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Strong Customer Relationships
While the Internet, handhelds and other technological advances are growing in popularity and changing the face of the distribution business, successful companies find the personal touch paramount to keeping customers.
by Traci Carneal
As a managing partner of the Crossroads Chevron in Nampa, ID, Rich Swenson is always looking for ideas to spark more sales in the convenience store just outside of Boise. That’s when he looks to his suppliers, who can offer years of experience and advice in this area just when it seems to get stale.
A customer of wholesale distributor Idaho Candy Co. of Boise for nearly three years, Swensen has relied on the knowledge of John Wagers, owner of the Boise-based company, many times. Just last year he reaped the profits of working with Idaho Candy on a special Hershey "display rack" merchandising program, one of several opportunities for manufacturer, supplier and retailer to work together to increase sales.
In the case of the Hershey rack, products that hadn’t sold for Crossroads Chevron in a long time were suddenly moving again, according to Swenson.
This is only one of many examples in which Idaho Candy helps it suppliers increase sales and liven-up the store. And it’s one of many reasons that Swenson remains a loyal customer. In addition to getting the product he needs within the hour of a request, Swenson is most impressed by the fact that he can call Wagers, the owner, and speak with him personally about any concern or request.
"I don’t know of many distribution companies where you can talk to the main guy or where the owner comes into your store makes recommendations based on being in the business for years," says Swenson. "Typically, we never do that in this business, but boy, he and his sales staff are really there for us."
In addition these qualities, Swenson states availability, price and "their commitment to me as well as my commitment to them" as the most important values of a distributor."
While some companies are cutting back on personal contacts with customers in tough economic times, Idaho Candy’s Wagers insists on enhancing this level of service.
"They are saying, here, we’ll give you a telexon and we will tag your shelves and you can send in your order," Wagers notes. "But we have our salesmen visits all of our customers’ stores each week and personally take their orders."
Wagers says the company is still able to function as a full-line distributor, and refuses to go to straight telemarketing with accounts.
"The best way to keep our customers happy is by providing this full level of service," he continues. One way he promotes longevity in retailer relationships is by keeping the same salesmen. The newest salesman on the Idaho Candy force has been with the company for ten years, and has called on the same accounts during that time.
Idaho Candy also prides itself on the prebooking opportunities if offers customers. By prebooking new items, retailers usually get a discount and have the benefit of receiving the item the first week it is released. In an industry that benefits from fresh, new items, especially with candy, having it first is a plus.
"My salesmen love the merchandising promotions offered by manufacturers. They get a commission from the manufacturer. In the case of Hershey, which is 40 percent of our business, the rack promotion was a huge boost for our company, our sales reps, and for our customers," Wagers notes.
Going the Extra Mile
Select Distributors, Inc., Dallas, TX, also makes customer service a top priority. According to Ibrahim Karim, vice president, the national company uses a three-tier system that requires the field representatives to go and talk to customers on a regular basis. A quality check supervisor stays in constant touch with the field reps, and Karim himself calls customers randomly to find out how they feel about Select Distributors’ service.
"If we receive any complaints, we first look at whether the customer was treated properly and respectfully. We try to overpower the negativity of the customer’s attitude with positivity and helpfulness," Karim says.
And like most companies today, Select relies on a little technology to enhance efficiencies and communication. The company makes laptops available to top-notch sales reps, and customer information, ordering and other data is fed into the computer and sent to a central office where others can access the information.
Select also offers forecasting services for its customers, relying on an Excel-based in-house system that tracks orders, deliveries and inventory levels. The company combines this information with past sales history and then increases or decreases inventory accordingly. And since Select deals with many large manufacturers of health and beauty care products who often face packaging shortages due to regulation changes or reformulations, this comes in handy.
"Our goal is to provide a continuous supply to our customers. We forecast three months ahead of time and budget ourselves properly. We carry three months of inventory at all times, so anytime a manufacturer is facing a shortage we can fill in the gap," Karim notes.
Southco Distributing Co., Goldsboro, NC, combines visits from field reps with technological aids, such as handheld systems, at the customers’ request to provide a well rounded service program.
"We work hard to keep our customers informed on new items, promotions, and what’s going on in the industry. We do this primarily through our account reps," according to Sherwin Herring, president of Southco.
However, Southco’s customers have requested Internet ordering capabilities so the company has provided it. Customers with computers in-store can go online and check on costs, retails and inventory levels, as well as set their own promotion dates, run velocity reports, look at accounts receivable, and look at top movers in Southco’s warehouse.
"Our cigarette program provides them with a suggested order based on past history and the inventory level they want to maintain. We also provide them with reports on which products are in their store, which ones are not moving, and which ones are," Herring says.
The Retailer as "Boss"
The customer is chairman of the board at Imperial Distributors, Inc., Auburn, MA, which just celebrated its 35th Anniversary. The national distributor supplies non-food items to some of the country’s largest retailers, including Walmart, Stop ‘n Shop and Shaw’s. According to the company’s president and CEO, Michael Sleeper, this placing of the customer on a pedestal is embedded in Imperial’s corporate culture.
In addition to 250 in-store service people meeting with each customer at least once a week, Imperial also conducts business reviews and performance results with all customers.
"If the results of these reviews are strong and consistent, we feel like we are doing our job. And that is a way of building a relationship," Sleeper says. "I don’t consider the assets of this business to be inventory and receivables. I consider it to be the loyal retailers, our most precious assets."
Sleeper believes no other company has as many in-store representatives as Imperial. "The power of service is the most beneficial part of what we do," he says.
As for technology, Sleeper says the company relies on it to deliver quality product on time, but doesn’t consider it the key that has helped Imperial improve its service. It’s the little things, like a plastic tie lock on plastic tote boxes so product can’t be pilfered. He figures the company could save about $30,000 by eliminating this item, but Imperial’s customers really want the added security.
"Most of our competitors don’t do this. It’s indicative of the emphasis we put on service and quality," Sleeper concludes.
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