There are two ways to get more business: win new business or get your existing customers to spend more. It is important to ensure that you do not focus on one at the expense of the other, as both are important for growing your customer base. This is something Phillips & King International, a distributor of tobacco, vapor and alternative products based in California, has been doing since 1906.
Sergio Montolfo, general manager of Phillips & King, has seen his company grow over the years in spite of challenges on the state and federal level and all the changes that have taken place in the markets his company deals with. Phillips & King looks at the 50 states as individual countries, each with their own set of regulations and compliance needs. In addition to understanding the requirements and challenges of different states, Montolfo also has to stay on top of the trends emerging from each industry.
In the Q&A that follows, Montolfo shares his views of how other tobacco-centric businesses and those working in the industry can stay ahead of the curve and grow their share and presence in the market.
Tobacco Business: If you could go back to when you first started at Phillips & King, what advice would you give yourself?
Sergio Montolfo: Master relentless focus: Find the most critical things the business needs for the next six months, make them the everyday focus of every person and hour you can spare, and cut out everything else to the point where it hurts at least a little. Only then will you have the focus you need.
For tobacco businesses that need to grow their customer base on a budget, what advice would you give them?
At Phillips & King, we have a lot of repeat business and feel we offer the most value with long-term retailers. However, we need to keep bringing in new business as well. Old business can falter if budgets change or people move on, so it is important to look for new opportunities. You need to start a relationship early, so that it is mature enough to deliver new business when your other work is completed. Grow your business with caution—this is the only way to minimize the risks and increase your chances for success.
What has been the biggest challenge in expanding Phillips & King?
How and when to expand your business are key decisions that every company must face eventually. Making the claim that we are a “one-stop shop” is a bold statement because you had better be able to back that up. The largest challenge we have had at Phillips & King is being able to adapt and maintain tax and compliance for all of the local state and city ordinances throughout the entire country.
Traditional retail across all industries is struggling in the modern commerce environment. Our customers are at risk—that applies to small and medium businesses. We have the pleasure of being able to collaborate with local business owners in every state to identify ways to create sustainable strategies. We must help them create memorable in-store experiences that are irreplaceable by passive consumer online purchasing.
During your tenure at Phillips & King, what’s the leading factor to which you would attribute your successes?
Perhaps the most important of the success factors is character. Self-discipline combined with honesty will open countless doors. Trust is the foundation of all relationships. When people know you and believe in you and are convinced that they can trust you to keep your word and do what you say you will do, they will feel that they are far more likely to get the things they want through you—to get the things they want, faster, sooner, easier and with greater certainty.
How have your thoughts on running a successful business and being a leader evolved over the years?
Keep looking ahead. Where do we see the company in five, 10, 20 years? Is what we are doing now in the interest of those goals? In addition, your people are your greatest asset—employees, customers and vendors. They are invaluable resources of information and ideas.
How can businesses stay ahead of the curve and jump on something valuable before it becomes a trend?
Put yourself in the right environment and around the right people [by] attending various trade shows globally, such as the TPE (Tobacco Plus Expo) coming up in January of 2018. These trade shows are great venues to discover upcoming products and trends, and [they’re] a place to build relationships with people that are on the front lines. TB
– Interview by Ben Stimpson
This story first appeared in the September/October 2017 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.