SV, Smoking Vapor - Sales Growth Achievement of the Year
Company: SV, Phoenix, AZ
Company Description: SV challenges you to unabashedly embrace your own style and to enjoy the flavors of your life. Ranked No. 901 on the 2016 Inc. 5000 , SV’s specialized vaporization technology combined with a fashion-forward highly stylized product line is revolutionizing the vapor market and exceeding the customer's expectations.
Nomination Category: Sales Awards Achievement Categories
Nomination Sub Category: Sales Growth Achievement of the Year
Nomination Title: Smoking Vapor - Sales Growth of +400% from Contrarian Ideas
Tell the story about how your organization has improved its sales growth since the beginning of July 2015 (up to 650 words). Begin the essay with the percentage growth in revenue and/or units during that period, over the prior year. Focus on specific accomplishments, and relate these accomplishments to past performance or industry norms. Be sure to mention obstacles overcome, innovations or discoveries made, and outcomes:
At Smoking Vapor (SV) we challenge you to unabashedly embrace the flavors of your life. Ranked No. 901 on the 2016 Inc. 5000 fastest growing private companies, Smoking Vapor’s sales growth of 445% clearly indicates that our forward thinking, highly stylized product line meets our customer's needs. Our top product, the Mi-One vapor device has been recognized for its design, quality, easy of use and discreteness. The success would not be possible if it wouldn’t be for our stellar team. The Company’s purpose is to create innovative and beautifully designed products that positively impact the lives of its customers everyday.
In an industry that has been stagnated over the past year due to strict new government regulations, the expectation was merely survival. However, during a team meeting one of the reps interrupted the sales manager and said, “What if we just do what all the other companies won’t do?” It was a simple thought that changed the direction of the business. Through teamwork and a passion for the consumer, SV has thrived. These efforts resulted in +400% sales growth and +500% net profit growth fueled by combined efforts of the entire team.
a. Focus the Assortment and Guarantee the sale. The team evaluated the top selling and highest margin items and chose certain hero items because of a longer product life cycle and they were easily marketable. Those could safely be ‘guaranteed sales’ to remove any risk from wholesalers making an order. By understanding the customer’s pain, SV had a solution that invited partnership. This resulted in relationships with large distributors that propelled sales on higher margin items.
b. Rethink discounts. The team decided to offer ‘free product’ incentives. So instead of 20% off, it changed to buy 5 get 1 free. The perceived value to the customer is the same, yet the cost of that free product is far less to the business while the average invoice stays higher. This improved gross margins by 10% on average.
a. Eliminated the “call time” metric. Encouraged CSRs to take the time to make a personal connection with customers. Call times increased by more than 30%, but ‘case-closed’ resolutions more than doubled. This cut costs by reducing inbound repeat call volume. Add-on sales increased driving +$10k per month in high-margin sales.
b. Wow the customer. Manager approvals were changed so that every CSR could approve up to $25 to resolve issues. This improved the customer satisfaction rate from 73% to 96% within 3 months. This freed up the call center to create an outbound program resulting in a revival of +100 old clients.
c. Extended the warranties. Changed the 30-day warranty to 1 year no-hassle warranty with immediate replacements and free shipping. While warranty exchanges increased, this process added to the customer satisfaction and encouraged operations to focus on quality control.
a. Credit from suppliers. Typically components are paid for upfront and this cash drain can prevent growth. The SV team engaged with every supplier to develop a relationship and shared financials to build trust. The face-to-face interactions resulted in price concessions on top selling items by more than 6% and led to extended terms and a $250k line of credit with a major supplier.
b. Single Freight Partner. The business had more than 5% lost packages through USPS so they asked Fedex, DHL and UPS to compete for the entire business both inbound and outbound. Fedex became a partner that guaranteed delivery, reduced shipment times by more than 15%. This eliminated lost packages and increased reorder rates on consumables because customers had their products sooner.
By the end of 2016 SV has sold products in more than 20 countries. Smoking Vapor’s contrarian approach to overcome a changing environment has transitioned them from survivor to leader. The steps taken have created customer loyalty and set them on a path of significant growth again for 2017.