A local gas station had been one of Bear Distributions, Rockford, Ill., most consistent customers for nearly a decade. Because of the harsh Midwest winters, the owner of the gas station always invested in a high-quality magnesium chloride from Jeff Salamone, a Bear sales manager. A couple of years ago, however, Salamone was told that his long-time customer was going to switch distributors and go with a cheaper brand of generic rock salt. They just said that they wanted to try to save some money with a less expensive product, he says.
Unfortunately, that winter temperatures got down to less than 5 degrees Fahrenheit in Illinois too cold for many forms of rock salt to effectively melt ice. An elderly woman stumbled as she walked across the slick path between her car and the building. Her broken hip cost the gas station $65,000. The gas station explained in court that they put down ice melt to prevent such an accident, but the judge determined that the product that was used wasnt adequate for the extreme conditions, says Salamone.
Needless to say, the owner of the gas station came back to Bear Distribution and has invested in the top brand of ice melt ever since. All they could do was kick themselves for putting price over safety. For what they paid in court, they could have bought a lot more product, says Salamone.
Ice melt can easily be cast aside as a commodity or add-on. Its a product, however, that deserves special attention, says Tom Coburn, president of Coburn Chemicals, Baltimore. The No. 1 purpose of ice melt is to save lives. Thats what its for, to provide safety and security, he says.
Expand and Conquer
Not all distributors, however, hold ice melt in such high regard. Depending on geographic location, customer demographics and individual product lines, its a product that jan/san executives view differently. To gain an accurate picture of exactly where ice melt fits into distributors product lines, Sanitary Maintenance conducted an independent survey of U.S. distributors.
According to the survey, most ice melt is sold to customers in the Midwest and along the East Coast. They make up 38 and 30 percent of the U.S. market, respectively. In addition, the South makes up 21 percent of the market and the West Coast 11 percent. Coburn Chemicals has shown its desire to capitalize on the demand for ice melt in the Midwest. Six years ago, the company began to focus entirely on making ice melt its premier product. We were basically just an East Coast distributor, but we knew that to be successful in ice melt sales we had to get over into the Midwest too, says Coburn. We took a gamble and invested in a large volume of product so that we could target cities like Detroit, Cleveland and Chicago where the harshest winters are.
To Market, To Market
Distributors of ice melt need to know not only what regions of the country to target, but what markets hold the greatest opportunities. Survey results showed that 35 percent of distributors name schools and educational facilities as the most frequent customer of ice melt, followed by office buildings (16 percent), industrial buildings (15 percent) and retail /apartments/condominiums (11 percent), rounding out the top four. But Salamone believes that the inverse order of that ranking is a good way to prioritize possible customers.
Apartments and condominiums are our No. 1 customer for ice melt, because they often have a lot of elderly people, he says. Those other facilities are more likely to have a mix of people, but condominiums especially are wary of having older residents slip or fall.
The survey further showed that government buildings (10 percent), hospitals (8 percent), restaurants (5 percent) and parks (1 percent) bought the least ice melt. Again, Salamone emphasizes that those customers who dont traditionally buy much ice melt also present the biggest opportunity for growth if they can be convinced of a need.
Why They Buy
A critical aspect of knowing how to sell ice melt is knowing why customers buy it from their distributors in the first place. SM asked distributors to rank what they believe are the five most important factors considered by customers who buy ice melt. Answers fell in this order: quality (49 percent), price (35 percent), availability (15 percent), environmental impact (2 percent) and brand name loyalty (2 percent).
Anyone can go out and sell the cheap stuff, but if you want to sell product that is top quality, will work quickly in all temperatures and wont hurt the environment, then you have to be able to promote it and demonstrate its effectiveness, says Michael Stanfil, president of Helsley Supply, Freeport, Ill. He adds that customers have different needs and distributors who can demonstrate the nuances of how ice melt product lines differ will prove to be a valuable resource for customers.
