Fittings 02

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FittingsNo. 2

Autumn 201130 min. update

Surveyswill help us in the battle to gain crucial market share

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Plumbinglike Cretan engineers

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Takemehome

a publication

iPhoneWin an

Quiz onback page

We take customer satisfaction very personal

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Fittings issue 2 · distributed OctOber 2011 · Fittings is the employee magazine for Wolseley CE staff in Austria, Switzerland, The Netherlands and Luxembourg. Publication by Wolseley CE. Circulation: 2,300. Available languages: English, German, Dutch, French and Italian. editorial responsibility: Wolseley CE/Charlotte Gullach Büttrich. Journalistic production and project management: Radical Communica-tions/Patrick May. design and layout: Appetizer/Simon Johnsen. Photography: Das Buro/Emil Lyders, Peter Lous. Print: Trykcentret. editorial committee: Wasco/Sacha Büchele, [email protected]; ÖAG/Julia Rees, [email protected]; Tobler/Jacqueline Made, jacqueline. [email protected]; CFM/Peter Broecker, [email protected]; Wolseley CE/Tobias Roser, [email protected]

To geT a better idea of how we can improve FITTINGS magazine, we conducted a reader sur-vey. We interviewed a representative selection of 35 readers from ÖAG, Tobler, Wasco and CFM. We asked them 14 ques-tions, including what we could do better. It be-came apparent that the cover of the magazine didn’t necessarily signal a publication that was an employee magazine. In fact, the survey partici-pants indicated the mag-azine had the look and feel of a general-interest magazine. So we made some minor changes to the cover. Survey partici-pants told us they would like to read more about how things are done in other countries; espe-cially things they could use in their own job. Fur-thermore, they said they wanted more informa-tion about the organisa-tion, about Wolseley and

about how we are doing in the market. Not eve-ryone reads FITTINGS. Some survey partici-pants thought it was chaotic, some thought the language was dif-ficult, while some peo-ple spent half an hour or more reading it. Some readers loved the lay-out and thought the lan-guage was very acces-sible. As we progress with FITTINGS, we will learn how to improve the content and layout and make the magazine in-teresting and relevant for everyone in CE. You can help us by telling us what you think. What you would like us to im-prove. But also what you really like - so we do not run the risk of fixing what is not broken.

Happy readingYou can write to Charlotte at [email protected]. Feel free to share your ideas, comments - both positive and negative.

The best possible magazine

Charlotte gullach Büttrich

Chief Editor [email protected]

Tobler +41 44 735 50 00CFM +352 4995-1Wasco +31 88 099 5000

OÄG +43 50406 0DT Group +45 39559700Wolseley +44 118 929 8700

USEFUL NUMBERS

Ask ole – Anything you like

Contemporary plumbing is a Cretan legacy

We take customer satisfaction personal

A solid strategy for customer satisfaction cannot stand alone. Its success is highly dependent on delivering on the promises that we make to our customers.

Private Label margin busters

Ideas@work

A green initiative and sharpned sales skills

Fittings Quiz

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Surveys will help us in the battle to gain crucial market share

What goes out, must come in!

P 4 5PLA

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STA

FF M

AX 45% OF MARGIN

Organisation

At the request of many of our readers, we have created an illustrative overview of the DT Group and the Wolseley

organisation, showing where CE fits in. Ce

at a glance

Cee, Central and Eastern Europe, has lost an E and from now on is referred to as CE, Central Europe. With operations in Austria, Switzerland, the Netherlands and Luxembourg. There’s no representation whatsoever in Eastern Europe, so the change of name makes sense.

Cee loses an ‘e’ and becomes CE!

Wolseley Staff: 47,000 Branches: 4,118 Countries: 25

UK Business units: 10 Staff: 10,100 Branches: 1,486

WolseleyFrance

Business units: 9 Staff: 8,300 Branches: 697

Wolseley usA Business units: 9 Staff: 16,900 Branches: 1,241

canada Business units: 4 Staff: 2,600 Branches: 220

DT Group Business units: 11 Staff: 9,000 Branches: 474

NorthWolseley

America

Central Europe

Eastern Europe

Nordics

Wasco Staff: 357 Branches: 26

(The Netherlands) Tobler Staff: 720 Branches: 40

(Switzerland) CFM Staff: 114 Branches: 2

(Luxemburg)

ÖAG Staff: 838 Branches: 48

(Austria)

3Fittings 2 · 2011

We knoW from experi-ence from other business units that satisfied cus-tomers are good for busi-ness. They buy more and we get better margins from them. So custom-er satisfaction is impor-

tant for profitable growth. Therefore, it makes perfect sense to focus strongly on customer sat-isfaction. In Wolseley, pe-riodic surveys are used to actively improve custom-er service and customer

satisfaction. Overall sat-isfaction scores have con-tinued to improve across all businesses in the last 18 months. We are also starting to see progress in customer service in CE. In CE we’re dividing the re-

will help us in the battle to gain crucial

market share

You can always improve. But it also helps if you have someone who can help you to prioritise improvements. And it really helps if that someone is the one you’re working hard for – the customer. At CE we put a great deal of effort into finding out precisely what our customers think of us. We conduct

surveys to get an insight in what they want us to do better. Moreover, we are get-ting better at linking survey results to actions that make a real difference.

