ELCA Publishing Company Adopts Plan to Increase Sales

Nov 08, 2002 03:00 AM EST

MINNEAPOLIS- Major operating losses in recent years for ELCA¡¯s publishing house called for a conference between the board of trustees. The conference, held from Oct 24-26 resulted in setting three simple goals: better communication and marketing, improved accountability and "grace" from customers.

Beth A.Lewis, president and chief executive officer of the Augsburg Fortress publishing house commented that she has been listening to many suggestions since her inauguration. She completed the ¡°2002 Asking for Directions Tour" late last month to gain comments about the Augsburg Fortress from various church leaders.

Lewis said that most people suggested the Fortress to have a more coordinated market strategy to earn back the trust of customers. They were also concerned, according to Lewis, about the content of the published books and the type of clerical shirts it sells.

¡°The trip was an energizer for our organization, which has been through tough times in the past few years," said Lewis.

Lewis gained great insights from her trip. She realized that the greatest challenge facing the Fortress is testing different products on the market prior to its full launch. Also, she learned that products are often pulled off the market prematurely, before the ¡°word of mouth¡± could instigate sales.

As a means to boost staff morale, Lewis personally met with 120 out of 277 employees of her company. She hopes that the newly adopted ¡°Balanced Scorecard program¡± would help each employee realize his or her attainable goals. By meeting with the employees responsible for marketing efforts, Lewis hopes to improve market direction and coordination.

"We need to make certain each and every employee understands their obligation and commitment, and that we're all going after the same goals," Lewis said.

By setting to all the goals, the Fortress may possibly improve its financial situation drastically. It has already cut back on losses by 2.4 million from 2001. However, heavy operating costs still restrain the profits of the publishing company. Therefore, by the years end, employee cutbacks and reduced inventory could reduce the year¡¯s expenses by as much as $5.7.

"Through July, we weren't looking too bad," Poehlman said. "But in August, sales of the Sunday School materials did not come through for us." In addition to drops in sales of educational materials, sales of worship materials are also down, he said. Sales of educational and worship materials are key to the company's performance, Poehlman said. "We are not doing as well as we had planned, but we have made significant progress from last year," he said.

Poehlman offered some budget suggestions for 2003, including a reduced sales forecast and further reduction in expenses. The company should also do what it can to lift a freeze on employee wages, he added.

After discussions about budget procedure, the board of trustees adopted a resolution that the proposed operating budget for 2003 be based on specific goals and objectives. They are: stabilize sales at

$45 million; cut operating losses to about $950,000; improve cash flow; control inventory; implement the Balanced Scorecard methodology; and unfreeze employee wages.

Hopefully, by adhering to the plan, the Fortress¡¯ operating cost could be reduced to zero, and the publishing company could start to increase.

By Pauline J.