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Archive for December, 2010

The GAWDA That Keeps On Giving

Wednesday, December 22nd, 2010
Haun Sales Rep John Wilmarth (left) and William Stadelman
Haun Welding Supply Sales Rep John Wilmarth (left) and William Stadelman

With the holiday season in full swing (and the economic scales starting to tip in a positive direction), the spirit of giving is stronger than ever. I want to highlight the efforts of a couple of GAWDA distributor members who have been involved in some great projects that represent the industry in a great way.

Last week, I spoke with Haun Welding Supply, located in Syracuse, NY, who played a major role in making a wish come true for a welding student who is fighting brain cancer. When William Stadelman became too sick to attend classes, he asked the Make-A-Wish Foundation to help turn his garage into a welding shop so that he could keep up with his favorite subject. Haun Welding Supply outside sales rep John Wilmarth found out about it through Stadelman’s welding instructor, John Shear, and couldn’t turn down the opportunity to make a difference.

In the 8 months since he found out about the wish, Wilmarth worked alongside Miller Electric and Haun’s supplier partners to bring together more than $15,000 in equipment, gases and accessories for Stadelman’s shop. It really shows what can be accomplished when distributors and suppliers come together for a common cause. What a great project, and what a difference it will make for the welding student.

Next, I found out via twitter about nexAir’s donation to help the local Meals On Wheels campaign in Memphis, TN. The company’s employees, all the way up to the executive level with CFO Milton Lovell, showed their support by donating time and money to help deliver Christmas meals to those in need. In all, the company contributed $5,000, which will fund 750 meals. Hats off to you!

With the most recent GAWDA Gives Back campaign exceeding $200,000 for the benefit of Maui’s Child and Family Service charity, it’s no secret that GAWDA members are a selfless, caring group. I am never surprised, but always thrilled to see the projects members are involved in.

How does your company make a difference? Did you take part in any special holiday charity projects in 2010? I’d love to hear about it.

Does The New Cell Phone Ban Go Too Far?

Tuesday, December 21st, 2010

Department of TransportationOn Friday, December 17, DOT proposed new rulemaking to implement an interstate ban of cell phone use by truck drivers that affects GAWDA members. This comes not long after a ban specifically targeting texting was passed, taking a somewhat interpretive ban and making it concrete. Interestingly, the new rule goes above and beyond obvious restrictions by adding “holding” a cell phone and “reaching for” a cell phone to the list of banned activities.

When the texting ban was implemented, I spoke with two of GAWDA’s consultants, and they both agreed that it was something members should not ignore. Read what they had to say about the texting ban. Like the existing texting ban, penalties for the proposed cell phone ban are not limited to drivers. While drivers can face suspensions, a revoked CDL and fines up to $2,750, the carrier, i.e. distributor who commissioned the delivery, can face up to $11,000 in fines.

The good news is that you can protect yourself by having a cell phone use policy for your drivers. If you have a policy, now might be a good time to review it and make sure your drivers are aware of what it means. While the current proposal is not yet law, it may not be long before it is. If you don’t have a policy yet, there’s no time like the present. GAWDA’s Safety Committee drafted a sample policy, which you can view here.

DOT has moved quickly on addressing cell phone use by commercial drivers, and while the agency seems to have all the momentum, is there another side to this story? Will these bans create communication problems with your drivers? Are you in favor of or against the current proposal? Let me know by leaving a comment.

Competing With Internet Pricing

Thursday, December 16th, 2010

Image courtesy of PanapEarlier this month, I looked at the “Price Drop Conundrum” and the challenge of competing when customers demand lower prices. Today I came across an article on OPEN Forum that brings up another important aspect of price competition—the Internet. The article is called “What’s Your Response To ‘I Can Get It Cheaper On The Internet’?

These days, customers are informed—they are empowered by the Internet. Just as the Web can be great for marketing your company and networking, it can be bad for business when customers focus on price alone and don’t see the big picture. Internet discounters abound—it’s easy for them to sell product at a lower price with no service to back it up. This means it’s incredibly easy for your customers to find a lower price somewhere else.