Surveys

geoffrey BarrancoCe

4 Fittings 2 · 2011

sults by regions. In all we have defined 20 regions. We can compare the re-sults from each region and those regions that have lower scores can learn from the regions that have higher scores.

Tobler bestTobler customers are the most satisfied with our services (70%), where-as there’s room for im-provement in CFM (31%). “What is important when looking at the results,” explains Geoffrey Bar-ranco, responsible for the survey from a CE per-

spective, “Is that there’s an improvement in sat-isfaction for every survey we conduct. So it’s good to know what exactly our customers are satisfied with. What they think we do very well and what they think we can im-prove. What they think is important for them too. Learning what they priori-tise helps us to prioritise our efforts.”

The survey included

a lot of questions where customers were asked to rate a specific aspect of the business on a scale of 1 to 7 (1 = very poor and 7 = excellent). For exam-ple, how competitive cus-tomers think we are and their experiences with our product range. “This,” Geoffrey says “will help us to understand how our customers perceive us.”

The survey also allows for comments, giving sur-

vey participants the op-portunity to share their frustrations, wishes, likes and dislikes. This has proved extremely valua-ble since customers bring very specific problems to our attention. “We make sure that the comments we get end up with the

The best advice comes from the people that matter most to us: our customers

Spot on

Ce has around 20,000 cus-tomers in total. Once a year, we intend to ask each and eve-ry customer about their opin-ion on the service we provide. In the latest survey, 6,273 cus-tomers were contacted by e-mail. The overall response rate

was 1,694 customers, which is 27%. Geoffrey Barranco, re-sponsible for the project, is sat-isfied with the response rate. “It means that more than a quar-ter of our customers responded to the survey. There’s room for improvement though. Our da-

tabase can become a lot bet-ter. We still have some generic e-mail addresses in our cus-tomer database, like info@ or contact@. Personalising these addresses, will improve the re-sponse rate.”

First run of quarterly surveySurvey facts

the survey conducted in ce was based on a similar survey by stArK in denmark. stArK has been using the survey for several years with great success. using the same survey cross-business unit allows us to compare the results but also to learn

from one another. this will help us to both continuously improve the survey pa-rameters as well as how we deal with the results from the survey.

Frequency How many times a year

total no. of customers

total no. of customers mailed (first run of quarterly survey)

response rate

2 - 4

20,000

6,273

27%

4

6,500

1,685

22.7%

2

6,000

2,949

33.5%

4

5,500

1,365

20.2%

2

600

274

17.5%

Ce ÖAg Tobler Wasco CFM

More on next page

5Fittings 2 · 2011

It would be nice if we were able to order later in the evening for next day delivery

CFM Availability on the phone and in-formation on new products.

What could ÖAg do better?

What could CFM do better?

sales reps that are re-sponsible. They call the customer promptly and solve the issue. This is a perfect way of identifying and solving frustrations of our customers that we otherwise would not have been aware of. It also shows our customers that we take them seriously. In Austria, some custom-ers have noticed issues with product availability.

There is a risk that those customers end up buying from our competitors. So by calling and explaining the situation to them, we make them feel confident that we have the situ-ation under control and that the past mistakes won’t happen again. It’s an effective tool to gain back market share.”

Linking satisfac-tion and salesA logical next step will be to link survey data with sales data. Once that

70% are very satisfied with the service they get from

Tobler

Roy geeRkIng (31), sales rep for Wasco in the northern region of The Netherlands, has been with the company for 13 years. “I think it is great we do customer surveys. The comments we get from customers, are very specific and therefore easy to follow up on. For example, I called a customer who had commented that it is hard to surf our web-site. We agreed to meet where I showed him how to navigate. This solved his problem.”

Learning that prod-uct availability, prod-

uct range, delivery and helpfulness are ranked high when customers judge our performance, it is obvious that cus-tomer satisfaction is not just the responsibility of the sales force.

“Sometimes the comments are of a na-ture that require in-volvement from col-leagues in for example logistics or distribution. I had a customer who commented about dam-ages done with the de-livery of his supplies. I called him immedi-ately and he thought it was great that he could

share his frustration with me. Afterwards I took this up with my colleagues from logis-tics and we agreed upon a solution to avoid this.”

