Your Customer Profiled

Nick Marshall” not only escapes death in the now-famous bath tub scene from the 2000 comedy hit, “What Women Want,” but comes away with the uncanny ability to read women’s minds. The fictional Chicago businessman played by Mel Gibson immediately leverages his oddly bestowed power to advance his career — when he’s not impressing the opposite sex with his “intuitive ability” to relate to a range of female emotions.

How would Nick have used his powers if he had been a sanitary supply distributor instead of the advertising executive portrayed by Gibson in the movie? As soon as he had solved the age-old puzzle of what makes women tick he may have turned to the next most exasperating inquiry in life — What Do Customers Want? Given the current economic downturn, he even may have made customers’ wants his first priority.

Unless you can recite in detail the litany of pressures your customers are under or really understand the nuances that separate one customer from another — or can, with a moderate degree of detail, list the Top 10 challenges facing today’s facility executive — well, you can only pray that you fall on your head only to discover that you can read the minds of both female and male product specifiers.

In the facility management field, in particular, there isn’t a “typical” customer. Some are end users. Others are service providers. Facility type, corporate mission, region — and, of course, how vulnerable or immune a customer is to the current economic downturn — all carry significant weight in defining the person across from you on any given sales call. And the priorities? A few are universal, but you can’t assume the hot buttons never change from customer to customer.

It’s a matter of economics, says Dan Strzyzykowski, a purchasing agent for Michigan Technological University in Houghton, Mich. Strzyzykowski coordinates the purchase of all cleaning and maintenance equipment and supplies for three residence halls, including its kitchen and dining facilities.

A shrewd buyer, Strzyzykowski does his homework on what distributors have to offer. He invites them all to come in once a year to hear their pitch, but is careful not to pay more than the going price.

“I put things out on the table,” he says. “I do business with them and they know they have to give me a decent price.” Strzyzykowski attends trade shows to keep up on products, as well, besides bidding out supply costs.

Taking a certain distributor’s pricing for granted is one mistake purchasers make, he adds. “Once in awhile you’d be surprised what happens if things are taken for granted.” Citing his annual paper towel purchasing, Strzyzykowski says one year a “hungry” distributor bid $15.95 on a six-roll case of toweling while the current distributor was charging $18.50. The higher-priced distributor was forced to meet the lower price.

“It makes people sharpen their pencils,” he contends.

Cost cannot be ignored, but other organizations are expanding to include other considerations in their buying practices.

“We’re looking for the most effective product that’s going to create the least environmental hazard at the least cost,” says Bob MacKenzie, the manager of plant operations support with the Department of General Administration for the state of Washington in Olympia. MacKenzie’s agency provides consultative and technical services to 580 public agencies including schools, colleges, state agencies and beyond.

The agency aids its members by making recommendations on cleaning operations, as well as recommendations on more efficient products. Additional support for cleaning staffs is needed, MacKenzie feels, because cleaning budgets — especially in the government — are some of the first to be cut. The specifics vary from state to state, but overall, janitorial staffs are expected to do more with less — fewer employees and tighter budgets.

State-run facilities are even more influenced by cost than private buyers, says MacKenzie. Taxpayer concerns demand that public facilities operate on budgets trimmed of every scrap of excess. State mandates require that all projects solicit competitive bids, with contracts often going to the distributor who comes in the lowest. There are few exceptions, MacKenzie adds, though some purchasers do rate bids by using “qualitative scoring” methods, or ratings that account for product effectiveness, quality and the vendor’s history, among other things. But, he adds, most stick to what the initial request for proposal called for, and buying doesn’t stray far beyond those parameters.

Distributors — if interested in securing government contracts — should take steps to know the process. Learn what media publish government announcements, MacKenzie advises, and monitor who publishes requests for proposals so that you can become a part of that list.

It’s safe to assume, too, that government buying, especially, will focus more and more on “green” solutions (MacKenzie’s agency tells its clients what to look for, who to go to and answers related questions).

Shifty Characters
Though there may be security with government cleaning jobs (especially in regions with a strong labor ties), it’s common knowledge that custodial staffs are some of the first in a facility to be down-sized.

“People just don’t stay in a position for a long period of time,” says Lee Pemberton, president of the Pembertons, a learning center and marketing firm specializing in the cleaning and restoration industry in McKeesport, Pa. Pemberton, who is also on the board of directors for the Institute of Inspection Cleaning and Restoration (IICRC), says this adds to already high training costs and makes it more difficult to send cleaners to classes. It is a vicious cycle that leads to poorly trained staff, Pemberton says.

