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The Right 'Stuff'
Even in an uncertain economic situation, one thing is for sure in the jan/san industry — end users still view distributors as an important link in the supply chain.
According to separate Sanitary Maintenance magazine surveys of building service contractors (BSCs) and in-house service professionals (ISPs) that asked them about their distributor expectations, 55 percent of BSCs and 67 percent of ISPs say they purchase their products exclusively from jan/san distributors.
A major reason why most end users say they choose to deal exclusively with distributors rather than manufacturers, wholesalers or "big-box" stores is because distributors can control costs, offer more resources and bring value through partnerships.
"Distributors become very familiar with our business and know who our particular audience is. They can provide alternate solutions to us that other outlets can't," says Dahlia Kelada, director of marketing for Metroclean, a Houston-based BSC. "Distributors know right away what our customers want. The relationship part is important. There's value in that."
That relationship becomes even more critical during economic hardships. In light of the recession, 73 percent of both BSCs and ISPs are relying more on their distributors to help them grow their business.
"We look at an economic downturn as an opportunity to grow our business, not as a hindrance," says Kelada. "We value vendors who want to go the extra mile to provide exceptional value, as opposed to those who want to make a quick sell."
With more end users seeking extra help nowadays, it's extremely important that distributors provide the services customers want or risk losing their business to another supplier.
Pricing Outweighs All
In the current recession, BSCs overwhelmingly view good product price as the most important factor when choosing a distributor. According to the survey, 52 percent of BSCs chose a distributor based on their product prices. The next highest trait — value-added services was selected by only 18 percent of respondents.
Because end user companies have been forced to tighten their budgets and work with less, price has easily become top of mind, especially for those BSCs who have customers requesting reduced pricing.
"We are under unprecedented pressure to decrease our pricing to our clients," says Barbara Whitstone, vice-president of business development for CleanPower in Milwaukee. "In order to maintain acceptable margins, all overhead costs are under increased scrutiny."
To maintain margins and not be forced to pass any dreaded price increases on to their customers, BSCs appreciate those distributors who can offer locked pricing on products.
"We look for a vendor whose prices don't fluctuate," says Kelada. "We appreciate vendors who offer guaranteed pricing for a given term, like six or 12 months."
While ISPs appreciate good price (38 percent according to the survey), nearly as many (26 percent) appreciate vendors who are willing to go the extra mile to provide exceptional value. And as today's ISPs face an unprecedented number of facility management issues, they view distributors as more than just product suppliers. ISPs say they view distributors as business partners that they team with and build long-standing relationships with.
"Everyone wants to purchase supplies and equipment at the lowest cost but the relationship is more valuable in the long run," says Shelton Riley Jr., assistant director of facility services for Texas Christian University, Forth Worth, Texas. "We have years of service tied up with several of our vendors and because of the trust issues developed we can rely on them when and if a crisis arises."
When it comes to value-added services both BSCs and ISPs agree that hands-on training is most important.
"Without a doubt, hands-on training blows away reading product literature," says Riley. "On several occasions our distributor has brought in company reps to demonstrate equipment and follow up with employee training. When they are there using the equipment or product in front of our supervisors and employees, our staff has a chance to ask questions. This also gives them a future reference."
Training is so important that if missing, it can get an end user to switch distributors. In fact, CleanPower recently changed distributors because it was receiving subpar product training. Now, however, Whitstone says the company is happy with its new distributor who is willing to work with the company's crews, design training programs for its employees and bring in manufacturers to keep them informed on new products.
After product training, customers appreciate flexible delivery for its convenience.
"We may need to have things drop-shipped in a couple different places and distributors will do that," says Tom Heveron, president of Beachland Cleaning Service, Vero Beach, Fla. "That way we don't have product being dropped off at one location and then have to distribute it ourselves."
End users also are more likely to consider purchasing products from those distributors that provide a variety of product lines. But with the downturn of the economy, many end users find that distributors are not stocking as much product. In fact, Brite Janitorial in Fort Worth, currently has to purchase products from three different distributors, says George Brite, the company's president.
"One of them we buy floor products from, another carpet chemicals, another one we buy paper and plastic," he says. "If I can find one distributor that has everything, boy that would be so simple."
Although there has been a strong push towards online ordering in the jan/san industry, SM's survey results found that although end users purchase some products from distributors' online catalogs, 60 percent of ISPs and 44 percent of BSCs still purchase the majority of their products from distributor sales reps.
"I just like to see the salesperson and get to ask my questions and kind of drill down a little bit and make sure it's the right product for us," says says Darrel Hicks, director of environmental services for St. Luke's Hospital, Chesterfield, Mo.
But as distributors make more of a concentrated effort to bulk up their Web sites, more than 60 percent of BSCs and ISPs say they expect to purchase more products online in the future. Most end users like Kelada says they plan on purchasing more online from distributors in the future as long as it is beneficial to them.
"Ordering online is convenient and we don't have to waste time dealing with a vendor," she says. "We have better documentation of our purchasing patterns when we purchase online, so having that benefit alone will incline us to order more online in the future."
By ordering products online, end users say it has helped streamline their purchasing operations. End users appreciate distributor sites that contain e-commerce software that allows them to create their own catalog of products and set budget parameters on what management wants them to buy, says Dick Dotts, president of DMS Facility Services, Monrovia, Calif.
"We can put our budget number into their system so it can block our order if it exceeds it," he says. "And then it just raises a flag and we would have to override it. It's sort of our watchdog to keep our disciplines in check."
Distributors sites should be heavy on product information. More than 80 percent of both survey respondents want detailed product descriptions and more than 70 percent of respondents expect access to material data safety sheets (MSDS) on their distributor Web sites. Less important but still valuable are Web 2.0 applications such as educational blogs and podcasts. However, distributors should be mindful not to let the "bells and whistles" clutter up the site.
"We want our entire online experience to be headache free," says Kelada. "Online purchasing should be convenient and provide better tracking, visual aid and easy-access to purchase reports."
Besides seeking online ordering capabilities, end users also look to partner with distributors who can "talk the talk" and "walk the walk" when it comes to green cleaning.
Green cleaning reached an all-time high in the jan/san industry in 2009. And as more facilities demand sustainable cleaning methods, today's end users are relying on their distributors to provide the training and knowledge to "go green." In fact, 83 percent of BSCs and 87 percent of ISPs say that they require their distributor to be knowledgeable about green cleaning.
"Green cleaning is so important in our field," says Whitstone. "Distributors need to be able to help us educate our employees and keep us informed of new technologies and products."
End users don't like taking the walk into unknown territory alone, so they say it is important that their distributor is also able to provide guidance or assistance in helping achieve green certification. For example, when DMS Facility Services recently achieved ISSA's Cleaning Industry Management Standard's Green Building certification (CIMS-GB), Dotts says it was extremely valuable to have his distributor there to help with any questions his company had and help with the integration of green products and processes that were required.
"They have people on their staff that are certified auditors, so they helped us," he says. "They were very supportive in our collateral materials."
More BSCs like DMS Facility Services will be seeking certification. According to the survey, 63 percent of BSCs think it is important that distributors can help them achieve a company certification such as CIMS or Green Seal's GS-42 designation.
But customers shouldn't be the only ones interested in being certified. Sixty-seven percent of ISPs and 65 percent of BSCs also say it is a necessity that their distributor be certified, whether it's LEED-AP or CIMS I.C.E.
"By having these certifications it shows their commitment to the industry and their professionalism," says Whitstone.
As the book is set to close on 2009, taking customers' suggestions and needs into consideration for 2010 will go a long way in forming a true partnership that benefits both sides.
|Click and view Survey Results (pdf)|
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