EPISODE 5: Business in the time of COVID
[INTRODUCTION]
[00:00:20] KK: Welcome to Risky Business. We are back. This is episode five, and I'm Kathy Kaehler and –
[00:00:26] BL: I'm Bliss Landon, your insurance specialist or expert. What am I?
[00:00:31] KK: You are an expert. Okay, let's just – That is it.
[00:00:33] BL: All right.
[00:00:33] KK: You are the expert. Well, speaking of experts, we are excited. We have a very special guest who is here with us today and we're going to cover a lot of, I mean, just I think the very, very just underneath what you want to know about sales and school districts and school devices and just really the ins and outs.
[00:01:00] BL: Challenges and obstacles.
[00:01:02] KK: Right. Things that you would not be thinking about but all of a sudden, you're like, “Whoa, I want to know about that.”
[00:01:09] BL: Absolutely.
[00:01:10] KK: So we have Matt Morelli. Welcome.
[00:01:14] MM: Hello. Thanks for having me.
[00:01:16] KK: You're the Director of Business Development.
[00:01:19] MM: That's right.
[00:01:20] KK: Wow.
[00:01:22] BL: He's important.
[00:01:23] KK: Big time.
[00:01:23] MM: A little bit.
[00:01:24] KK: Big time.
[00:01:25] BL: Very important. He has a lot of responsibility at School Device Coverage. He does an awesome job. He runs our sales team. He is really in charge of marketing and social media. He wears many hats and he's done an amazing job.
[00:01:40] KK: This is kind of part of it, this podcast.
[00:01:43] BL: Yeah. He’s really coming up with this kind of idea to have just more content on these subjects and bring experts in to kind of really shed the light on just these topics that we've been covering so far up until this episode. But we wanted to bring you in because, one, this was your idea. But also your experience from both prior to the pandemic and the differences between what you're seeing in the business. So, yeah, welcome.
[00:02:19] MM: Thank you for having me.
[00:02:22] BL: So one thing that we were talking about before we went on the air is we were talking about just how things are really different this year versus last year. Just maybe explain just how – I don't know. You can pick sales or marketing or any of it or all of the above and just how things are really different from last year to this year because of the pandemic and what you've seen out there and what's become important, what's not important, what challenges the districts have faced. All of the above.
[00:02:59] MM: What has changed greatly, at least from what we're seeing, is I guess the buying season for getting devices, for getting insurance. It was cyclical in previous years, right? So we would go through Q1 and Q2, and we’re just kind of talking to districts. But there's not a lot of traction, and nothing's really happening. We would hit Q3 or kind of midway through August, and all of a sudden we get that explosive incoming messages and calls from districts who need coverage, and they need to get insurance for their devices, and it all has to happen kind of at once.
Typically, what happens, at least as I understand it, is school districts will not really know how many devices they're going to need or how many students they're even going to have until maybe a month before school starts. So that's why we would always get barraged at that time.
[00:03:58] KK: Is that like August?
[00:03:59] BL: Yeah, when school starts.
[00:04:00] KK: Or July?
[00:04:00] BL: So like August, September. Yeah.
[00:04:02] MM: Yeah, pretty much. We'll be looking at schools and seeing they're going to start on August 8, and it's the end of July, and we haven't gotten an answer from them, and they’re still kind of up in the air. Then all of a sudden, school starts in a week. We need insurance, so we get really, really busy. It changed last year, obviously, with COVID, right? So March came around, and they started talking about closing schools. Then they started closing schools and sending kids home. Districts that had a one-to-one program in place already fared relatively well, right? So they already had the devices. They just sent them home with the kids, and it was kind of easy.
A lot of school districts did not have a full one-to-one program in place. They would have one device that would be shared with multiple students throughout the day with state school and a charging cart. So then it became what do we do? Unfortunately, there's a huge digital divide that we talk about all the time, right? You'll have kids that maybe have a little bit more means and a little more access to devices at home and then kids that unfortunately don't. When COVID happened and kids went home, there were a lot that just went without devices. They didn't have devices, so what started happening is districts started putting in orders with the OEM manufacturers out there. They got overwhelmed with orders. COVID slowed down the production of the actual parts that go into making these computers. Getting them shipped overseas slowed down because –
[00:05:45] KK: They closed our borders.
[00:05:46] MM: Yeah. They closed the borders and shipping.
