15: Road Runner Sports President Mike Gotfredson Jr. on winning customer experience strategies

Road Runner Sports President and Owner Mike Gotfredson Jr. joins the podcast to share how his athletic shoe company evolved into a nationwide retailer over 41 years. Mike also talks with Vistage CEO Sam Reese about how his company uses technology to transform the in-store experience and create new levels of customer personalization and brand loyalty.

Key takeaways and reflection questions:

1. Identify Unique Market Niches: Gotfredson’s father founded Road Runner Sports by recognizing a niche in the market for selling running shoes through mail-order catalogs in the ‘80s, and was able to keep that level of customization and personalization to evolve into the digital age. How are you leveraging market insights to identify opportunities that align with your company’s unique value proposition?
2. Customized Marketing and Customer Experience: Roadrunner Sports prioritized customer experiences in-store through technologies like 3D scanning and personalized service. They excel at personalized marketing tailored to individual customer preferences at every touch point, and view their company as a high-tech database marketing company that sells running shoes, highlighting the significance of leveraging technology for personalization and operational efficiency. How are you leveraging technology to enable data-driven decision-making and enhance customer experiences?
3. Culture of Continuous Improvement: Road Runner Sports implements a systematic approach to identify and address pain points through a top 10 list maintained across departments. How can you empower employees to identify and solve challenges collaboratively?
4. Strategic Thinking: Despite being deeply involved in day-to-day operations, Gotfredson emphasizes the importance of staying strategic by periodically engaging in offsite strategy sessions with dedicated teams. Do you allocate time for strategic planning to anticipate future trends and challenges?
5. Leadership and Communication: Gotfredson emphasizes the importance of over-communicating, gathering feedback, and fostering a culture of openness and collaboration. Do you seek out feedback from all levels of leadership in your team?
6. Pushing Boundaries: Gotfredson advocates for a mindset of pushing boundaries and finding creative solutions to overcome obstacles. What area of your business is not the best it could be?

Transcript

Sam Reese: Welcome everyone to another episode of a Life of Climb podcast. I’m your host, Sam Reese. Joining me today is Mike Gotfredson, Jr. President and owner of Road Runner Sports. Mike, thanks for joining us.

Mike Gotfredson: Thank you, Sam. Great to be here with you today.

Sam Reese: I know your store as well. You are headquartered right here in our backyard in San Diego, and for the people that maybe haven’t had a chance to go into one of your stores or check you out online, who is Road Runner Sports?

Mike Gotfredson: When you back up who we are, many people may look at us and say, oh, they’re a retailer. We are a place where individuals and people can come to get moving, stay active and live healthy. The way we do that is by selling running shoes, walking shoes. We custom-make insoles for you. We have fitness apparel, running apparel, walking apparel. We have a whole pain solution center in one of our stores to make sure that all the people have different needs so that they can continue to do that every single day, get moving, stay active and live healthy.

On founding the business from a garage 40 years ago

Sam Reese: Love that mission, and I know you guys have an incredible online presence, but to go into one of your stores is a blast, especially for some former runner heads like me. It’s just a blast. It’s such a great experience the way you have so much technology weaved into it. Now, the company was founded by your dad back in 1983. Those were my college years. I know your dad had three kids, another one on the way, so he started a business in the garage. What was that like? Do you remember those early years with your dad starting the business? What was it all about and what was he trying to create?

Mike Gotfredson: Yeah, it was 1983. You’re exactly right, Sam. He had three kids with the fourth on the way and all under the age of five years old. So for him, it was really a passion of his[, which] was marketing and business. It wasn’t running, it was more on the direct marketing side. In 1983, he saw an opportunity to go out there and sell running shoes through a mail-order catalog, which at the time was very unique, very different. Everybody just went into their local running store to pick up their shoes.

Sam Reese: That’s interesting. He found it not because he was a runner, he found it because he saw a niche in the market for what his expertise was, which you said was marketing, and did he have an online marketing or that was not even around at the time? No.

Mike Gotfredson: Not even around in 1983 it was a pure direct marketing magazine.

Sam Reese: Yeah, magazines.

