Lessons for Leaders: Putting on a clinic featuring Gary Meyers with Massage Envy & The Joint written April 2014 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives

Franchises have long been the business model of choice for entrepreneurs who don't want to reinvent the wheel — or make a new wheel — but invest in a proven product or service for faster profits.

What happens, though, when an industry not normally modeled as a franchise is introduced to the franchise concept? Launched well, it can expand opportunities for the entrepreneur as well as the people directly serving customers.

Back in 2005, Gary Meyers embarked on a new twist of the franchise business model. After nearly two decades of frustration as the owner of Newport Collision Center in Newport, Minn. – brought on by a lack of control over margins because of insurance companies - he sold his business. For his next venture, he was interested in franchises for the turnkey approach, but didn't realize his ultimate franchise choice would support new industries that provided more full-time employment in Minnesota as well as growing revenue streams.

It started with Massage Envy. Because of Meyers, the Arizona-based franchisor now has 26 clinics in the region, becoming the largest employer of massage therapists in the state, with over 500 employed at this time. As the regional developer for the franchise, Meyers owns three of the clinics and assists franchisees in developing clinics in his territories including North Dakota, South Dakota and western Wisconsin. Customers purchase a monthly membership at the clinics and receive one massage a month at their convenience. In turn, each clinic can employ more full-time massage therapists than a traditional spa based on the sheer membership volume.

Growth hasn't been without challenges. Each store has 45 to 50 employees with average revenue per store of $1.3 million. Not only is this an operational challenge, but the store also needs to have enough therapists on hand to make the service convenient. Meyers had to build collaborations with 14 area colleges that offer massage therapy degrees to fill positions in existing and new stores. He also had the challenge of continuing education offerings to ensure therapists can retain their licenses and managing staff are efficient and professional.

And here's the twist. Meyers recently embarked on a new franchise venture, The Joint, to create chiropractic services in the same business model. "I saw the chiropractic industry the same as massage therapy. There are more chiropractors than can find jobs. The Joint business model will give them jobs, allow them to practice their trade, and make the business side of it easier. Again, customers will pay a monthly membership fee and receive chiropractic care based on their type of membership."

By locating the chiropractic practice near a Massage Envy clinic, Meyers creates operational efficiencies, too. "We've created new industries," he says. "As clinics scale their memberships, it provides a re-occurring revenue stream to cover expenses — and the rest is profit."

It's a vision that ties to contracts for up to 34 Massage Envy clinics and five The Joint clinics by 2015. Meyers Enterprises still relies on the turnkey franchise approach, but the market effect is great jobs for therapists, chiropractors and the entrepreneurs who invest in these franchises. Meyers' projected revenues for the three owned Massage Envy clinics and two The Joint clinics is $6 million in 2014.

If it becomes a business model worthy of envy, it can only help improve the state's — and country's — increasingly service-based economy.

Tips for Scaling Professional Business Models for Profit

1. Look for a service industry that appears commoditized.
2. Tie consumer membership arrangements to the service.
3. Provide inviting facilities for multiple professionals to serve members.
4. Follow a formula of memberships plus visits/month to equal overhead plus profit margin.

Lessons for Leaders: Banking on service featuring Arleen Sullivan and Carl Jones with Anchor Bank written February 2014 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives

It's no secret that the banking industry overall has received bad marks in customer service and loyalty over the past 10 years. With public perception low on banking, it takes a fresh perspective in leadership to inspire customers to see one bank as different from another - better than another. It takes more than one individual sticking to principles and promises.

The executive leadership team at Anchor Bank embraced this truth by energizing core values established 30 years ago. The recession taught them to leave the corporatized branch mindset behind and make all levels of the bank approachable and accessible again. Training across their 15 Twin Cities area locations and a renewed approach to serving customers beyond the typical one-to-one banker relationship have supported stronger assets and sales.

"We call it 4Deep," explains Arleen Sullivan, who has served at the bank since 2003 and is now Market President, Business Banking East, serving the East Metro hub offices. "We want to ensure that a team of people within Anchor are assigned to each of our business customers. When we know our customers, we serve them better."

The team generally includes someone from Anchor Bank's leadership team, a relationship manager, and an expert in services such as cash management and credit. The goal is to ensure the customer forms strong working relationships with the right experts. For example, if a business owner has a question about succession planning or acquisitions, they have direct access to the right expertise, including CEO Carl Jones.

"We want to move as fast as a small business when decisions need to be made," explains Sullivan. Being flexible and nimble suits this bank, founded in the 1960s by entrepreneur Winton Jones, who grew it mainly through acquisitions in its early years (in the past 15 years, it's grown organically). His son, Carl Jones, now CEO, joined the bank in 1992 after pursuing a career in science and biomedical technology. Today, Anchor Bank is the seventh-largest bank in Minnesota.

Approachable executives are part of the Anchor Bank core value system, with key leaders meeting with customers on a regular basis. "Being in banking is a great way to give back to a community," notes Jones, who recalls his father always making customers his first priority and being involved in their business strategy and problem-solving. Through the bank's foundation, 5 percent of profits also go back to the communities in the form of scholarships, charitable, donations, and community development efforts.

Internally, Jones is the representative of the Jones family, supporting long-term customer relationships, seeking bank acquisition opportunities, and supporting the leadership team. That team has transformed in recent years from individual branch oversight to a larger focus and responsibility for the bank's role across the Twin Cities.

A metro focus rather than branch focus means that Sullivan and others have the access and support of the entire Twin Cities leadership, making the 4Deep program internal as well as external to operations. "Our prospective customers and employees tell us it's the active participation of our executives in our customer relationships that differentiates Anchor Bank from its competitors," she says.

Time will tell if the 4Deep program, launched in January 2012, can mend the fences of banking's past and play out in continued growth and loyalty for Anchor Bank, its customer base, and employees. But bank leaders who step out of their offices and back into deeper customer relationships can go far toward bank loyalty and a competitive reputation.

Tips for Deep Customer Service

1. Make sure that customers have strong relationships with more than one person, with defined roles that add actual value to the relationship.
2. Provide regular access to decision makers to strengthen the bond.
3. Introduce multiple services to enhance a customer's sense of value and loyalty.
4. Operate like a united company rather than a group of individuals or separate business unit.