Universal Unilink Members cite increased revenue and profits and protecting current customers as key reasons for entering the $24 billion facilities services market. Some Members remain narrowly focused offering only a bundle of restroom products . . . soap, paper and air fresheners. Others have expanded to include 1st Aid, Safety, break room supplies, chemicals, equipment, etc.
At the recent Business Builders Conference, a forum looked at components of a successful program from the viewpoint of a Member, a redistribution provider and a manufacturer. Member Carpet Rentals, a dust control operation, expanded their program substantially when owner, Jim Gardner added a new division, Piedmont 1st Aid and Safety. Larry Dishmond, who leads this division, presented a case study of a food processing account. In a perfect example of “solutions” or consultative selling, Larry outlined how this one account grew $850K in annual revenue in a year and a half.
Pointing out the importance of training sales and RSRs to look for opportunities, he listed several examples of “low hanging fruit, waiting to be picked that we walk by each time we visit.” In addition to towels, tissue and soap, he captured substantial business in categories including Safety and 1st Aid, Sanitation and Shipping. Dishmond outlined how addressing one category with solutions, savings and reliable service brought additional opportunities.
This customer purchases more than $500,000 in safety products including disposables (gloves, aprons, masks, gowns, etc.), hearing protection, hard hats, safety glasses, etc. In other categories, purchases range from safety signs to rain suits to freezer wear. “Be a source of knowledge for your customer, not an expert,” Dishmond advises, “Be willing to step out of the box and look for opportunities to save your customer money.”
With this particular account, Carpet Rentals saved the customer substantial dollars and picked up revenue by laundering items like gloves, filter bags and tray liners. The customer expects to capture $166,000 from recycling products; in fact, the savings achieved by laundering gloves is a hefty $20,000 annually. By partnering with Carpet Rentals, the customer processes fewer deliveries and invoices and issues fewer checks, plus, purchasing has far fewer sales people to see. Improved service also means that purchasing spends less time chasing back orders. All this makes Senior Management happy as it gives their managers more time to focus on a task at hand which makes them more productive and profitable.
The customer continues to ask Dishmond to evaluate other products and services. For example, Carpet Rentals was recently asked to evaluate a program currently handled by a national competitor where frequent late deliveries is causing expensive delays in production. This opportunity could add an additional $439,000 in annual revenue.
Dishmond pointed out that community colleges and state universities offer similar growth opportunities. He emphasized the importance of “stepping out of the box” to call on various department heads such as Buildings & Grounds for Residence Hall needs or the Lab Manager for Gloves, Safety Glasses, Lab Coats and Respiratory Protection.
“Offering your customers additional products and services has become even more important in today’s challenging market conditions and tough competition,” observed Donna Bruno, President of Logistics, a redistribution provider of a broad array of safety, first aid, and jan/san products. While the Facilities Solutions category offers great opportunity for growth, the risk can also be substantial.
The wholesaler can help the Independent get into the category without having to meet manufacturers’ minimums and with little or no investment in inventory. Many national competitors started with a wholesaler partnership, and, as business grew, began to move high use items to the manufacturer.
Key to growth is becoming recognized as a source for the category or categories. Logistics is unique in that they have no minimum orders; plus they offer personalized marketing to help you capture the business, aggressive prepaid freight and an assigned sales team to help you grow. As your customer orders, you can order the products which totally eliminates the need to have dollars tied up inventory. Logistics will drop ship to your customer with no added fee. As sales build, you can opt to stock the fast movers and bundle with the other products to save on freight or continue to use Logistics for your warehousing needs. Logistics sells through distribution only.
“Partnership with a redistribution/wholesale platform is key to launching a program with minimum investment. We continue to help you build business as the category grows with excellent marketing tools and deep inventories,” Bruno concluded.
Adam Siegel of Textile Rental Partners, a manufacturer’s rep group, has launched successful facilities services programs targeting growth, retention and increasing stop value for both Independents and the nationals. His Facility Services Boot Camp focuses on turn-key system selling for essential FS products including mats, mops, soap, paper, odor control, gloves, can liners, microfiber, first aid and more.
“Essential to a successful program are choose the right products, focus on service and train, measure and reward,” stated Siegel. He pointed out that finding products that all customers buy and changing the way those products are delivered is a basic first step. Disposables and products that meet OSHA regulations are great places to start.
Siegel also advises that the best programs are simple and easy to service. He recommends bundling because we’re conditioned to buy in packages whether it’s TV/phone and internet service or the combo at McDonalds. He suggested soap, paper and air fresheners or mats, scrapers, dust mops, wet mops as examples. Bundling makes building sales much more simple for the RSR who is key to your program’s success. Sampling also makes the RSR more effective and today’s customer is a big fan of samples.
He recommends role playing as an effective training tool and strongly believes that management’s commitment and involvement is essential for success. In addition to measuring new sales and new accounts, Siegel advocates measuring service related points such as retention, collection, referrals, etc. “It’s important that management be there for the training and watch for opportunities to coach and develop such as when the routes come in,” states Siegel.