Personalized marketing based on customer preferences

Mike Gotfredson: Catalogs, catalogs. At one point in time, Sam, we were sending out over 25 million catalogs a year based on your buying habits, your preference, what brand you like, how much you were running, how much you were telling us you were running, and we had a call center. We had a big call center, over a hundred team members taking calls on a daily basis, selling you and helping you get into the perfect fitting shoe.

Sam Reese: I remember those days. I ran a big office, products companies way back in those days here, and it was the same thing. Send out the big catalog, wait for the orders to come in. Of course, the internet changed everything with that. When you were with the business here or when you were young, you worked in the business a little bit, didn’t you? What kind of stuff did you do when you were young? We’ll get into your college life and professional career, but what kind of stuff did you do and what was it like working in a family business?

Discipline, passion and determination

Mike Gotfredson: Each family business is a little different. I worked in the retail store. I worked in the warehouse as a kid growing up, packing, shipping, doing all the manual labor stuff that’s so important to the backend of a retail operation like Road Runner Sports. What I saw and perceived as a kid growing up and watching my dad, who we lovingly call Chief Runner here around the office. By the way, what I saw from Chief Runner was a drive and a passion and an energy that nothing was going to get in his way. So determined and so disciplined every single day. He was trying to grow the business, provide for the family, and it wasn’t that easy. I really learned the true value of sacrifice, the way that he sacrificed for the family and for the business to try to make it go.

Sam Reese: I love to hear that. Well, I know he must have had a big impression on you. When I hear things like hard work and sacrifice, and then I see your background … you were a great athlete yourself. You had a career at Michigan. Know that when I saw you won the Steve Grody Hustle Award, I mean those are the best Michigan teams of all time. Ricky Green, Phil Hubbard, but what a competitor you must have been. So to see that and then put it into your athletic, the athletic background you had, tell me how that shaped you for the career you have right now, your athletics, what you learned in that sport, and who was your coach, by the way, and what’d you learn from him?

Lessons from college basketball coaches

Mike Gotfredson: My coach at the time, I played for Brian Ellerbe and I played for Tommy Amaker. From both coaches, I learned what it took to be at the very top. To be a head coach, you had to be so organized, you had to be so detail-oriented, and you had to have a real passion for what you did. When I was 12 years old, I had a major arm issue, an injury, and I actually ripped my brachial artery going through a glass window and the doctors told me I’d never be able to use my arm again. They were talking of amputation when I was in the hospital the day it happened, losing two liters of blood, almost thinking you’re going to die when you’re 12 years old. Going through that experience, it taught me a mantra that I’ve lived with since that time, which is no regrets.

Sam Reese: That’s a great mantra.

Mike Gotfredson: No regrets. You got to go for everything you’re going for with that drive, that determination. My most accomplished thing when I look back at Michigan and basketball, it wasn’t making the team, which was a huge reach for me. I’m [5-foot-11], I can’t really shoot, I’m not that fast, but those Steve Grody Hustle Award winners that I would win at the end of the year. That was so important to me. That was a special time for me to say, I put in the effort. I’ve worked hard and there’s a little reward at the end.

Joining the family business with a series of one-year contracts

Sam Reese: Now you leave Michigan. Yes. And you don’t go to work for Road Runner. You go off on your own and work for some other companies. I think Marsh McLennan [and] AOL. Tell us what happens right when you leave college and what you decide you’re going to pursue.

Mike Gotfredson: I went to Chicago, I mentioned to you I wanted to put some of that competitiveness into business. Worked there for a while, got my MBA. After about seven years, Chief Runner actually came to me and he said, “Hey, I’ve got this opportunity at Road Runner. Would you like to come and try to help us grow?” And it was around the e-commerce aspect of our business. And at the time I had some e-commerce background from AOL. And what was interesting, Sam, is that I had a one-year contract, a one-year contract. I had specific goals, KPIs. It wasn’t one of these things where I was just going to come to Road Runner Sports and rotate through departments. I was coming there to hit goals and objectives and at the end of the one-page document it said, and if it doesn’t work out, we will part ways, but we will still love each other as father and son.