“The frequency of the survey, four times a year, I think is ok. Of course we do not ask the same customers all of the time but I think they appreciate it too. Especially when they can see that afterwards we do our best to solve their immediate issues and improve on the pa-rameters that they think are important.”

Customer satisfaction is a shared responsibility

Continued


Spot on

The FeedBACk confirmed that for many customers, the choice factor ‘Price’ continued to rank relatively low on their list of priorities, behind product avail-

ability, staff knowledge, next day delivery and breadth of product range. It shows that some cus-tomers are willing to pay more for these services. We asked

customers what the most impor-tant criteria are for them when buying at a wholesaler. Below, in order of importance, you can see how they answered.

is what the customer prioritisesThIS!

geoFFRey adds: “For our small customers who have no stock holding facilities, we have to have the items on the day they need them, otherwise they cannot work. Not working hurts them in their wallet, so no wonder they priori-tise product availability. Providing next day de-livery and a wide product range should be seen

in the same light. Obviously, we have to real-ise that they will not wait for us – they will get the items from a competitor instead. Many of our customers also purchase from two or three competitors. It is crucial that we are the cus-tomer’s preferred supplier and that they do most of their purchasing with us.”

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CFM ÖAg Tobler Wasco

Sales staff knowledge and helpfulness

Productavailability

Lowprice

Wide productrange

Next daydelivery

The full order isdelivered first time

Location and numberof branches

Productavailability


Next daydelivery

Wide productrange

Lowprice



Productavailibility

Next daydelivery


Wide productrange


Lowprice


Next daydelivery

Productavailability

Wide productrange


Lowprice



link is established, we can see whether satis-fied customers do indeed buy more and/or are high margin customers, just like in business units like STARK in Denmark. This information will help our sales reps to have quali-fied dialogues with sat-isfied customers that for example buy less than

15% of their entire sup-plies from us. After all, if they are satisfied, we would expect them to buy more from us. We know that customers that have a low share with us tend to focus on price

More on next page

7Fittings 2 · 2011

Wasco has 55% ambassadors, 34% neutrals and 10% negatives. 75% of the ambassadors and neutrals said

they would place their very next order at Wasco.

The MAjoRITy of ques-tions required the customer to rate his/her experience of a cer-tain service parameter. For ex-ample the experience with con-tacting staff - are they easy to reach? - or their experience with the competence of staff - are they knowledgeable? They

of course were also asked to rate how they in general feel they are treated as a customer. The rating system that is used is from a scale of 1 to 7, where 1 = poor and 7 = excellent.

The accumulated ratings are illustrated below. Satisfied customers, also called ambas-

sadors, we know, are good for business and profitable growth. Ambassadors are likely to buy more from us and give us a bet-ter margin. The illustration be-low tells us what part of our customer database are ambas-sadors, neutral or frustrated.

Identifying ambassadors

Tobler ÖAg Wasco CFM

71 60 55 33

27 28 35 362 12 10

31

Ambassador Neutral Frustrated

It is only natural that satisfied customers want

to buy more from us

only, whereas loyal cus-tomers value our services and tend to buy the full product range. If the data shows that the satisfied customer is a low-mar-gin customer, we know there’s elasticity in the price and that we should try to revise prices. Link-

ing survey and sales da-ta, in the end, will help us improve both sales and margins.

Continued


News

PoP ICon Madon-na was probably the first to discover the conven-ience of using a headset while work-ing. The head-set freed her hands and allowed her to dance on stage - not hindered by wires.

At Wasco, the pickers in one of the three distribution centers, have con-verted to headsets for the same reason. The alternative is to either

pick from a piece of paper or from a hand-

held device. Be-ing told over

the head-set what to pick and where to pick it,

should de-crease errors

and increase productivity. This au-dio approach is a con-sequence of Wasco’s use of Locus, a new warehouse manage-ment system, which was installed earli-er this year. The new system’s features and improved usability will deliver improved

accuracy and pro-ductivity in the ware-house.

The introduction of Locus is a huge suc-cess. It’s a large pro-ject with a significant impact on both people and processes. The implementation went smoothly and was unnoticed by Wasco customers - which is

an accomplishment in itself. There’s a few necessary adjustments but this is merely fine tuning to get the op-timal effect out of Lo-cus. Wasco’s other two warehouses (Twello and Rotterdam) are also due to implement Locus but it has not yet been decided when this will happen.

headset

ToBLeR is defi-nitely a first mov-er within Wolseley when it comes to E-commerce. A whop-ping 25% of all orders come from the web-site. The website was given a facelift this summer and navigat-

ing around the site is now much easier because of the im-proved structure and the way information is grouped around us-ers, with a simple but tight and clear design. The webshop is only one click away.

Tobler launched improved website

picking at Wasco

9Fittings 2 · 2011

Askole

In an organisation with more than 2,000 people, the top management may seem

very distant.

ask ole is an initiative to decrease that distance considerably. You now have

the opportunity to ask ce’s most senior manager, ole Mikael, a burning question.