[00:05:46] KK: Totally, yeah. Nothing's coming in or out, right?
[00:05:49] MM: Exactly. So now you've got a bunch of kids that were just sitting there stuck. We kind of sat there watching what was happening. We did see a big increase in communication from districts who were looking for device coverage, and so we helped them out. Unfortunately, we were in communication with I don't even know how many districts that were just kind of sitting, waiting for devices to show up.
[00:06:22] BL: Somewhere we're still waiting for their devices to show up.
[00:06:23] MM: Yeah, a lot of them.
[00:06:24] BL: And they ordered them last year.
[00:06:25] MM: A lot of them were.
[00:06:26] KK: So what's happening for those kids? How are they learning anything?
[00:06:350] MM: They've been able to get devices, and it really is just a guess based on what we see. To probably most kids now, a lot of the devices aren't really up to snuff with what's needed. A lot of districts are waiting on the newer ones to show up, so they can get rid of the old ones but –
[00:06:56] BL: I'm sure they're relying on the old ways of going to school where they have a book, and then they have homework assignments, and they have to actually do physical homework assignments out of the book and print pages from the computer and fill those out and turn them in. It's an email process, which most people have access to or their parents would. But maybe they're not actually on Zoom in a classroom setting on a device because they don't have one to use. Or they're on their parents’ maybe. Or they just don't have it, and it’s paper. It's old school, old. Yeah.
[00:07:29] MM: It’s a mix. It's a mix.
[00:07:31] KK: We really don't think about that aspect. We hear the news, and it's all about kids are at home. They’re doing their classroom. They're on a Zoom call. It really ends there, and I'm very much enlightened by this because it takes it down another layer of, “Okay, let's unpack it.” Like you were saying, do kids actually have an actual device that they can use?
[00:07:57] BL: And do they have connectivity to the Internet?
[00:07:59] KK: And connectivity.
[00:08:00] BL: Yeah. A lot of them don't. But then what started to happen was we got the CARES Act money, right? So that started playing into things where the schools that couldn't afford, and there were schools that couldn't afford to provide devices to their kids. So now all of a sudden, there's funds available, and that got things rolling too. Wouldn’t you say, Matt?
[00:08:20] MM: Yeah, it definitely did. It made access to devices a little bit easier, access to protection for the devices a little bit easier. But districts were still running into the problem of there's just not enough devices. That is seemingly starting to change a little bit. We're in contact with a lot of device retailers, major device retailers who work with school districts. They are starting to receive the devices and get them out to the districts. We've got a district here in Southern California, a large district that is about to receive their devices, which is great for those kids. But it has been really, really tough. It’s been really tough.
[00:09:02] BL: When you also say, Matt, that we're kind of switching from a school year policy to an annual policy because now the devices are coming in, and we're going to insure them for two months, that's kind of ridiculous. How do you come up with the rate for that, right? So maybe they'll buy a short-term policy till the end of summer, and then we'll start them off again in the fall. But also, a lot of districts are saying, “Hey. Okay, we got these devices, and now we need you to cover us for a year because we're not fully back to school.” My son has a choice. He can either go back to school or stay home. He can do either one. So if they decide to stay home, they're going to still need their device at home.
[00:09:48] KK: Of course.
[00:09:48] MM: Yeah.
[00:09:49] BL: But anyway, it's switched. I think that has changed business-wise, as far as what kind of policy we're selling. It's not a school year policy anymore. It's an annual policy.
[00:10:01] MM: Yeah. There used to be – A lot of districts would take the devices back at the end of the school year and house them there. It seems like most districts that we’re talking to, the kids are keeping them over summer. So they're getting them as a freshman and they're probably going to keep them until the –
[00:10:18] KK: All the way through.
[00:10:19] MM: Yeah, pretty much. There are a lot of districts that will. They'll buy every year. They'll buy new devices for freshmen and they'll turn them in at the end of their senior year, that same device.
[00:10:29] KK: Right. A lot happened.
[00:10:35] MM: A ton, yeah.
[00:10:35] KK: A lot happened.
[00:10:36] BL: A ton.
[00:10:36] MM: A lot of change. A lot of change.
[00:10:38] KK: That's really incredible.
[00:10:40] BL: Do you find that the manufacturers are having trouble still? It goes to supply and demand, right? I mean, what's happening now because it was becoming popular anyway to have a device. Then COVID upped the ante where it really increased the amount of devices that everybody needed. But now with what's still happening, there's even more demand for devices, right?
