Eye to Eye?
Wouldn’t it be nice if there was someone you could call on at almost any hour of the day — even on weekends — to solve a serious operations crisis? Someone who was on top of the latest innovations who you could depend on for advice? Someone who can provide solutions to slow turnover and improve employee morale? Someone who even could tell you which buildings are going out to bid next? Someone who sees cleaning through your eyes?
If you don’t think this person exists, then you aren’t utilizing your sanitary supply distributor as well as you could be, or you are working with the wrong one.
“Good distributors need to meet their clients’ needs; it’s as simple as that,” says David Wax, executive vice president of San Diego-based Waxie Sanitary Supply. “If you build a strong relationship, you maintain good strong loyalty with contractors.”
So it’s no wonder that Wax emphasizes extensive training for his sales staff and customers. Or that he measures business technology investments by how they ultimately make life easier for BSCs.
Like Waxie, many distributor operations that serve the building service contractor market today are looking to create long-term relationships that go beyond selling products. But, often missing from this idyllic business arrangement is a BSC willing to look past price to the many added services available from customer-oriented suppliers.
“Working with contractors is like walking into a country that speaks 25 different languages,” says Barbara Casse-Bender, president of BCB Janitorial Supply Co., Hackensack, N.J., and a board member of the New Jersey Sanitary Supply Association (NJSSA). “Some are extremely focused and know exactly what they want and how they want it, shopping for the best price for the best products, with the best package of support services.”
Casse-Bender even encountered one BSC who thought she bent over backward so much to help him in a bind that he offered to pay the regular price rather than a discounted one.
But the most common mistakes she sees among the less savvy or inexperienced contractors range from completely overlooking supply costs when bidding to trying to buy the least expensive products that often are less reliable and don’t clean as well.
“They inevitably end up paying more for replacements than if they bought a more durable or stronger acting product right away,” she says.
Putting price into perspective
Price is not just based on the item that ends up in a contractor’s hands. Much more is included.
Many distributors understand that cleaning contractors have seen their margins stagnate or shrink in the last decade and have tried to price accordingly, but there are limits to how low they can go.
“Cleaning contractors are forced to be price competitive because of serving their customers, so we know it will be an issue,” says Linda Silverman, vice president of sales and marketing for Maintex, a chemical manufacturer/distributor in City of Industry, Calif., and past president of the International Sanitary Supply Association (ISSA). “The difference between being price conscious and only talking price is quantifying the value included in that cost.”
What quality suppliers often include is special delivery, training, equipment servicing, just-in-time ordering, around-the-clock support and a slew of other individual touches.
Items often are shipped wherever the BSC needs them — whenever needed — which can be expensive for distributors, leading to at least some passed- on costs.
“A contractor may need delivery to the fifth floor of a building, and that could take three to four hours for one delivery, which can get expensive,” says Bruce Albright, sales professional for Dallas-based Pollock Paper Distributors. “If contractors have thought through their own costs to do this themselves, they realize the benefit and understand the higher price, but some who are just starting out may not realize that yet.”
Training is the next factor. It often is on-site where BSCs need it most, and often more than an initial product demo. Sometimes distributors offer training for every shift, right in a row, to make sure all employees understand new equipment, current government regulations and other issues critical to operations.
The distribution industry used to give away training and other “add-ons” when times were good, but price wasn’t as much of an issue as it is today, says Casse-Bender. Then distribution roll-ups started and new mega-suppliers provided just the product at a reduced price, tempting BSCs who didn’t realize all that wasn’t included.
“Suddenly, we were showing up in the middle of the night for training, and customers were asking us to meet these lower prices and still offer the add-ons. We just couldn’t do it all for free,” explains Casse-Bender.
The same is true of machine repair and servicing.
“We tell customers from the beginning that if they want on-site service, it’s more expensive to pay for the technician’s time to drive to a customer’s location, but it can be done. If they want it cheaper, they can bring in the machine, and if they want the bottom price, then the service calls will be extra,” Casse-Bender says.
Usually, savvy customers realize the cost of interrupted cleaning services is much more of an issue than paying for someone to fix equipment on the spot.
The best distributors also are available anytime to answer questions regarding general cleaning problems or to quickly help with a start-up operation. In fact, Richard Petty, another Pollock Paper sales professional, who used to work for a BSC, says its his job to make sure contractors never need to call him after hours or at the last minute.
“Well-trained professionals have their customers prepared, but many times, if the relationship was there, I’ve opened up the building on a weekend to get them products they can’t wait for,” he says.