Don’t let this chance pass you.

would you like to ask Ole?What

ConSIdeRIng both the size and the geogra-phy of CE, it is impres-sive how much informa-tion I get. It’s hard to tell whether all of the rele-vant information reach-es my desk but I can as-sure you that a lot of effort is put into cap-turing the relevant and important information.

Some of it comes in the form of hard-core figures from our monthly finan-cial reports. These re-ports provide an exten-sive overview of tangible parameters and as such they’re a good indicator of how we’re doing. I get all general correspond-ence, also newsletters - like for example The

Wascourant from Was-co - that is sent to staff and even though I am not able to read every-thing, it gives a good in-dication of what is going on. I have regular meet-ings with all of the direc-tors of the business units where we discuss the business. On top of that I visit the various business

units. Recently I visited Sixmadun, part of Tobler, in Switzerland and Was-co’s distribution centre in Rotterdam. On business-critical projects, we put extra focus on ensuring decisions are anchored in the organisation. Last but not least, I think that Fittings is a splendid platform for dialogue.

how do you keep yourself informed about what is going on on the workfloor?

yeS. But on-ly to the extent where it is rele-vant. We consid-er first and fore-most what the customer wants. The Comfort line (edit: read page 16 and 17) is a good exam-ple. Of course, we are also in-terested in get-ting the best out of the synergies

that collaboration in CE - Wolse-ley provides. We work with differ-ent suppliers on different markets and have dif-ferent prices. It makes sense to compare prod-ucts and prices and make sure we get the best prices on all of the products we sell.

Are we going to sell each others’ products?

1

2

... Anything you like


Send your questions to [email protected] and we will make sure they are answered. Don’t mince your words – you will remain totally anonymous.

We hAve two dif-ferent kinds of show-rooms, which address our customer needs and our customers’ customer needs, re-spectively. It is gen-erally accepted that showrooms support sanitary sales but we do not apply a one-size-fits-all strategy

because we operate in different markets with different customer groups and cultures. In Holland for example, the use of showrooms is common practice, whereas in Switzer-land, where we just entered the sanitary market, sanitary solu-tions are sold without

the use of showrooms. The insights we ap-ply to our showrooms come from both in-side and outside the organisation. In Eng-land for example, our colleagues work with a couple of interesting concepts and we might be able to use these concepts in CE as well.

We WAnT to hold on to our existing cus-tomers. Therefore it is important that we know how they per-ceive us. They val-ue us for our ability to support them in their businesses. Ask-ing them what they think we do well and what we could do bet-ter helps us to priori-tise. For the surveys to have any sort of impact, we have to follow up on what our customers want. This differs from location to location, depending on the points of action

the customer shares with us. By investing in these surveys we are able to develop our business to meet the requirements of our customers.

What is our strategy on showrooms?

Why do we invest resources in customer surveys?

SuRe you CAn. We have always had a strong focus on customer sat-isfaction. Surveys help us to adopt a more systematic approach, which I con-sider to be a positive development. We

can learn which parameters in our con-cepts, service and approach customers prioritise when they choose us and they show us where there is room for im-provement.

Can you measure customer satisfaction?

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11Fittings 2 · 2011

SInCe TheSe instal-lations do not require any welding there’s no danger of damage from heating and plumb-ers save precious time. Welcome progress in a sector dominated by traditional craftsman-ship.

The history of plumbing goes back four thousand years ago. The Minoan Pal-ace on Crete is the old-est known structure to have sewerage and wa-ter pipes. All the piping was hidden from view in the walls!! just like it is today.

Plastic pipe systems that are used with press fittings are increasingly popular among our customers because

they are safe and quick to install.

The ToILeT. By some also re-ferred to as the throne. Available in many different shapes and colors, although the major-ity of people pre-fer toilets that are very simple and white. Not a very sexy invention at first glance. Yet one of great importance. The toilet goes back to 2100 BC, when the Egyptians started using seated toi-

lets. In 1596 John Harrington invent-ed an indoor wa-ter closet for Queen Elizabeth I and in 1775, the flush toi-let as we now know it, was invented by a London-based Scottish watchmak-er called Alexander

Cummings. Except for a few cosmetic changes

and some minor techno-logical improvements - the flush toilet design has remained the same.

Comfortably seated

is aplumbing

Contemporary

Cretanlegacy

Read more aboutsanitary products

on page 18


27%Multilayer

34%Plastic 32%

Copper2%St. Steel

5%Steel

The story of

The Romans contin-ued this tradition, build-ing enormous viaducts to supply their cities with water. They built massive sewage sys-tems under cities as well, which up until the 19th century, rivaled modern city sewage systems.

