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Staring Down Sandy

Thursday, November 1st, 2012

Despite heavy odds, distributors and suppliers on the East Coast were not to be out-whacked by Sandy. Contingency plans proved helpful.

  

On the East Coast this past week, a storm the likes of which has never been seen hit with such brute force that at least 87 people were killed, businesses and schools were shuttered, transportation came to a grinding halt, half of New York City went dark for days. Lower New York City was flooded and without power.  Bridges and tunnels were closed. And if you were able to get into the city when one bridge reopened on Thursday, you better have two more people with you in your car, or you were turned away.

In Levittown, PA, power outages shut down oxygen concentrators, and patients were scrambling for help, calling EMS, hospitals and emergency management.  When the large, electric-powered concentrators fail, patients resort to using small portable oxygen tanks, which empty within a few hours. So many calls were coming into the companies that refill the oxygen tanks looking for refills that they could not keep up. Patients were urged to contact their oxygen supply company to find out about the soonest refill and to consult their doctors to determine if they should be hospitalized.

As bad as it was in New York, Pennsylvania, Connecticut, Delaware and Maryland, New Jersey appeared to get the worst of it. Houses in coastal cities were swept away. Phone calls to two distributors located in Sandy’s path have gone unanswered for several days.

I called GAWDA members located in New Jersey, New York, Maryland, Delaware and Pennsylvania to learn how they were coping with the aftereffects of the storm. As of today, Thursday, November 1, some are still without power and phone service. Seaboard Welding Supply, located two miles from the beach in Oakhurst, NJ, had no water damage, but without power, the phones weren’t working, and they were searching near and far for additional generators.  Vice President Richard Nowell said that calls to the company were being transferred to cell phones, and they were receiving requests from emergency management re filling medical oxygen supplies.  Without power, though, they could not generate oxygen.  

Some GAWDA members indicated that their homes were in trouble, as were those of many employees. 

AWISCO has several locations in the New York City area and thankfully, none were impacted. Some employee homes, however, were in trouble. Vic Fuhrman, vice president of sales & marketing, pointed to the dwindling supply of gas, closed roadways, and bustling storefronts shuttered and shut down. “This is something that we will be facing for a lot of years,” Furman says.

These are just a few small examples of the past few days.  The big question remains: When all is said and done, how much impact will Superstorm Sandy have on local businesses and the wider economy? How much has been lost during these days? Disaster modeling company Eqecat estimates Sandy caused up to $20 billion in insured losses and $50 billion in economic losses. According to the Insurance information Institute, Hurricane Sandy now ranks as the fourth-costliest catastrophe ever in the United States, behind 2005’s Hurricane Katrina, the September 11 attacks of 2001, and Hurricane Andrew in 1992.

With so many of our gases and welding customers feeling the impact, what will this mean for our businesses going forward?

 

 More on Emergency Prep and Disaster Planning
Awaiting the Storm’s Price Tag

Video:   How Small Businesses Can Rebuild After Sandy 

Distributors Develop Emergency Action Plans

Six Lessons from Hurricane Katrina

PHMSA’s Emergency Response Guidebook

 

“No Problem”

Friday, October 5th, 2012

I don’t know what is going on with customer service lately.   The next time you purchase something, or ask a question, or request a service, listen for the response.  

 Me:  “I’d like to purchase that television.”  Clerk:  “No problem.”

 Me:  “Would you give me directions to the shoe department?”  Clerk:  “No problem.”

 Me:  “I believe you gave me the wrong bag.” Clerk: “No problem.”

 Me:   “I’d like to order the lobster with that fine (expensive) bottle of wine.”  Clerk: “No problem.”

 Me:  “Thank you.” (after purchasing $182 of groceries, handing over cash and receiving change).   Clerk:  “No problem.” 

 How did the words “no problem” become the go-to response from service providers?  How did it get to this point that the service provider uses words that make me feel like I, the customer, have done something wrong, created a “problem” and they are graciously telling me “not to worry about it”?