Sam Reese: But we’ll part ways as employee and boss, huh?

Mike Gotfredson: Absolutely. If the goals and objectives weren’t hit, Hey, if I’m not hitting the objectives, I would want to part ways. What am I not doing? Why am I not achieving the results? And I had a one-page contract for the first seven years at Road Runner Sports.

Sam Reese: That’s really different. And what kind of other roles have you done in the company in your career? So start off on the e-commerce side. What other things have you been involved in?

Importance of ‘shaking customer’s hands’

Mike Gotfredson: Yeah, I started out the two big things, Sam, for me starting out on the e-commerce side and really helping that grow and develop. And then I really migrated over to the retail side. So when I came here in 2007, 2008, we only had 12 stores. We now have 47 stores across the country growing the retail side, being in the communities, I like to call it, we’d like to “shake the customer’s hands.” And if we can do that in the communities, in our stores, that really helps Road Runner Sports over the long term.

Sam Reese: Tell me more about that. “Shake the customer’s hands.” If I was one of your employees and you were explaining that to me, tell me more about what that means.

Mike Gotfredson: Yeah, we have over 750 team members across the country. We feel they are the best trained, they’re the most outgoing. They give the wow experience in our retail store. Everyone said when Amazon came out strong, of course in the early 2000, late 90s, they’re going to put everybody out of business. All brick and mortar is going to go away. Well, we had a little different feeling about that. We felt that with our in-store experience, the technology we use, the way we mold the insoles, the way we customize the fitting to your specific feet, we felt that we had an advantage. And so, we like to get customers into the stores versus just doing an online transaction.

Sam Reese: That makes sense because it is a great experience. And when I think about that, that’s what really is unique about the experience when you go into the stores is the way that you custom fit everybody. Anybody that’s been there, most people walk out with the orthotics. I mean, I love them. I’ve got ’em in all places that I’m at. Have a couple for each shoe. When did you decide that was going to be an advantage for you guys to take that custom approach to shake the customer’s hand? How did that come about?

Using Technology to Customize Products

Mike Gotfredson: It goes back to the training and development we did on the phones. So when you were a fit expert on the phone team, we really helped train you, educate you on the best way to help that customer get into the right shoe. And then, so when we opened up our retail stores, we felt, well, some of that same training and development can be replicated in the retail environment. And then we took it to the next level, Sam, with our 3D scanner, we brought technology into it. Every single one of our fit experts in our stores has an iPad. We greet you with an iPad that has your entire history of shopping at Road Runner Sports right there on the iPad.

Keeping a list of top 10 pain points to resolve

Sam Reese: I know one of the things you talk about in your leadership is you talk about over-communicating with your people and you actually keep a top 10 list. Tell me about that top 10 list.

Mike Gotfredson: With all the different departments. We have a finance team, merchandise team, just like many companies. So when I go talk to the leader of our merchandise team, I can say, “What’s on your top 10 list?” And they pull it out, we can review it quickly and I can look at that top 10 list and say, “Alright, what’s number one and number two, how can I help support you on those items? Let’s cross those off the list this month or in the next two months.” And we put a timetable next to each one of those top 10 items. So that way each department I go into, I know exactly where their pain points are, I know exactly what the timeline is that we’re going to achieve and solve those pain points. And then what’s great about it, Sam, is those top 10 items come from the team members themselves. It’s not us as leaders putting those together. It’s team meetings that they have. They’re bubbling up. Every single one of our team members across the country knows what their top 10 list [is] within their department.

Sam Reese: How did you initiate that? What was the catalyst for that? That’s a great idea.

Mike Gotfredson: I think it just came about because as I was talking to our different leaders, I wanted all of us to get organized around what our big pain points were and that way we could prioritize them. So I was hearing from this department, “I’ve got big issues” here. I was hearing from this department, “We’ve got some issues we want to get better at” here. I said, we said, “Well, let’s put ’em all together so we can look at it as a group and understand where our priorities lie.”

Sam Reese: How would you define your leadership style now? I think when we hear that top 10 list, I’m imagining you back at Michigan diving for loose balls. You are definitely a detailed guy. I can tell that. Could you just give us a little bit more about your leadership style?