SM found that 50 percent of distributors who named schools their No. 1 customer of ice melt, also thought that price was the most significant buying factor. The remaining 50 percent thought quality was the most important consideration for schools. Other facilities showed similar results, illustrating the constant balance distributors must achieve in offering high-quality ice melt at a reasonable price.
Distributors have explored many ways to appeal to customers, but SMs survey results show that they keep coming back to the three methods that have proved to be most successful: advertising (37 percent), lowering price (35 percent) and special packaging with other products (8 percent). Of course the best way is to reveal the quality of the ice melt to the customer, so that arent thinking just short-term price, but also long-term price value, says Salamone.
Breaking the Ice
Just as important as finding the right product line or the right marketing strategy, distributors have a responsibility to demonstrate the proper method of applying the product. Correct application information is of measurable value to customers, says Salamone.
The best way to apply ice melt is to use a lawn fertilizer spreader, he explains. Theyre usually available at any hardware store, and most facilities already use them to maintain their outdoor areas in the summer months, he says. You just put the ice melt into the spreader and that will guarantee that it is applied evenly over the entire surface. Otherwise, you get piles of chemical in one area and not enough in another.
Distributors should also educate customers on the risks of over-application. Over-applying can be a big problem, says Stanfil. The more you use, the more you track into a facility and the more likely you are to damage the environment of the building. The best way to apply ice melt, he says, is to shovel away as much snow and ice as possible in order to do a first application. Then, after allowing the chemical to work for one or two hours, shovel away any additional snow and reapply.
Applying ice melt twice in smaller doses is much better than just piling on a lot of product initially, he adds.
When asked to assess the significance customers place on the effect ice melt has the environment, 56 percent of distributors surveyed believe customers consider it somewhat, while 30 percent said its not a factor and 14 percent said customers are very concerned about it. Thats why distributors have to do a better job at promoting the best products, says Stanfil.
For almost 70 percent of the distributors surveyed, ice melt makes up between 1 and 3 percent of their annual revenue. For Stanfil and Helsley Supply, however, ice melt is a whopping 65 percent of annual revenue. The ice melt we sell is very expensive, so its definitely not a commodity, he says. One of the biggest advantages to our ice melt is the way it works with the environment around a building. The ice melt Stanfil sells is not only safe for grass and plants, but it is actually good for them, he says. Chemicals like potassium chloride or magnesium chloride have essential minerals that are necessary for plant growth. Likewise, the more expensive products will not damage unnatural surroundings, such as concrete and asphalt.
According to survey respondents, distributors sold an average of $50,000 in ice melt last year. Likely a result of the mild 2001 winter, 58 percent of distributors saw their ice melt sales drop last year, while 23 percent saw an increase and 19 percent said sales remained the same. Companies that rely heavily on ice melt sales feel the pinch of warm winters more than other companies. We still sold quite a bit, but our sales were down about 35 percent, says Coburn.
Its wise for distributors to arrange certain agreements with manufacturers so that they are not at the total mercy of the weather, he adds. Oftentimes, manufacturers are willing to share a distributors losses for ice melt sales during warm winters, and they will buy back a certain amount of the unused product.
According to SMs survey, distributors sell more calcium chloride than any other type of ice melt (44 percent), followed by potassium chloride (22 percent), sodium chloride (16 percent) and magnesium chloride (11 percent). Seven percent chose other. While different chemicals have different attributes, sales will always depend largely on the weather.
Ice melt is just one of the products that you never know how much youll need until you need it, says Coburn. Our customers expect the inventory to be there when they arrive without any hassles. Surveyed distributors said that most ice melt sales happen when winter is already in full swing 63 percent of distributors believe that January/February are months when ice melt sales peak, followed by November/December (38 percent), September/October (13 percent), July/August (3 percent) and March/April (2 percent).
No matter what the season, Coburn says that companies can find great success with ice melt sales. There are a lot of sidewalks out there, so we try to provide a lot of ice melt, he says.
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