It goes even deeper, Pemberton ventures, to the attitudes and changing work ethics of today’s small business person. People just aren’t willing to work nights and weekends. “They want more time for themselves, and that’s not necessarily bad, it’s just a major trend.” Pemberton feels this trend has also contributed to decreased attendance at the association’s training seminars.

Decisions, Decisions
There are problems in the cleaning industry, but there are ways, too, for distributors to stand out with the services they provide.

Besides tighter times calling for trimmed-up budgets, and the changing dynamics of cleaning budgets and staffs, numerous other factors affect the buying decisions and habits of customers, and zeroing in on those factors could make a big difference in retaining accounts and keeping customers satisfied.

Many things seem obvious. Customers are looking for product effectiveness, availability, quality and price. They want service, training, and a variety of product offerings. They also want a distributor that caters to their specific business.

Bob Carley, owner of New England Office Cleaning Service, a contract cleaning firm in Derry, N.H., says he uses five or six different distributors, his choice depending mainly on where his company is working. Price and preferred products also play a part in his decision-making.

Carley feels many pricey products don’t work any better than mid-priced items, and he’s confident that his product knowledge has helped him steer clear of salespeople trying to overcharge. Business overhead is the most important thing a BSC can protect, Carley says, and shopping around is the best way to find the best product at the lowest price.

Alice Marin, a janitorial liaison for Amerimar Realty Management Co., Denver, orders sanitary supplies for an office complex that spans two city blocks. Because of her limited time and resources, she recently consolidated her buying from two distributors to one.

The distributor she works with won the bid, but Marin also values other services it provided over a five-year period. The distributor helped her devise a budget based on tenancy and projected usage, and came up with a plan for the year.

“There’s some comfort that comes from ordering from the same supplier because they know what you want,” Marin says.

Sharon Wilson, housekeeping supervisor for Mercy Medical Center in Centerville, Iowa, finds broad product offerings especially attractive.

“I choose to use the one distributor the most because I can get most of the things I want and need from them,” she says. “The one company can supply it all for me and they’re very in-tuned to what’s needed in hospital situations.”

A health care facility requires a distributor who is knowledgeable of codes to follow and sterility and sanitation issues, she adds.

A salesperson with the knowledge needed to tend to a facility’s needs is extremely important to Julia Kaminsky, the director of housekeeping for ARAMARK, a 350-room hotel in Arlington, Va.

“I want someone who is knowledgeable and able to help me when I need them but that is not pushy where they’re in my office every week trying to sell me products,” says Kaminsky, who also deals with one distributor most of the time, but who also deals directly with SC Johnson Wax through a corporate contract.

The hotel setting allows for a little more leniency when it comes to purchasing for quality, especially with paper products, but Kaminsky says price is still a leading issue. Once she finds a product she likes, though, Kaminsky is hesitant to stray. If she likes its performance and is getting the right price, she is fairly content. Distributors help her most, she says, when she is buying supplies for something new, or with any specialty product.

A Step Ahead
Those interviewed said they were satisfied with the distributors they are using. The distributors received high marks for being in tune with the customers’ hot buttons. Still, experts say, it’s not good enough to keep pace with customers — you should try to stay one or two steps ahead of them.

“I think facilities are going through a really big transition right now that not a lot of people are aware of,” contends John Walker, president of ManageMen in Salt Lake City and a leading consultant to the cleaning industry. “[Distributors’ customers] are trying to consolidate what they buy and simplify what they use while trying to meet environmental concerns.”

This is going to affect the way distributors operate, says Walker. Consolidation has changed the dynamics as well, pushing the middle-sized distributor toward extinction while increasing the percentage of very-large and very-small distributors.

Another change has redefined the product decision-maker. “Buying has moved off the street and into some corporate office,” Walker says. It’s getting harder and harder to sell, and distributors need to realize they need to evolve with customers and their buying habits.

A globalized, Internet-connected world affects the traditional business model, Walker adds. The digital economy allows buyers to link up and shop the world. Increasingly, too, U.S. businesses are buying and selling with overseas nations, changing the business dynamics of a country once driven by commerce conducted within its own boundaries.

A New Role
Besides those influences, distributor functions have shifted and changed in the role they play in the supply chain. At one time there were three main purposes the jan/san distributor served, according to Walker. They were: creating new markets for manufacturers, supporting what the customers were doing, and delivering the products. Those functions aren’t the same today, Walker says. He feels education is suffering because customers are more reluctant to learn from the person they’re buying from, and he also has heard that manufacturers are saying that distributors aren’t getting the products into new markets.