[00:11:13] MM: Well, yeah. It’s one of those things where I don't think there were any schools or school districts out there that were just, “We’re not going to do one-to-one. We'll never do one-to-one, right?” So it was on everybody's mind, and most districts had – Like I said, they begun with one device that was going to be shared with three students throughout the day, and they would kind of evolve to one-to-one over there. Nowadays –
[00:11:34] BL: But you can’t do that. We have social distance if I’m going to share a device with anybody.
[00:11:37] MM: Yeah, exactly. In 2021, it's one-to-one and it's going to be every school district because that kind of proof of concept of why it's needed happened last year. So I don't think there's going to be many schools at all that are not going to move toward it. It just doesn't make sense.
[00:11:54] BL: But back to the manufacturers, don't you think that they're having a hard time keeping up with the orders? That's going to be a little bit tough. Yeah.
[00:12:00] MM: They’ve got to be. Their production slowed down, so just the parts that make the machines. There was probably a couple months I would assume where production either stopped or just went to the floor. So even with that ramp up back, it's going to take time to get used to it, myself there.
[00:12:18] KK: Are you involved in that just awareness of the need does, or is it the school districts that go to these manufacturers and put in their order? Or are you – Is School Device Coverage part of that?
[00:12:35] MM: Not on the device ordering. But, I mean, we maintain relationships with organizations that provide those devices, right? So the in between.
[00:12:44] KK: The let you know.
[00:12:47] MM: We work with manufacturers sometimes as well. Yeah.
[00:12:52] BL: That seems to be something that's starting to happen quite a bit. This goes back to an episode that we did before on insurance versus warranty. I think the manufacturers are seeing the need for a full comprehensive insurance product to go with the devices because that's what the schools want. So it's trending in that direction, too. We are getting calls from manufacturers wanting to sell our insurance or not sell it but offer the insurance as part of a package to do like a bundle pricing to the school. That’s become kind of popular too, don't you think?
[00:13:25] MM: Yeah.
[00:13:26] BL: They're changing also. Everybody's changing.
[00:13:28] MM: Everybody is.
[00:13:29] BL: The whole space is changing.
[00:13:30] MM: Yeah, and it's around making it easier for the districts. Obviously, we work with a lot of technology directors. Sometimes, they like to kind of unload on us all the stresses of their day, right? It’s not just I need a device for this kid. Device needs to be working. It needs to stay working. The telephone systems need to work. All the AV stuff needs to work, so they're busy. So when we're kind of incorporating ourselves with either an OEM manufacturer or another retailer to just give them, “Look, here's your package. Here's the price.” It's the device. It's a case. It's insurance. It's just one easy thing they can take care of. So it is getting popular. It is getting very popular to just bundle everything up, and here you go. Here's your total solution.
[00:14:18] BL: Then we have a nut case, a case company, and some other case companies that want to partner with us. So then you're really – It just becomes this whole package deal for the school district which makes it easier. It’s a one-stop shop. They get everything they need. Boom, we’re done.
[00:14:34] KK: It's also very seamless then for the parent. I think that's the other thing. That's the last thing you want as a parent to not have to deal with, “What do I got to do here?” It's enough like you're dealing when like your TV doesn't work, and you're like, “Who do I call?” But, right? When you get into technology, it's daunting.
[00:14:54] BL: Yeah. Definitely.
[00:14:55] KK: So having these seamless relationships and processes is really convenient.
[00:15:03] MM: Yeah. Our goal is just make it easier. I was 12 once. If you put an iPad in my hand, I would have broken it.
[00:15:14] KK: For sure.
[00:15:15] MM: Right. I’m 41 now and I'll probably still break one if you give it to me. But that's the goal, right? We're putting these expensive devices in the hands of kids. They're going to break. They're going to malfunction. They're going to get lost. They're going to get stolen. So that kind of one easy way of taking care of everything has just gotten wildly popular over the last 10 months, 12 months.
[00:15:42] KK: It's really incredible. It really is. When we think of our kids, I mean, my thing was you are not going to have a cell phone until you are in eighth grade. That's it. Now, they have friends. They got cell phones in seventh grade, sixth grade. But now they’re –
[00:15:56] BL: They're getting younger and younger and younger. Yeah.
[00:15:59] KK: And they're getting a tablet or computer, even bigger, even more expensive.
