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Building a Chemical Program

Building a Chemical Program

By Diane M. Calabrese / Published February 2023

Photo by iStockphoto.com/Philip Openshaw

Convenience is second only to quality in what purchasers appreciate when buying. Ensure quality. Then, focus on convenience when building a chemical program.

     “Just like ink to printers, chemical soaps are the constant repeat sale item for a pressure washer purchase,” says Linda Chambers, brand and sales manager at GCE/Soap Warehouse Brand in Norcross, GA. “Here at our company we give out quart samples of cleaners with each new washer sale.”

     Samples of excellent products make it easy for a customer to contrast and compare and decide on a preferred cleaner, explains Chambers. “They can see how our chemicals will benefit them and how well they will work to save them time on the job.”

     A chat with the customer about how the pressure washer will be deployed informs sample selection. “We provide products that the customer would most likely need, depending on the work they are purchasing the pressure washer for,” says Chambers.

     Putting time-tested products in the hands of customers establishes a good foundation for a program. “Keeping your name and products in front of your customers is important,” says Chambers. So is “giving out information about any new products.”

     Contractors welcome information that enables them to work faster and still get the best results. Chambers explains that conversations with customers are very important. “Asking about issues they have been having recently and giving them other chemical solutions that they may not have tried before is part of building a program,” she says.

     Some customers like a particular product or pair of products and do not think much about changing them. A new product may be better. Devise a way to share that information.

     “Explain what some products are able to do that customers may not be aware of,” says Chambers. “Send out information to a long-time customer who only buys one or two products as an incentive to try an additional chemical for their type of work.”

     In building a chemical program, a distributor must be prepared to sell knowledge. There is a hunger for information among contractors and others who use chemicals in conjunction with their equipment. 

     Yet contractors are busy. Anything a seller of chemicals can do to get up-to-date, useful information to them on a routine basis helps build a chemical program because it strengthens the bond between seller and buyer.

     Think of the bond as the mortar that holds together the foundational building blocks: quality products. A well-built chemical program brings more profit to a business, as it also strengthens the industry by strengthening the contractors it serves.

Profiting

     “A properly designed chemical program is critical to sustainable profitability in an equipment dealership,” says Joseph Daniel, CEO at ITD Inc. in Tucker, GA. “Whereas equipment sales are lumpy and low margin, chemical sales are consistent and carry a strong margin.”

     There are efficiencies built into selling chemicals (products) that cannot be had by providing extra service
(an employee-intensive endeavor). The cost and benefit must be evaluated.

     “Service and repair operations rely on managing people; chemical sales only rely on carrying inventory,” ex-plains Daniel. “In short, not building a chemical program to complement your equipment business is a bad decision that is costing you a lot of money.”

     Again, though, it’s back to quality. A manufacturer must be confident in its supplier and a distributor in its manufacturer.

     When there is confidence along the business-to-business chain, it’s easier to keep pace with new opportunities for chemical sales. Adding is building.

     “The key is in partnering with the right chemical supplier who will engage with you to build your chemical line,” says Daniel. “At our company we know the products that are working across the country, and we work to make distributors aware of new directions.”

     Daniel’s company also takes a direct hand in developing products to meet custom requests or new needs. “We work with distributors to create new products to serve niche applications discovered in their sales efforts.” 

     It’s “critical” to listen to customers, says Daniel. For manufacturers, the customers are distributors, who in turn are getting feedback from contractors.

     “Listening to your customers in the field is how you discover new applications and thus growth opportunities,” says Daniel. “The challenge following that is to be able to deliver what is needed, when it is needed, at the right price.”

     Building must be done with top-tier materials. “Working with an engaged chemical manufacturer is the only way to complete this circle consistently,” says Daniel. “Otherwise, you are constantly putting ‘square pegs in round holes’ with your limited and outdated chemical line.”

Partnering

     Building from scratch? It’s all possible with a commitment to get it right.

     “It’s not as easy as it looks,” says David Presley, president of Hydro-Chem Systems Inc. in Caledonia, MI. He cautions that a chemical program entails much, much more than “mixing a few ingredients together, adding some color and scent, and you’re good to go with some effective products.” 

     Complicating factors in a chemical program include regulations, hazardous materials, SDSs, labeling, packaging, insurance, employee and customer safety, liability, and more. Presley says a company may best make an initial entry to the niche by “distributing for a reputable, successful brand that can help you get off the ground the right way.” 

     Novices to the sector must choose wisely and learn from their partner. “Down the road, as you understand the market and the production complexities better and have some fresh product ideas of your own, expanding into production could be a natural move,” says Presley.

     The complexity of selling chemicals—the regulations, etc.—is offset by the way a strong chemical program contributes to the revenue stream. “Chemicals are consumable and have a much shorter and more consistent repeated business cycle than the equipment,” explains Presley.

     “If the chemical is dispensed through the equipment, the chemical can often create an annuitized revenue stream for the entire life cycle of the equipment,” says Presley. “Servicing and caring for the equipment and assuring customer satisfaction provides the opportunity to expand the relationship on other fronts and to create the probability for equipment replacement at the end of its life.”

     In other words, building a chemical program can be a good way to strengthen equipment and service programs. Moreover, the convenience of an all-in-one place for equipment, chemicals, and service is appreciated by customers. 

     “By pairing a chemical program with equipment sales and post-sale service, a total solution can be provided,” says Presley. The customer who gets “a complete solution” has an easier path to productivity. 

     The customer works with one vendor, getting an efficiency boost. The arrangement also “limits variability and the need for additional vendors, which acts as a protective shield for the manufacturer,” says Presley.

     For manufacturers dependent upon suppliers and distributors dependent upon manufacturers, a disruption in a component or a compound can pose a problem. So, the strength of chemical programs has been put to the test since spring 2020.

     “These past few years have really shown the importance of having a great in-house team to procure raw materials and manage inventory,” says Presley. Purchasing has been crucial in searching for the best pricing, timing, and delivery options. New opportunities cannot be capitalized on if the products aren’t in stock.

     It is always difficult to manage margins and pricing, explains Presley. But it’s been “more difficult than ever in recent months with raw material costs changing almost daily.”

     Being out of one raw material needed for a chemical product causes a problem for the seller and the customer.
“We have been extremely fortunate to have creative and dedicated folks on our team that have made great purchasing and inventory decisions to help see us through this crazy time,” says Presley.

     Responsiveness is the cornerstone of any program that serves customers. And a chemical program is built with the same thoughtfulness as other business lines. 

     Talking with customers “across all key vertical market sectors to understand what they value and where their business is going is imperative,” says Presley. “Salespeople in particular need to be tuned into constantly gathering customer feedback and systematically passing it along within the organization to help effect change where it can.”

     Remote communication is fine, but don’t rely on it alone. “When it is possible to interact in person, even greater rapport and understanding can be gained,” says Presley. Information gathered by all interactions with customers brings more insight into their “needs, challenges, successes, and expectations.” 

     Building long-term relationships with chemical customers is a priority, says Presley. That commitment is reinforced by his company’s “set of core values that encourage customer centricity, including ‘doing the right thing’ and ‘being compassionate.’”

     With the customer always in view—at the center of endeavors—the essentials it takes to build a chemical program naturally fall in place, explains Presley. The essentials are a consultative approach, an education about options, proven and supported solutions, and dedication to post-sale service.

     That’s a good list of essentials. Apply it to a chemical program or any program.

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