In the article, Ann Handley shares a real-life example of a customer who comes to an unnamed appliance company with prices from the Web. To win his business, the customer says to the retailer: “You will have to offer prices that are lower than what’s immediately available in retail stores and online.” So how did the business owner respond? Perhaps with a little too much emotion: “Because you don’t seem to trust me, I think you should now become your own ‘appliance guy.’ Did you ever hear the term ‘value-add’? Good luck.”

While the appliance retailer’s guttural response was probably somewhat therapeutic, it’s not going to win the account, and it’s certainly not going to foster any referral business. The irony of his comments is that the customer probably doesn’t understand the idea of value-added services. True, some customers cannot be converted from their price-centric mindset, and this may have been one of them. He may not be worth the time, but I can bet he’ll remember his experience.

So I ask you: How do you respond to Internet pricing? What strategies do you have for bringing customers around to see the value of “value-add”?

Airgas and Air Products: Getting Up To Speed

Tuesday, December 14th, 2010

Airgas and Air Products: Getting Up To SpeedThere have been some major developments in the Airgas/Air Products situation, and yet the uncertainty of the situation is as strong as ever. In case you missed it, here’s what’s happened in the last two weeks.

At the end of November, the Delaware Supreme Court made a pivotal decision to repeal the Air Products’ proposed amendment that would have moved Airgas’ next annual meeting up to January 18, 2011, effectively shortening the Airgas directors’ terms by eight months. Given that at September’s meeting, three Air Products-nominated board members were voted onto the Airgas board, the Supreme Court decision was a big win for Airgas.

Soon after, on December 9, Air Products upped its bid of $65.50 up to $70.00, calling the offer its “best and final offer.” According to the Air Products statement, “The reality is that there are no other bidders for Airgas.” Airgas is currently reviewing the offer, and has yet to make a determination. However, Airgas previously stated that its board “unanimously” held $78 to be a starting point for negotiations.

As it turns out, this valuation may not have been unanimous as previously thought. The three directors nominated by Air Products wrote a letter to the chairman expressing this sentiment. The chairman quickly acquiesced to the directors’ request to obtain a third consulting firm for their benefit. But as NY Times’ Dealbook shrewdly points out, the consulting firm was likely chosen by the other six board members. It seems there may be dissention among the board—so we will watch and see where this leads.

So where do we stand?

Both parties are waiting on the Delaware Chancery Court to decide on whether to redeem the so-called poison pill (so-called by Delware  Chancellor William B. Chandler III in a letter), a measure to protect against hostile takeovers. According to Investopedia’s definition, a poison pill would make Airgas’ stock less attractive to Air Products, generally by diluting the shares and making the takeover more expensive. The judge stated today that he will not make a decision until the new year.

With the annual meeting pushed back from January, there is currently no finalized date for the meeting. Airgas writes in a response to the Delaware Chancery Court on December 10, “[Airgas] does not intend to hold its next annual meeting before June when its fiscal year 2011 results will be available and its annual report issued.” On August 30, 2010, Airgas offered to move its annual meeting up to June 21, 2011, in an attempt to leverage votes against the Air Products by-law proposal. Given that Airgas now controls the meeting date, it is more likely that the meeting will take place in September or October 2011. However, according to NY Times’ Dealbook, an Airgas by-law requires a supporting vote of only 33 percent of shareholders to call a special meeting. As such, Air Products may attempt to rally Airgas shareholders to move the meeting up to June.

As we wait for a resolution that may still be a long way off, I can only wonder what impact the situation will have on the industry. If Air Products takes over, how will it impact you? Will there be any residual effect if Airgas wins out? Let me know what you think.

Drawing Artists To Welding & Gases

Monday, December 13th, 2010

One of the niche markets that gases and welding distributors serve is that of artists and sculptors. I learned the real deal behind welding art when I wrote about the Welding Rodeo, a welding sculpture competition. I was amazed to see the things some of the artists created, and also to discover just how popular the craft is.