Unfortunately, most of this technology was lost after the fall of the Roman Empire and it was not until around the 16th Century that Europe would rediscov-er the principle of hav-ing municipal water and sewerage.

comes from the Latin word for lead, which is

plumbum

Plumbing

FoR MAny centuries, lead was the favoured material for water pipes because of its malle-ability. Lead poisoning was a ma-jor health hazard, its effects in-cluded stillbirths and high rates of infant mortality. The use of lead pipes was common prac-tice among the Romans but they were rarely poisoned because the Roman water had so much cal-cium in it, that a layer of plaque prevented the water from con-tacting the lead itself.

Copper has a combination of properties that make it quite unique. It is capa-ble of withstanding extremes of heat. It is resistant to corro-

sion and high water pressure. It doesn’t burn, it keeps its shape and strength in high temperature environments and it gives long life in service. Copper is bacte-riostatic, it inhibits the growth of bacterial and viral organisms in water systems. But it wasn’t until after WW2 that copper became the standard plumbing material in most European countries.

expensive copperIn recent years, the price of cop-per has risen dramatically. Due to the increase in the price, alterna-tive products like PVC press sys-tems are increasingly popular. Moreover, plastic is a lot easier to

use. As a result, the market for these alternative products is growing at a steady rate of 10-15% a year.

First lead, than copper

The use of copper has declined in recent years as markets move to Plastic and Multilayer. The UK is

the biggest copper market in Europe, with Ger-many second. Copper still constitutes around

70% of the UK market.


A solid strategy for customer satisfaction cannot stand alone. Its success is highly dependent on de-livering on the promises that we make to our cus-tomers. Whether you work in logistics, administra-tion, distribution or in sales - it’s important to realise that you can contribute positively to customer satis-faction every single day. In this issue, we interview three extremely passionate sales reps from Switzer-land, the Netherlands and Luxembourg about the secret of their success.

customersatisfaction

We take

personal


Resume

LudWIg is respon-sible for supplying 150 small and medium-sized installation com-panies. “150 customers means a hell of a lot of phone calls every day,” Ludwig says with a smile. “Either to follow up on on-going busi-ness or to pro-actively try to interest custom-ers in buying new sup-plies. We have spe-cial monthly offers and knowing my custom-ers well, I know exact-ly what customer I can approach with what ac-tions.

“This is a peo-ple business,” Lud-wig explains, “and the strength of the rela-tion you have with your customers defines your success. 60% of my customers are one-man bands. Our service to them is crucial.If we

screw up, they have a problem with their cus-tomer. Small plumb-ers don’t have offices. I meet them often on site, where they are working on projects for their customers. I like that a lot as it gives me

a good understanding of what they are deal-ing with when they’re on the job. That helps me give them a more relevant service.”

“Larger companies often have a strong-er focus on prices. Ne-gotiations with them

are about nickels and dimes. Smaller custom-ers don’t focus on price as much. Therefore we are able to get bet-ter margins from them. The relations I have with the smaller cus-tomers is more person-

al. We often talk about private stuff too. Not that I mind. Not at all”.

“The strongest as-pect of my relation to-wards our customers is my honesty. If things can’t be done, I will tell the customer. If we make mistakes, we ad-

mit them and we clean up. We got very use-ful comments from our customers during the last customer sur-vey. For example, that our sales people at one specific branch were hard to reach. I took this up internally and by regrouping some of the responsibilities, we have solved this issue. At Wasco we really lis-ten to our customers. I am aware that our com-petitors probably will tell you the same but with all due respect; I feel that this really is our strong point. We listen and we act. That gives us an edge on the Dutch market.”

If we screw up, they have a problem with

their customer

Mastering the art of listening

Name:

Where:

Age:

Years:

Function:

Ludwig Hup

Wasco

29

4 years

Sales rep


dAnIeL hAS been a sales rep in the beauti-ful Basel area serving 120 customers for the past six years. “I love my work, I love Tobler”, Daniel tells us. “Before I started with sales, I spend ten years work-ing in a warehouse and afterwards ten years as a service technician in Sixmadun, servicing the heating installations we sell. Being able to work with widely differ-ent challenges makes Tobler an attractive em-ployer.”

“I know the compa-ny well and I know ex-actly where to go if I need to get something done. When custom-ers experience a prob-lem, I make sure it gets addressed at the right

place. That way our customers do not have to find out for them-selves where to go with their problem - which in a large organisation like Tobler can be frus-trating.”

“80% of my turno-

ver comes from 20% of my customers. When I visit a customer, he or she is the most im-portant customer there is, regardless of size. Some customers re-

quire more support than others but what they all have in common is that if they need support, they need it immediate-ly. When they are work-ing on a job at a cus-tomer and they realise that they lack a specific

item, they can’t con-tinue until they have it. That’s where you real-ly can prove your worth because if you can help them out here, they will not forget you.”