Mike Gotfredson: We’re going to be hands-on the main thing we are here to do. We are not here to dictate orders. We are not here to slam a roadmap down your face in terms of how you need to get things done. We are here for one simple purpose. It is to help and support you get better at your job. That’s it. If a team member — I don’t care if you started two months ago and you send me an email about something that needs to improve in your store, that’s going to get on one of the lists to see if it makes it to a top 10. So we are tracking and measuring everything that we’re doing here as a team to make sure we are executing at the highest level.

Sam Reese: Where do you spend most of your time? I mean, I know I talk to a lot of CEOs. I’m a CEO myself and, sometimes, I find myself really focused in the right places. Sometimes, I find myself missing some key areas. What about you? How do you think about where you spend your time?

Mike Gotfredson: I would say the most majority of my time is with our stores, in our stores, with our store team, with our store leaders. Every Tuesday morning we have a nationwide retail leadership call from 8:30 to 9:15 AM we’re talking about how we can improve in the retail side of the business. It’s definitely more focused on the retail side and how we can help support and get them to grow.

Expanding customer base

Sam Reese: As I’ve researched you and I hear the things you have to say, it’s just so interesting that so much of your value proposition comes down to comfort and pain relief. Is that what happens when people walk in and are looking for a pair of shoes? Are those the kind of things you hear as I’m in pain and I want to keep active?

Mike Gotfredson: We have a whole pain solution center within our stores and I think for us, if you walked into one of our stores today, we are definitely catering to the running community. There’s no doubt about it, but what we’re also seeing is we’re catering to the mom who just walks her dog but has knee pain. We’re catering to the individual who feels hip pain or his arches hurting him and they just need more support. We are helping people solve their pain issues in addition to the running community, and it’s really broadened our reach and expanded who’s walking into our retail stores.

Sam Reese: I just love the way you talked about your mission inspiring and helping people to get moving, stay active and live healthy. I see how that all connects. Like when you’re not feeling good, you can’t get out and about here, so it just connects with your value proposition

Future of Road Runner

Sam Reese: What is the future for Road Runner? When you’re talking 10 years from now, what’s going on with Road Runner Sports 10 years from now, do you think?

Mike Gotfredson: We would love to have more retail stores. So first of all, we talk about [how] we want to be in more communities. We feel when we get in the community, we can entrench in the community. We develop great partnerships in the communities we’re in. We have relationships with high schools. We develop relationships with local races, local schools, local charities. We signed up over 300,000 new VIP members last year, and the way we talk about that here is that’s 300,000 more people we’ve added to the family that we can help and inspire to get moving, stay active and live healthy.

Sam Reese: Terrific. When you think about that big vision that you’re painting, how does technology fit into that? It seems like that’s a big opportunity for you guys where you guys have actually been able to win in so many areas. What does technology do to the future for you?

Mike Gotfredson: To the outside world, we’re a running and walking company, but inside here we are really a high-tech database company, so we’re a high-tech database marketing company that happens to sell running shoes. We’re really keen on how we’re driving that technology on the back end, how we’re using it in our stores, and also how we’re segmenting and making sure that you’re getting a custom message from us as a customer based on your brand preference when you last ran or bought with us, how often you’re running. All of that stuff goes into the data and technology that we’re keeping updated on the back end to make sure you get that customized experience.

Sam Reese: That’s got to be a big trend in your industry, isn’t it, in retail, to have that personalization everywhere you go, that has to be something that you guys are striving to have as an advantage.

Mike Gotfredson: Yeah, it’s huge. It’s a big investment, Sam, so we have no outside partners. We have no outside investors, so we’re doing it all home-growing. We own the company 100%. For us, it’s about how do we make the right investment in the right technology because there’s a lot out there.

Sam Reese: When you grow up in the business and all the details like you do, you know all of the moving parts. How do you stay strategic at the same time? How do you stay above it when if somebody comes up to you and says there’s an inventory management problem, you probably know exactly what that looks like and you’ve dealt with it yourself. How do you stay strategic and stay above it?