Even here in the offices of Welding & Gases Today, I walked past a piece of welding art without ever knowing it. In fact, the piece relies not only on welding but the gas cylinder itself. I’m talking about a bell made by Bowden Bells—and it’s made from a used gas cylinder. So, in making art, not only does BB make use of welding gases and welding as a process, but the actual gas cylinders.

As I was thinking about it, I wonder how many artists even realize the possibility of using gases and welding to create art. If it was a surprise to me, then it would probably surprise a lot of people. Do any of you market specifically to artists? How do you reach out to the artist community for customers?

Also, check out a post from my colleague Dan Vest, who recently wrote about an artist who is making art out of used gas cylinders recovered from Mt. Everest.

If you are curious, here’s what the bell looks and sounds like.

What Groupon Means For Gases & Welding Distributors

Wednesday, December 8th, 2010

GrouponDiscount is probably not a word you like to hear from your customers. But it’s no secret that discounts do attract business. Lately, I’ve been reading a lot about a website called Groupon (groupon.com), which specializes in discounts. Groupon is changing the way companies give discounts—so could it change the way you work with your customers, too?

Groupon has been in the news over the past week for turning down a reported $6 billion buyout offer from Google. Something like that makes me take notice—first, the fact that Google likes the business enough to make its highest priced acquisition offer yet, and second, that Groupon had the panache to turn it down. Talk about self-confidence.

In a nutshell, Groupon helps businesses translate their spiffs into results. The site uses e-mail, Twitter and Facebook to promote special offers—however, each deal is only valid if a minimum number of respondents signs on for the offer. The catch is that Groupon takes a cut of the profits generated. However, businesses and retailers are latching on by the thousands, and customers by the millions.

Most of you are familiar with buying groups, and many of you may even be members of such groups. Groupon takes the power of group discounts to the Web, while guaranteeing a certain quantity of business. Would you be more inclined to give a discount if you could ensure a certain number of sales that would result? It’s an enticing proposition.

But there’s also the challenge of service. In my last entry, I shared the perspective of one business that chose not to give a discount, and was happy to have fewer customers so it could focus on better service. Groupon looks in the opposite direction, trying to attract more customers at a lower cost. With customers harder to find than ever, could Groupon be an answer for some gases and welding distributors? Where does your company fall on the issue?

Either way, you have to admit that the Internet and social media are changing the face of business—especially in a world where online discounts are a multi-billion dollar industry. How is your company adapting?

The Price Drop Dilemma

Thursday, December 2nd, 2010

As I was reading an article in Inc. Magazine called, “Go Ahead, Raise Your Business’s Prices,” it brought to mind a dilemma that many GAWDA members have been talking about: customers only want the lowest price.

In the magazine article, author Jason Fried, co-founder of software firm 37signals, talks about the backlash of angry customers when his company decided to charge $9.99 for an iPad application. Nowadays, customers expect apps to be free or a nominal fee of $.99, but never more than, say, $1.99. Fried says, “We think free is a business cancer.”

So instead, Fried made the decision to charge ten times its competitors, and his justification makes perfect sense. “We wanted fewer customers to buy [our software].” At a lower cost, he says, his company of 20 employees could never provide good service and support to the masses. Instead of making $20,000 from 20,000 customers and provide poor service, he says it’s preferable to make $20,000 from 2,000 customers and provide good service.

The important thing is that Fried had the guts to stand by his price. Some customers will walk away. Many customers will complain. But, as Fried shows, the “right” kinds of customers will stay, because they recognize the value of the service. While software is a whole different game from gases and welding, the issue of price is a common concern.

What does your company do to combat customers who demand low prices? Would you do what Fried did? Let me know by leaving a comment.

Also, take a look back at our “Family Business Challenge” where we asked 10 GAWDA members what they would do if a customer asks them for a discount.