All of these things are costs of doing business to satisfy BSC needs, before any profit is added for the distributor. Suppliers also have dropped their margins in the last decade to meet the demands of contractors’ shrinking margins. If BSCs are feeling a squeeze, so are their suppliers.
There are some distributors that might offer these options free of additional charges, but usually that is for preferred customers who have proven over time that they are loyal and won’t stray for a few pennies less.
BSCs also need to understand that savvy suppliers are not in the business of simply moving chemicals, paper or equipment. One purchase at a low price will not help a distributor successfully grow, just as a one-time service request won’t keep a BSC afloat.
“We’re not in the case-moving business, we’re in the solution business,” says Albright. This may sound like a standard sales line, but Pollock Paper backs up this claim with a variety of special services for contractors. Albright has created a price-per-square-foot option that allows his customers to more easily calculate supplies into their bids in terms facility managers require.
“You can imagine the many variables when a contractor has to determine how much paper is used in a building, but normal pricing structure doesn’t mesh with what their customers ask for. So contractors have to do all the calculations for supply costs,” says Albright. “That is a need we worked to fill, even if it wasn’t the normal way distributors bill.”
Albright also holds monthly training sessions, in addition to the standard product demos he does on-site. These classes never focus on just one manufacturer, but provide a variety of new products that Pollock believes has relevant use in contract cleaning operations. Albright often has to schedule multiple sessions to accommodate the high numbers of BSCs requesting to attend.
It’s often a part of returning the loyalty customers give to their suppliers, says Albright.
He and other Pollock sales people also use the latest business technology for a range of things from customer service to online ordering.
Casse-Bender is equally as serious about meeting BSC needs in her area. She currently is working to create contractor-specific educational seminars for the NJSSA’s regional trade show next May, which is open to end users.
“It makes sense to have members of the entire supply chain together, just as the ISSA is doing,” she says. “We consider it another service to our customers to give them a chance to see the newest products and take classes that have to do with improving their businesses, rather than just product usage seminars.”
And Casse-Bender says she tries to practice what she preaches in her own BSC sales relationships.
“Being loyal to contractors means that if they get 20 new stores and need 20 of everything, you might give them longer terms or a start-up price to help them get on their feet,” she says. “That’s because that one-time purchase isn’t the last word, it’s just the beginning of what that customer will need to buy and what cleaning solutions they’ll need to tap us for to keep that store’s business.”
And ability to build loyalty pays off in the long-run for both sides of a supply relationship.
“It doesn’t behoove us to see our customers spend too much money or fail at their jobs, because we’ll be out of business soon after that,” says David Burmahn, corporate marketing manager for Pollock Paper. “We just want to work together to create partnerships throughout the supply chain, from manufacturers, through contractors and all the way to the building owner and manager.”
|There are some business cycles distributors see many of their BSC customers experience that they wish they could help clients avoid. One such cycle is that of growing BSCs trying to buy direct and become their own distributors. Burmahn was shocked to hear a speaker at a Building Service Contractors Association International convention advise BSCs to become their own distributor after they reach more than $1 million in sales. He had seen so many contractors much larger try this and fail that he offered to speak at the 2001 show to help BSCs determine the best distribution fits for their needs.
“It just hit me like a 55-gallon drum when I heard that,” he says. ”Sometimes it’s painful to hear companies talk about how they can do things better than billion-dollar distributors who do nothing else. We have seen others invest too much time and money into something that can take away from their core cleaning business, but it’s hard to dissuade a company at that point.”
Yet most of the companies that have taken that leap return to distributors a short time later because they need to focus on their core competencies, says Ronald Kahn of American Brenner Wholesale, who has witnessed the situation time and again. His advice is to look to successful companies of equal size and see how many still work with distributors.
Plus, Kahn reminds BSCs that they also receive the collective knowledge distributors have gathered from working with myriad cleaning operations and facility types.
Granted, there are some national corporations that are so large they already have the infrastructure in place to handle buying direct from manufacturers and creating their own supply lines. North American Coverall recently went to an in-house supply system because it was one more service it could provide franchisees. Product use would become more streamlined, buying in larger numbers would lead to lower group prices and Coverall could private label products to further engrain its name with customers.
But few BSCs have the ability to take on that non-core service.
“We’ve never tried to do distribution ourselves because it’s just not what we do,” says Mark Herbick, a large Chicago-area contractor who has expanded his cleaning oper-ations over the years, but always stuck to distributors.
“Our distributor is like a division of our own company, helping us when we need it, and that’s how we like it,” he says.
And that’s how most distributors want to operate as well, if given the chance.