tell you what I’m going to do. At the end of the first six months if any of you have not earned at least what you would have under the current system I will make up the difference.” After a little pause, Larry stood up and said, “Guess it’s worth a try boss. I’ve been working here so long that I know you mean what you say.”

Jack glanced around the room and saw all of the other employees nodding in agreement.

Mr. White stood up to say a few closing words. He said that Jack was using great vision in hiring the George S. May Consulting Company. “Most of our clients are large companies with stockholders to answer to. It is quite unique to have a small independent owner invest in the time and the money for our services. We gave Mr. Rubenstein our recommendations based on what we know have been successful for many of our other clients. I am confident that with Jack running the ship all of you will benefit.”

The commission plan was implemented and the next six months came and went without a whimper. Everyone was making more money and they were all happy as a lark.

The article that Jack cut out of the Boot and Shoe Recorder hung on his office wall for years. He realized that the article might well have been the deciding factor in hiring the George S. May Company, and that decision led to the growth and future expansion of Rochester Shoe Stores.

The George S. May Company was founded in 1925, and like Rochester Shoe Store has prospered through three generations of family ownership. The company has helped more than 500,000 businesses in 3,000 industry categories. Its customers are not just retail stores, but span a wide range of virtually every type of business from construction, manufacturing, and wholesale, to service and health care.

The survey analysis used in the 1950’s with Rochester Shoe Store continues to be the key method of determining if the firm can, in fact, help a potential client. As Jack Rubenstein found out, the recommendations from the George S. May Company are only the first part of the consulting project. The work is not done until they assist the business owner implement the various recommendations. Then, after the consultants leave, the company remains ready to assist their client through a continuing follow-up Retainer Program.

Today, the George S. May International Company assists businesses in the United States, Canada, and Mexico, continuing the tradition of supporting independent companies that George S. May started more than 80 years ago.

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