After interviewing Service Technicians from gases and welding distributorships across the country (See article in September’s Welding & Gases Today), my faith in customer service has been restored.  These guys often deal with customers in crisis, as an equipment breakdown has a domino effect, usually ending at the sales numbers. 

So when a customer needs it fixed, they need it fixed right now.   Service Techs get this. And they do everything they can to get the customer up and running, as fast as they can.  Most of them will say they gravitate toward the broken equipment no one else can fix.  They like figuring things out, working on complex challenges. Hearing the words “nN problem” from a gases and welding service technician is met with relief. 

Independent distributors are quick to say that their customer service sets them apart from the competition. Listen to how your employees respond to customers.  They’re saying words like “Thank you,” “You’re welcome,” “Can I help you” rather than “No problem.”  Why?  Because they know that customer service does set the company apart.

So as I fork over a thousand dollars and change to the clerk at the electronics store for a new TV, and he responds with, “No problem,”  I will sigh and hope that this fad goes away like other words (remember the overuse of “paradigm,” “buzzword” and “sea change”).  

Perhaps I’ll ask him, “Why would it be a problem for you to accept my money, answer a question, or provide customer service?” and hope he can explain it to me.

Tips From A Distribution Industry Veteran

Friday, February 11th, 2011

Yesterday I tuned in to a webinar by distribution industry veteran Gary T. Moore. Moore spoke at GAWDA’s 2004 Spring Management Conference and has written a few articles for Welding & Gases Today. His webinar was called “17 Tips for Selling Through Distributors,” and it focused on the supplier-distributor relationship.

As an industry observer, I have a lot to learn, and I found Moore’s talk to be very enlightening in gaining a better understanding of the dynamic between distributors and suppliers. While Moore’s presentation was directed to the supplier perspective, many of his tips are beneficial for distributors and suppliers alike.

Moore describes the manufacturer-distributor relationship as a symbiosis, which is defined as “the intimate living together of two dissimilar organisms in a mutually beneficial relationship.” The key words in this definition are “dissimilar organisms.” Distributors and suppliers have different drivers, and there’s no getting around it. However, through effective communication, this relationship can grow and be mutually beneficial.

One of the most important forms of communication is feedback. Both distributors and suppliers need this communication from each other. While surveys can be good forms of formal, quantifiable information, one of the best ways to get a good response is by picking up the phone and asking open-ended questions such as, “Where are we coming up short?” This helps to generate more productive feedback and provides clear areas that need work. Distributors can facilitate feedback by giving follow-ups on sales leads provided by the supplier to help them determine the effectiveness of their efforts.

Recognition is another important form of feedback, and should be done regularly, whether it’s through a simple e-mail, acknowledgement in a newsletter or a formal award. Copying bosses and co-workers on recognition e-mails is a nice way to make sure others know about an accomplishment.

As Moore puts it, people want to do business with people they like, believe, understand and trust. These are a few of the ways to help distributors and suppliers build this trust and work together to deliver more value to the customer and to each other. For more tips, check out Moore’s article, Managing Your Supplier Relationships.

Sales Advice From Another Industry

Thursday, October 7th, 2010

Sales Target, photo courtesy of CasitoLast week, I wrote about my tour of Syracuse-based distributor Haun Welding Supply. This week, I tagged along with some of my colleagues for a tour of Liftech Equipment Companies, a distributor of material handling and construction equipment.  President Joe Verzino took the time to show us around, and was glad to answer all of our questions. Although not in gases and welding industry, the company has some very innovative strategies that I think translate across markets.

Verzino explained to us that Liftech’s outside salespeople have a limited number of calls they can make. For his salespeople, it’s around 6 per day, between the time it takes to travel and really take care of each customer. At 6 a day, that’s 1340 sales calls per year. With limited appointments, salespeople can’t waste a lot of time on cold calls; they must maximize every opportunity.

Instead of leaving it up to the salespeople to find all of their own customers, Liftech created a new position—now filled by a former sales manager—who creates a list called the “Top 200.” The list starts off with their “1:2” accounts, consisting of current customers. These accounts have about a 50% chance of leading to a sale. Next are the “1:4” accounts, which include dormant accounts and former customers, and figure to have about a 25% chance of a sale. As customers drop off the Top 200 list, it is populated with leads from the internet, advertising, attending trade shows, manufacturer recommendations and so on. Salespeople get the greatest return by focusing on this list.

