Pacesetter had expanded to more than 60 branch offices in 38 states — classified as “A,” “B,” or “C,” depending on volume — with a small army of sales representatives trained in a 10-step selling system based on a manual written by Phil Schrager.
Phil Schrager was 24 when he started the company. He says his plan was to put together “an aggressive, dynamic sales organization.” He succeeded so well that in time the company’s name became a home improvement industry synonym for an aggressive style of sales presentation. Many sales reps at many home improvement companies initially cut their teeth with Pacesetter. “We were aggressive, but not high-pressure,” Phil Schrager contends.
Pacesetter sold siding, flooring, blinds, doors, and cabinet re-facing. But its most popular item was windows — first metal and vinyl, later the fiberglass units made in its 100,000-square-foot plant in Omaha. The company’s target demographic was the rural consumer, and from the beginning its means of reaching that demographic was the phone room. Pacesetter operated as many as 13 telemarketing facilities, usually out of its “A” offices. The company relied on telemarketing for leads — roughly 90% of leads came from telemarketing, which was supplemented by canvassing, newspaper advertising, and direct mail — and its reps were trained in how to sell that type of lead. Pacesetter salespeople often made overnight trips to small towns to work a cluster of leads at a time. “Cost-wise, nothing could touch telemarketing,” says Barry Blue, who started as a “factory rep” in 1979 and went on to work for Pacesetter for 26 years, eventually as its national sales manager and then as vice president of its Central region.
Blue remembers the company as “a family-oriented business on a large scale,” a place where “everybody knew everybody else.” That’s a description many who worked for Pacesetter would agree with. Pacesetter management expected its reps and the general managers who oversaw its “A” offices to produce results and its administrative, marketing, and installation employees to do whatever was required, including six-day weeks and extra hours. Turnover was high, but, ironically, loyalty ran deep among those who stayed. It was “a great place to work,” recalls Cathy Lupomech, a 20-plus-year employee and eventually the company’s retail administrative manager. Many in the upper echelon of Pacesetter had joined as rookie salespeople or installers before working their way up to management positions, a path encouraged by the company’s management development program.
In its heyday, Pacesetter was a money machine, and Phil and Harley Schrager were known to generously reward employees, especially salespeople who produced. Phil Schrager was “a tough boss,” says Pete Danielson, a 24-year Pacesetter veteran whose last position was company president. “But you made money and you had fun.”
Through the ’80s an ’90s, annual company-paid trips involving as many as 250 employees were a feature of life at Pacesetter. Stored in a filing cabinet today, Phil Schrager still keeps a stack of small glass plaques, which he used to hand to employees at the annual banquet where the company’s “Victor” awards were distributed. The plaques are inscribed with this quote: “The power of positive thinking is a force so great it has enabled ordinary men and women to reach levels of achievement beyond their wildest dreams.” Employees knew he believed it. “Phil took good care of us,” Blue recalls. “You knew where you stood with Phil.”
Turning Point Along with the launch of PacesetterSucks.com, the year 2002 was a turning point for Pacesetter in at least two other respects. On December 18, 2002, the Federal Trade Commission established the National Do Not Call Registry (DNC). Now homeowners could place their name on a national list that made their phone numbers off-limits to telemarketers. Within months, millions signed on. For Pacesetter and other companies that relied on the “boiler room” for business, that foretold a steadily dwindling quantity and quality of leads.
Yet in the run-up to enactment of the DNC list, no one at Pacesetter was ever given responsibility for formulating an alternative marketing plan. When the DNC list came into being, the company simply tried to wing it. “The DNC list hit very hard,” says Mike Brown, who worked for Pacesetter for 12 years, starting as a rep and progressing to sales manager at the Reno, Nev., office.
Former employees at all levels, interviewed for this article, agree that the DNC regulations dealt Pacesetter a serious blow. “We knew that there would have to be an alternative,” Blue recalls, “and that that would be expensive.” Even Phil Schrager concedes that management was five years too late in addressing the problem.
What Pacesetter did instead was file a brief with the FTC arguing that the new regs struck at the heart of its business. These arguments proved less than persuasive.