“In 2001 and beyond distributors need to be thinking differently about the business and not expect things to work the way they did 20 years ago,” says Walker. He suggests looking at the three distributor functions, figuring out how needs, expectations and capabilities have changed, and changing the business model accordingly.

Options could include an unbundling of some services, he adds. Maybe it’s things you used to provide for free. Distributors may want to strip those things out and concentrate on becoming a low-cost provider of solutions to customer problems, Walker says.

“There are tremendous opportunities in this market that never existed before. I think it’s scary if you’re stuck, but if you’re looking at some of the new opportunities that are being created and work hard with that it’s going to be a great decade for some companies.” Technology and the connectivity it provides will also be a strong catalyst to change, Walker adds.

“The first thing the [distributor] and management people need to do is educate themselves: read magazines, get training and attend trade shows nationally and internationally,” says William Griffin, president of Cleaning Consulting Services, Seattle. He says distributors need to be providing their customers with the best, newest products and technology or they’ll be left behind by an industry that is now undergoing swift change.

“If you’ve got your head in the sand you’re only going to be left behind — that’s exactly what’s happening,” Griffin says.

Customers value honesty and availability, he says, as well as support and service, and distributors are an important conduit from the manufacturer to the end user. However, they have to work at maintaining that usefulness.

“They have to work hard to make sure they’re bringing value to the channel or the process because if they don’t they’ll be eliminated from the process,” Griffin adds.

Go Beyond What You Know
Mark Dancer, author of the book “The Wholesale Distribution Customers Speaks,” and a principal with Frank Lynn & Associates, Chicago, says distributors will have to figure out ways to bring more to the table in terms of services. They may also want to go as far as rethinking their business model: changing, repackaging or even charging for the services they currently supply for free.

In the book, released last month by the National Association of Wholesaler-Distributors (NAW), Dancer concentrates on two issues: buying online and buying fee-based services. Both of these issues are going to become much more important to the survival of the distributor in coming years, and some of the strategies Dancer discusses are already prevalent in other industries.

In the course of 650 interviews with distributors’ customers in every industry segment, Dancer concluded that distributors should be focusing on problem solving for the customer. This can be accomplished in a number of ways.

No. 1 is selling services. It is a concept that was born in other industries, but that jan/san distributors will have to consider as they face consolidation and shrinking profit margins, Dancer says. There is promise and problems that accompany this strategy, but there is the potential to create a new profit source and help customers in new and unique ways.

One problem to overcome is the fact that fee-based services assume that the distributor will have to begin charging for things they’ve given away for free in the past, including education or support. That’s not always the case, but distributors may have to rework or reassess what they’re giving away.

Dancer cited an example where an electrical parts distributor divided its training function into a separate, sister company.

“By packaging it as a business they were able to sell it to different companies,” Dancer says. It may involve changing the business model a bit, but it can work.

Distributors can also work to bundle services, providing a customer all they need at one source. They may take on a bigger role in inventory management. They may offer to increase profitability — at a price. It boils down to focusing on one problem a customer has and devising a way to help solve that problem. Making the customer’s life easier will make your support invaluable.

Online initiatives, for all their hype, will be crucial in the future. Dancer’s study focused on every aspect of online usage. The findings reflected that customers are online a lot more than distributors acknowledge, and statistics showed that whatever barriers remain are very thin.

Whether it’s technology or selling value-added services, before forming a market strategy — and in your attempt to uncover the things customers find valuable — it’s vital you go to the source: the customer. The only way to gauge customers’ attitudes is to talk to them, advises Dancer. Sounds simple enough, but customers have a lot of opinions, and distributors often neglect to dig to find out what they are.

“When we talked to customers we had the sense that they have a story to be told, meaning that they’ve been watching all these changes in the marketplace. They’ve seen consolidation, they’ve read about the new economy, and they’ve formed a lot of opinions,” says Dancer. They’re ready and willing to voice these opinions and talk about these issues.

“If you’re sitting around and not talking to customers you’re really missing the boat,” Dancer adds.

“We think distributors are in a position to help customers by improving their buying processes,” he says. Distributors, in the day when the customer is king, will need to play a crucial role in reengineering the buying process. The only way for a distributor to be successful is by making customers happy and that involves meeting their needs — some of which they may not even know they have. So talk...unless you can read minds.