“When you have a personal relation, you need to nurture that re-lation. This also means that whenever possible, you should react on is-sues before they grow into problems. Before I went on holiday, one of my customers ordered a radiator. When I came back, I saw that I had ordered the wrong one from our supplier. The only right thing to do was to call the custom-er immediately and tell him about the mistake. Order a new one and make sure it won’t hap-pen again. The custom-er will forgive you when you make mistakes but he won’t forgive you if you don’t take responsi-bility afterwards.”

If they need support, they need it

immediately

Help them when they are in trouble

Name:

Where:

Age:

Years:

Function:

Daniel Rudin

Tobler

46

26 years

Sales rep


Resume

Benny IS responsible for sales in the CFM’s stores in both Esch sur Alzette and Luxem-bourg. In the shop in Luxembourg, four sales staff cater to mainly pri-vate customers. Where-as in Esch, three sales staff serve customers who are mainly profes-sionals.

“Naturally, pri-vate customers do not have the same level of knowledge yet they take on semi-profes-sional projects to save money or time. As a result they need guid-ance. The reward is sig-nificant because we get better margins from pri-vate customers. On the other hand, profession-als are our most im-portant customer seg-ment.”

If it was up to Ben-ny, nobody would ever leave either store with-out making a purchase.

“Our stores are not par-ticularly inviting for the casual customer,” Ben-ny explains. “Custom-ers coming here are on a mission: they want to buy something. As a salesperson you have to be able to read the

customer: is he looking for guidance, does he want to look around by himself - what kind of customer is he? Either way, it is important that you can adapt to the situation. You decide whether the customer will leave empty hand-ed or with a bag filled with CFM products.”

“Listening,” Benny says “is in my opinion the most important skill as a sales person. The customer needs to feel that you are dedicat-ed to solving his prob-lem. On a Tuesday you might spend 15 minutes

to find a screw that he lacks to get on with his project. But the same guy might come back Monday next week and buys an entire bath-room worth € 30,000 or more. He does that because he can still re-member the fine treat-ment he got when you found his screw.”

“What the customer sets out to buy, is not always what he leaves the store with,” says Benny. “You should not underestimate your own influence here. A cus-tomer might tell me he doesn’t want to spend more than €10,000 on a bathroom. You should show him the basic sanitary line because this is what he asks for. But showing him alter-natives and highlight-ing the advantages like saving water and in-creased durability gives him new ideas. Ideas he would not have had if you hadn’t planted them there. In the end, he might decide that your suggestions are a lot better than his origi-nal ideas and he leaves the store with an order of maybe three times the planned amount.”

Customers coming here have a mission: they

want to buy something

Nobody leaves here empty-handed

Name:

Where:

Age:

Years:

Function:

Benny Lauterbour

CFM

39

20 years

Sales manager


TyPICALLy, products that are sold by a whole-saler are brands owned by a manufacturer like Hans Grohe or Grundfos. A private label is an ex-ception. Here the whole-saler, CE, commissions the production of its own products and sells them to their customers under their own brand name.

Comfort is one of those brands - which is both a sanitary line (ÖAG and Tobler) and a heating line (Wasco).

ÖAG’s experience with Comfort dates back to 1982, when Comfort was introduced. Today there are around 4,000 dif-ferent items sold under the brand! 80% of all

items are within the sani-tary category. An inter-esting detail is that ÖAG was the first wholesaler in Austria within the in-dustry to introduce their own brand. Comfort is now positioned as a well-respected medium to high-ranged brand, with a staggering 10% mar-ket share and it is grow-

CE is a wholesaler and the business principle behind this is rather simple: we identify, buy, gather, sell and distribute

products relevant for a specific customer segment – in this case plumbers and installers.

Take a peek into the machinery of your organisation and get a better understanding of why and how things happen. Fittings has a backstage pass and we’re happy to share it with you.

Private Labelmargin busters

Comfort:

Backstage

PASS


Backstage

ing faster than all other branded products.

When visiting ÖAG branches in Austria, it is hard NOT to notice Com-fort: approximately 18 metres of shelf space is reserved for the Com-

fort sanitary line, there’s an extended product cat-alogue that is updated every year and on top of that staff are trained to bring the products to the attention of customers. A selection (around 100 products) of the Comfort line will be made avail-able to the Swiss mar-

ket in Autumn. For To-bler this is going to be a completely new experi-ence since they current-ly do not have any sani-tary products (front of the wall) in their product range. It is expected that the sanitary line also will be introduced in Wasco and CFM soon.

ÖAG was the first in Austria

to introduce its own brand

Manufacturer/producer No need to invest in a comprehensive distri-bution network in order to sell their products.

Customer All the supplies they need are available under one roof.