[00:16:03] BL: Exactly, exactly.
[00:16:04] KK: In some cases. But, yeah, it's a learning curve that we are experiencing as all of these industries change. But School Device Coverage is really an important feature to all of this, a component that I think why we're doing this show is to inform educators and parents that this is here, this is here to stay, and this is how you can really make the experience much more pleasant when things don't work correctly.
[00:16:44] MM: Exactly. Exactly. That’s the goal.
[00:16:48] KK: What do you see coming as this “school year” is – Let’s just face it. It's coming to an end typically, right? We're done in May, some June.
[00:16:58] BL: May, middle of June. Yeah.
[00:17:00] KK: What do you see come this next year? I know we've touched on a few topics, but kind of do you anticipate more? We were talking to somebody in claims just about how the increase of damage is looking like that. Do you see more and more districts getting this insurance?
[00:17:26] MM: Without a doubt.
[00:17:29] KK: How does that – I mean, do you go out and cold call these school districts? Or is it something that they reach out like, “Hey, I heard this happening. I don't want to get involved.”
[00:17:41] MM: It's both. What immediately came to mind when you started asking that question is what do we see that's going to be different this year is a more informed buyer, right? The technology directors who really this last year was their crucible, they went through it. I'm sure everything that could go wrong went wrong. I'm sure the majority of them found their way through it, and so now people really know what they're doing with one-to-one. I expect this year and in the coming years, the directors who we're working with are going to just be that much more knowledgeable about their own needs, about their program, and about really how they want to run things, how they want to deploy the devices to students, how they want to manage them, how the instructors and the teachers want to teach using them, right? That's all getting better, which is fantastic.
For us, our perspective of selling the insurance that we sell, I think that the discussions that we have are going to be more kind of right to the point. Here's where we need assistance, here's the pain that we're having, and here's how hopefully you can fix it for us. Then obviously, we'll do our best to do that. So I expect the discussions that we have this year and moving into next year to be really a lot more interesting. One of the things that we like to do upstairs is if somebody gets off of a phone call with a district, and it's one of those really good long conversations, we'll have a powwow and just kind of talk about what did they say, what has their experience been so that we're more aware from the sales perspective, and we can hear kind of those same pain points that everybody shares and be better at addressing them and knowing how to kind of solve those problems.
Again, coming out of COVID where every problem that could happen happened, I think that I'm kind of excited. I’m excited to have these discussions and learn how these technology directors overcame those issues so that we can kind of say that to the people who we're talking to who are having the same ones at that time, so it'll be interesting.
[00:20:15] BL: Yeah. We plan to interview some tech directors.
[00:20:20] KK: I was going to say. Tech director actually itself is such an interesting topic. Going back to school, there was the principal, the vice principal, the athletic director, and then your teachers.
[00:20:32] BL: There were no tech directors.
[00:20:34] KK: No tech director.
[00:20:36] MM: Good point.
[00:20:37] KK: That an actual job. That's an actual position.
[00:20:39] BL: A big job. Yeah.
[00:20:41] KK: That's – I'm sure this is now on the radar because of this year. People who are very interested in education, there's a position now that has to be present in these schools.
[00:21:01] MM: I kind of want to say, in 2020, during COVID, tech directors kind of saved education.
[00:21:09] BL: Yeah. I –
[00:21:10] MM: They kind of saved education.
[00:21:11] BL: Absolutely, they did.
[00:21:13] KK: Right, I would agree.
[00:21:14] BL: Yeah.
[00:21:15] MM: It’s funny. That's something I haven't thought about before, but it’s kind of a big deal.
[00:21:18] BL: But it’s so true. It’s a huge deal.
[00:21:21] MM: I think it’s kind of a big deal.
[00:21:22] KK: It’s a big deal.
[00:21:24] MM: So, yeah, if there are any tech directors listening, thank you.
[00:21:28] BL: Absolutely.
[00:21:29] MM: You guys –
[00:21:30] KK: Please email us.
[00:21:31] MM: Yeah.
[00:21:31] KK: You guys rock.
[00:21:32] MM: Yeah. You guys are the heroes.
[00:21:33] KK: We’ll just say we'd love to chat.
[00:21:35] BL: Absolutely. Kathy asked how we get our business. I know that I'll ask you, but there's many ways that we get business. You can touch on some of those.