By keeping to 1:2s and 1:4s, Liftech avoids the “1:14s,” the name it gives to completely new accounts who have never done business (cold calls). In addition to getting the most out of the call, Verzino says the practice has helped them expedite the time it takes to get their outside salespeople successfully selling.

What do you think? Could something like this work for your company? How does your company maximize the outcome of sales calls?

What You Need To Know About Airgas vs. Air Products (Part II)

Thursday, September 9th, 2010

AirgasThe Airgas/Air Products war wages on. This week Air Products upped its offer by $2 a share, bringing the offer that started at $60 per share up to $65.50 per share. Shortly after, Airgas promptly reviewed and rejected the offer.

But this will not go on forever. Air Products CEO John McGlade says the company can take a hint: “If Airgas shareholders do not elect these three nominees and approve all of our proposals, we will conclude that shareholders do not want a sale of Airgas at this time—and we will therefore terminate our offer.”

But if you ask Airgas’ Peter McCausland, he’s not buying it: “We believe that Air Products’ threat to withdraw its offer if Airgas stockholders do not elect its nominees and approve its By-Law proposals is just another coercive tactic designed to facilitate the acquisition of Airgas at the lowest possible price.”

Just when it looked like a vote on September 15 could definitively determine Airgas’ fate, the situation is back up in the air. The latest subtext of the back-and-forth is that Airgas may seek other suitors. Says McCausland, “If the January Meeting Proposal does not receive support from a majority of the votes…our Board will explore all available alternatives to the grossly inadequate Air Products offer in order to enhance stockholder value.” According to Bloomberg, “alternatives” typically involves soliciting bids from other potential buyers. Could Airgas be up for sale?

If it seems as though Air Products will not give up, it may be because of the two companies’ history. Air Products sold its U.S. packaged gas business to Airgas in 2002. Now Air Products wants it back, by way of purchasing Airgas. McGlade explains, in a letter to Airgas employees:

“You might be wondering why we are looking to return to the U.S. packaged gas business now. In 2002, our U.S. packaged gas business had limited breadth and scope and at that time, we examined our strategic priorities and decided to exit that business in order to focus on other areas where we could grow and improve our company. Over the ensuing eight years, both Air Products and Airgas have grown significantly, and as we look to the future, we see packaged gas as a growth area for Air Products, both within North America and internationally.”

Even if you do not have a direct stake in this, the potential of a merger could have serious implications for the competition. John McGlade, in a letter to Airgas employees states, “The combined company would be the largest industrial gas company in North America and one of the largest globally.”

What impact do you think this will have on your company?

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Making Sense Of The Battle For Airgas

Tuesday, August 31st, 2010

If you’re anything like me, you don’t know what to make of the controversy between Airgas and Air Products. Air Products has been trying to acquire Airgas for about 10 months, and everything seems like a carefully played chess match leading up to Airgas’ annual meeting on September 15. As it approaches, I’ve been trying to get a grasp on everything that has taken place.

The feud has now made its way into a New York Times blog from UConn Law Professor Steven M. Davidoff, which dissects the latest moves by each party involved and their potential implications. Why did Airgas send a letter to the Delaware court? Why exactly is Air Product proposing a bylaw amendment to move Airgas’ next annual meeting all the way up to January 2011? Davidoff puts it in terms you can wrap your head around. NB – It’s infused with Davidoff’s opinion, so don’t take it all as fact.

Last week, Airgas sent a letter to its shareholders stating, among many other things, “If Air Products truly wants to acquire Airgas, it knows what to do. It must offer a price that fairly compensates you—our stockholders—or terminate its efforts.”

The NYT blog brings up an important point that seems to draw on this statement: “Whether Airgas intended it, the events of this week tell the market that it certainly is for sale at the right price.”

Is a takeover imminent? What impact do you think it will have on other distributors if it happens?