The AdvAnTAgeS of having a private label are manifold. You are in total control of the quality of the product, the logistics, design and probably most importantly - the price. Since the wholesaler is in control of the price, he is also in control of the mar-gin. As a rule of thumb, the margin on pri-vate label products is a much higher. This

makes it interesting for a wholesaler to add private label products to the assortment. If private label products are branded cor-rectly, it has another important advantage: the wholesaler has a product which only he sells and therefore customers that want that specific product, will have to do busi-ness with this particular wholesaler.

private label?

Myth:All private label products are produced in cheap sweatshops and are of inferior quality!

True/False?False: The same factories that produce compet-ing branded products, also produce private la-bel products. They might change raw materials, colour and branding tags, but the machine park, the staff and the quality control is the same. The quality of the raw material is decided by the wholesaler and therefore controlled.

MythBuster

Why


P45 is a relatively new phenomenon in CE - it is however, a well known strategic principle in STARK (Denmark). “You do not need four years of business school to under-stand this,” says Hans-Henrik Ottosen, Branch Manager of K&M City in Copenhagen. “P45 in STARK means that everybody in sales has to achieve at least five times worth his own salery including all costs.”

In the last issue of Fittings, we explained the impor-tance of margin: the difference between the buying and the selling price of a product. Margin is crucial as it pays for all operational costs – including our wages. Equally essential is that we control these costs so that when all of our costs are paid for, there’s money to develop and grow the business. Therefore, we apply a strategic principle called Plan 45. Plan 45 (or P45) helps us balance what comes in – and what goes out.

P 4 5PLA

N 4

5

STA

FF M

AX 45% OF MARGIN

in!What goes out,must come

Mogens PedersenSTARk


Thermometer

everybody knows their tar-gets in STARk“It is important that everyone knows what is expected,” Hans-Henrik explains. “Eve-ry day, I send a mail to staff telling them how much we need to sell for. The goal for today is €55.000. By now (13:00) we reached €75.000. That is €20.000 above tar-get”.

In fact, staff know exactly how much they sell and at what margin. Not only at branch level but also at an individual lev-el. “People in here are competitive,” says Mogens Ped-ersen, Shop Manag-er at K&M City. “They want to outperform their peers where pos-sible. It is our job as managers to make sure that everybody is highly-motivated. We talk with peo-ple who are not mak-ing their targets at an

early stage, so they can adjust their per-formance. Fortunate-ly, there’s not been an issue lately. We’re doing great and have been doing great since the beginning of this year.”

The branch in the south of Copenha-gen recently expand-ed with a modest rental department. “The ambition is that in time we will have the largest rental de-partment in the Co-penhagen area,” says Hans-Henrik. “The beauty of P45 is that there’s a direct link between the money coming in and going out and several ways to meet target. Either more sales/margin or efficiency. If you are not making your tar-gets, you have to re-duce your costs. On the other hand, if you exceed your sales tar-gets, there’s money to reinvest in the busi-ness.”

P45 stands for the main accounting principle

that ‘staff costs may not exceed 45% of

our margin’.

has 40,000 service contracts, which is 50-55% of the business. Support after

breakdowns makes up for app. 25%, the rest of the business is fine tuning and

control of new installations.

Sixmadun

P 4 5PLA

N 4

5

STA

FF M

AX 45% OF MARGIN

SIxMAdun is a company (bought by To-bler in 2000) focusing on servicing heating in-stallations. The compa-ny employs around 200 people of which 150 are specialised technicians. Sixmadun has been growing steadily dur-ing the last ten years but experienced serious challenges when the market started stagnat-ing two years ago.

“Installations need servicing - also in times of crisis,” says Six-madun CEO Thomas Mohler. “But we expe-rienced that customers postponed servicing and business slowed down. The negative choice would have been to cut costs and let people go. Doing so is always tough. But in our line of business it is even more

disastrous because we rely heavily on the ex-pertise of our techni-cians. People with this kind of background are hard to find and it takes two years to educate them.”

Instead Sixmadun chooses to focus on winning back business. Thomas explains: “We diversified our services and offered customers cheaper alternatives, which our customers appreciated. Simultane-ously, we developed a product for new hous-es to come out and fine tune and control their installations. In Swit-zerland, building activi-ties are picking up again but the strong Swiss franc is testing us. We don’t know how this will influence the market yet.”

Increasing sales volume in Sixmadun

Fabio TropeanoSixmadun


Ideas@work

Is Fittings’ non-exclusive white board where we share

ideas from all of the divisions - also the Nordic divisions.

The quality of the idea does not depend on whether your

office is the boardroom or the cabin of a truck. The idea

doesn’t have be rocket science either. On the contrary, we

love practical, applicable ideas that easily can be copied

by others.

ThIS IS Why CFM has committed to a nation-al recycling initiative fo-cusing on decreasing the amount of plastic bags in stores this year.