[00:21:48] MM: We're kind of all over the place. Social media, right? So we're obviously running ads and reading articles and sharing articles and talking with tech directors online. We do PR blitzes on a podcast every week it seems, doing PR. We obviously called districts. We email districts. We send letters to directors of technology at districts.
[00:22:18] BL: Or done some trade shows where we're making some connections that way, which have been really great there. So we used to do a lot of trade shows, especially on the UPIC side, but we started doing it on the school device side as well. They're usually in person, and that has completely changed. It's all virtual now but it actually works better does, right?
[00:22:38] MM: It does. It does. Yeah.
[00:22:39] BL: Because it’s almost – This one that we're starting on Sunday, what's it called again?
[00:22:46] MM: RTM.
[00:22:47] BL: RTM. What they do – It's like Matt compared it to a dating site. You flip through who's going to be available to talk to and you go, “Yeah, I want to talk to them.” Then they go back and go, “Yeah, we want to talk to them too.” We set up these meetings with really great-sized districts and we're very excited about the opportunities. We may not have gotten them at a –
[00:23:13] KK: At a regular trade show where you just kind of walk in.
[00:23:15] BL: Yeah. Because maybe someone really wants to talk to you, but you're busy talking to somebody else. You’re like, “Oh, I'll catch them later,” and then something happens.
[00:23:21] KK: And you never do.
[00:23:22] MM: And never again.
[00:23:22] BL: Then you never see them again. So these virtual trade shows are really actually going really well, and we're very excited about it. Yeah.
[00:23:30] MM: Yeah, they are. I'll be honest. When the whole, “Hey, here's the 2020s trade show schedule,” came out, and everyone switched virtual, I just was kind of not interested.
[00:23:41] BL: You’re like, “Yeah, I don't know. I don’t think so.
[00:23:43] MM: Not interested. Then we bit the bullet and we did one. It was really cool. It's really cool. So, yeah, well, we'll keep doing those, and I kind of hope most shows stay virtual. I’m looking forward.
[00:23:56] BL: I know. Well, look at all the money you've saved by the travel expenses and losing people out of the office. Then it's draining. I did [inaudible 00:24:07] for so long, and it physically zaps you.
[00:24:10] KK: No, you’re dead the next week.
[00:24:13] MM: Totally.
[00:24:13] BL: Yeah. It takes you days to recover. So I hope they stay that way too. I mean, there's just some things that you hope stay virtual, just for the convenience and the less expensive situation to the company. I mean, it’s nice. You can use that money for other things.
[00:24:29] KK: We're in a time that our worlds are being recreated. Unfortunately, there's things that are dying out, where you had those trade shows. That has to be recreated into something else.
[00:24:43] BL: I’m sure all the big halls across the country are not happy with what I just said but –
[00:24:50] KK: But, look, change is good. It’s hard. Sometimes, we have to – As you said, we’re not looking forward to that first one, and now you're seeing that it has some positive, a lot of positive results. But anyway, listen. We have been thrilled to have you, Matt.
[00:25:09] MM: Thank you.
[00:25:09] KK: So very enlightening.
[00:25:11] BL: I want to mention too that Matt was in the military, so I want to thank him for his service.
[00:25:15] KK: Matt, thank you so much.
[00:25:17] MM: You’re welcome.
[00:25:17] KK: And a huge thank you.
[00:25:18] BL: He does an amazing job running the sales team, and I think a lot of his character traits and –
[00:25:26] KK: Leadership experiences.
[00:25:27] BL: Yeah. In leadership, he does an awesome job and –
[00:25:29] KK: It’s fantastic. Thank you.
[00:25:30] MM: I appreciate it a ton.
[00:25:32] BL: So he’s –
[00:25:33] KK: Matt Morelli.
[00:25:34] MM: That’s me.
[00:25:34] KK: Thank you. Thank you.
[00:25:35] BL: Thank you, Matt.
[00:25:35] MM: Thank you so much.
[00:25:37] BL: Thanks for coming on our show that you created.
[00:25:41] KK: I think also in bringing forward that tech director, acknowledgment is really exciting. Anyone out there who knows someone, or if you are a tech director, we’d love to hear from you. So please get in touch with us at riskybusiness@schooldevicecoverage.com. That's our email. Look for more episodes. We have many coming, and we're just super excited to be doing this and hopefully getting more and more information out there to you. Anyway, thank you for joining us, and we'll see you next time.
[00:26:21] BL: See you next time.
[END]