Mike Gotfredson: We’ve done a pretty good job of creating team members and a subunit. That’s all they’re thinking about is a strategy component of Road Runner Sports, so I think every probably call it four to five months, we’re getting together with our strategy team, we’re getting offsite, we’re removing that day-to-day of everything that’s happening with the business and we’re trying to think where’s the trends three, four or five years from now, having those discussions. So it’s been building for many years. We’ve had this process and I do think it helps us get out of the day-to-day and really think bigger picture. That strategy team has been a game-changer for us.

Sam Reese: Love that idea. So that’s what an agenda kind of looks like. We’re offsite every four or five months and it’s going to be that high level of an agenda. What are the biggest trends? How are we competing those trends? What are the things that we should be aware of? That’s what the day feels like.

Mike Gotfredson: Yeah, a hundred percent. And then what we’re doing that I think is really important that we see, I see it in Vistage, I see it in other areas as well. We make sure we’re tracking, so when we come out of strategy, we are constantly updating the director team, the entire Road Runner Sports team, Hey, here were our strategic initiatives coming out of our strategy session last week. How are we doing against those objectives? Are they green, are they yellow or are they red? Very simple. And so as the year progresses, everybody knows where we stand on our strategic vision for the future.

Sam Reese: Where did you learn that, Mike? The green, yellow, red, all the over-communicating. Where did that come from?

Mike Gotfredson: That was the Alan Mulally book I read around Ford. We have three or four big KPI reports, key performance indicator reports that we color code green, yellow or red. Very simple. The team knows it. We know how to track it, and it’s really helpful for the organization.

Sam Reese: When I think about your Vistage experience, how long have you been a Vistage member?

Mike Gotfredson: It would’ve been probably around 2010 in the Key group.

Sam Reese: You started in the Key group. Great. And you’re with one of our legendary Chairs, Richard Carr, who’s just an amazing person here. We were joking before. The name of our boardroom is [the] Richard Carr Boardroom. Tell us about how that experience has been in terms of with your Vistage experience, how these other CEOs have helped each other and how you’ve helped them. I’m just wondering [about] your feeling for that whole experience.

Mike Gotfredson: I always love to be challenged. If I’m sitting in the room and we’re the biggest company or I’m sitting in a Vistage group and they’re asking me about how Road Runner Sports does things and giving examples, that’s great, but I want to be the smallest company in the room. I want to be the company that has the biggest opportunity for growth and learn from other people in the room, and Vistage has been fantastic at that. I’ve just made some great friends, great relationships, and most importantly Sam, I felt I’ve been challenged, “Hey, you think you’re doing great at Road Runner? Hey, you could actually be doing better.” You think you’re doing something awesome? Hey, there’s actually another level you could get to. That’s what I love about Vistage and the challenge to improve your company year after year after year.

Ensuring a culture of constant improvement

Sam Reese: We always ask this of our leaders, we get a chance to spend time with. What are some of the big things you’re working on as a leader? When you think about where you’re really to improve in your climb to even get better and more effective, what are some of the things on your mind?

Mike Gotfredson: My biggest thing when I wake up in the morning is, “Am I doing enough? Am I communicating enough? Am I having the right ones? One-on-ones enough? Am I supporting the team enough?” The biggest thing I continue to work on is getting feedback. Hey, if we have 550 fit experts across the country, I need to constantly hear, “How are we doing with our culture in their store? What more can we be doing to serve them, to improve their jobs?” That’s the biggest thing I continue to work on is, “How can I gather feedback from across the country and really disseminate that into actionable items to make the entire company better.”

Sam Reese: Tell me about what you were faced with during the pandemic, how your business responded, and then maybe what you’ve learned that you’ve carried forward.

Mike Gotfredson: The pandemic was very interesting. Retail especially was hit hard and I go back to the pandemic, and I think about the first meeting we had and we talked about Road Runner Sports being different, being able to move in an agile and a fast way. The very next day, we were talking about how we could rent 100 U-Haul trucks to drive around the country to pick up inventory at our stores and deliver it to customers ourselves.

Sam Reese: Wow.