“It takes the environ-ment 50 years to break down plastic,” explains Project Manager Ben-ny Lauterbour. “The new bags we have in the shops are made from a material that is both ro-bust but also easy for the environment to break down. They come in two sizes and in a single-use variation but they all have in common that they have a far lesser impact on the environment.”

The disposable bag

costs 3 eurocents, the small size bag cost 50 cents and the larger one costs 70 cents. When the recycle bags breaks, the customer can swap it for a new one for free.

It’s an initiative that’s been well-known in Lux-embourg for some years now and customers know

the principles from the large retail chains. It was not hard for customers to get used to CFM’s new way of dealing with bags. “On the contrary, it was the most natural thing for our customers."

Benny points out three other advantages. “In the old days we handed out

free plastic bags. This cost us € 4,500 a year. We save that money now. Our logo was printed on those old bags and some-times they ended up on the streets or worse, in the forest. That is not good publicity for us. By law, the recycle bags have no logo so they can be swapped in any shop that is linked to this ini-tiative. So no more risk of our logo turning up on someone’s discarded rub-bish. Thirdly, CFM was the first in the industry to do this - an initiative our customers appreciate. This has defintely had a positive effect on how customers perceive us.”

A green initiativeGreen these days is synonymous with environmental concerns. An increasing number of people care about the environment, and doing something positive for the environment is appreciated and rewarded – also by customers.

operation save

environment

CFM

Use recycle bags

Customer goodwill,

savings €4,500 a year

Project file:

Division:

Idea:

Result:


Ideas @ work

“The IdeA is simple,” says Southern Nether-lands Senior Banch Man-ager Roger Zinken (37). “Every month we choose a relatively small, easy-to-sell product with a good margin. We had tape, sawing blades, all kind of adhesives - rele-

vant products for our cus-tomers to put as an extra purchase in their shop-ping basket. We show the product on the coun-ter desk - visible to the customers that enter our branches and staff work-ing here. Staff should pro-actively bring the

blockbuster to the at-tention of the customer and that way create extra turnover.”

€66,000 on the bottom linein the first year, block-buster resulted in a turnover of more than €66,000 with a 26.7% margin. “It’s a good re-sult for the first year,” Roger says. “It is equal-ly important that staff in these branches actively sell products to our cus-tomers”

“To stimulate sales, we have a competi-tion. Twice a week I send the results to all of the branches so they can see how they are doing com-pared to their colleagues. Every ten weeks, we pick the winner. The winner gets a trophy. It’s great fun to see how seri-ous some branches take the initiative. It creates a deeper commercial in-sight and it gets them in-to a different kind of dia-logue with our customers as well.”

Sharpen sales skills More than 60 percent of all customers entering a gas station buy a pack-et of chewing gum when pro-actively asked by staff behind the counter. Armed with that insight, during a meeting in Twello with all branch managers, the idea was born to try the concept in all Wasco branches. This is how operation blockbuster ("kassakoopjes") was born.

operation blockbuster

WascoExtra sales at the desk€66,000 on the bottom line,sharpen sales skills employees

Project file:

Division:Idea:

Result:

It is a well-known fact that impulse purchases have a barrier. At Wasco that barrier is €10-15 They have tried with products that were more expensive but then the sales numbers drop dramatically.

€15 is the magic barrier


you

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ay t

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priz

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How well are you informed about what is going on in CE?

Take the test, answer the questions below and ...

Use the coupon below or send your answers by e-mail to: [email protected]

The winner will be announced in the next issue of Fittings

Friday dec 9 2011

Name:

Address:

Zip and City:

Country:

Phone:

E-mail:

Employed at:

1:2:3:4:5:

A B C Send this coupon to:

DT GroupAtt.: Charlotte Gullach BüttrichGladsaxe Møllevej 5DK-2860 Søborg, Denmark

Send your answers at the latest iPhone

Win an

1 What year was Comfort first intro-duced to the Austrian market?

A 1982 B 1988 C 1998

2 What do Ce customers prioritise most?

A Low price

B Next day delivery

C Product avail-ability

3 how many service con-tracts does Sixmadun (Switzerland) have?

A 4,000 B 40,000 C 400,000

4 Which busi-ness unit has the largest number of satisfied customers?

A ÖAG B Wasco C Tobler

5 how much extra revenue did Wasco’s blockbuster operation generate in the first year?

A €86,000 B €66,00 C €56,000

QuizThe lucky winner of last issue’s fantastic prize - an iPad - comes from Switzerland: Pierre-Ma-rie Paccolat (55), is a part of the technical team in tobler in Martigny, switzerland.

“I love hiking in the mountains. Long walks in the beautiful countryside help me to recharge my batteries, so I’m always fit for the fight. I am very happy with my new iPad. I up-loaded all my pictures on the device, which I now easily can share with friends. Thank you Fittings for this unexpected gift.”

The winner is...

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