Mike Gotfredson: That’s what we were thinking about the next day. Hey, how can we do that? How can we still deliver the packages to the customers? So for us, it was really hard. Eventually, we didn’t rent the U-Haul. We did have to shut our stores down for a long time, but what we realized [is that] the e-commerce business took off for us. What we saw is that people shifted, and I still think it’s here today, and I don’t think it’s going anywhere in the future. People took a second look at, “How are they living every day? Are they getting that 30 minutes of exercise? Are they just walking around the block? Are they eating a little healthier?”

I think with the health scare like [COVID-19] was, everybody just took an internal look about how they could up their game with their lifestyle, their healthy eating, everything like that. So we definitely learned that there was an opportunity to continue to partner with people in that healthy lifestyle arena.

Sam Reese: That’s a great macro trend, isn’t it? That’s so interesting that you see that from that level here, that people are taking better care of themselves and that translates into good news for you guys and aligns with your mission, I guess, perfectly right?

Mike Gotfredson: Yeah, it did, and we never want to go through another situation like COVID was. Absolutely not. We eventually opened up our stores back again and, today, I just think it made all of our team members appreciate coming into work every day knowing that this is a company that’s been around for 41 years. You hope you never take that for granted, and when it was all shut down, there was some real scary times, and so to look back and see how we persevered and pushed through, it’s really something that all of us here are pretty proud of.

Sam Reese: Do you feel like a stronger company now?

Mike Gotfredson: Absolutely. We’re way more connected [with] the way we had to communicate with our East coast teams, our West Coast teams. We’ve taken a lot of that and we use that today in how we’re connected and communicating out across the company.

The pace of business and decision-making

Sam Reese: That’s so inspiring to hear. I heard you on a podcast and you said something that really jumped out at me. The gentleman asked a question and you said that you feel like, and you said this in a good way, you said that you feel like things have sort of slowed down in your mind for good, meaning that you could be more strategic, more balanced in life. Tell us a little bit about how that happened and where that realization came from.

Mike Gotfredson: Back to a sports analogy, you hear a lot of athletes as they continue to play, they get more mature in their process of playing more years in a sport. The sport slows down. I definitely saw that in my basketball playing days every single day. I’m making, let’s say between 30 to 40 decisions rapidly. And so, now after 16 years at Road Runner Sports, the decisions, the process, the flow just seems to slow down a little bit. You get more deliberate with your responses. You’re in tune more with how your action is going to impact the company, and so I think I’ve just seen that over the years and it’s getting more fun too. So both of those things, it’s slowing down and getting more fun has really been something that’s been special for me here.

Seeing a way around boundaries

Sam Reese: Let me ask you a closing question. When you think about the secret to your success, and I know you’re a humble guy, but if you look back and think about some of the key points that have really helped you get to this point in life right now, what are some of the secrets you feel to your success that are going to continue to propel you forward?

Mike Gotfredson: In a family business, one thing that’s been successful for me and Chief Runner working in partnership is to have a gratitude and respect for the business that he initially built. And it all comes back to the one founding principle for me is that I have a ton of respect for what he built, what he sacrificed, and I’m just humbled to be a second-generation part of that and try to help it grow.

That’s the way I think about it. I’m a servant leader who’s trying to help this company grow and very grateful for the opportunity, and I think what I saw from Chief Runner for all the entrepreneurs that are trying to go through it was an absolute passion and never taking no as an answer. That’s something that he ingrained in us from the very beginning, and I hope we continue to take forward at Road Runner Sports, is that we are going to push the limits, we’re going to push the boundaries, we’re going to do it the right way, but that we’re not going to see obstacles and barriers as a way to say we can’t do it. We’re just going to find a way around it and push through and make Road Runner Sports a better company.

Sam Reese: What a blast spending time with you, Mike, president of Road Runner Sports, it’s just great to hear your story and thanks for spending time with us today.

Mike Gotfredson: Thank you, Sam, I appreciate it. Great to be with you.

Sam Reese: Thanks for joining us for this edition of a Life of Climb podcast, friendly reminder to please subscribe or follow the podcast to get all the latest episodes, and please visit vistage.com for more resources to support you on your leadership journey.

0 views