fbpx

Industrial vs. Commercial and Residential Markets

Industrial vs. Commercial and Residential Markets

By Diane M. Calabrese / Published February 2022

Photo by iStockphoto.com/temis

It can be done. Many members of our industry adeptly serve industrial as well as commercial and residential markets. 

    A distributor and a manufacturer share some of the basics of triple success. (Many contractors also serve three markets by incorporating strategies analogous to those described below.)



     First and foremost, it is possible to serve the three markets and do it well. Sure, there are challenges, such as the need for breadth—and the capital, space, and team members to provide it.

     “It requires a sizable inventory to cover all three markets,” says Roy G. Chappell, CEO of Chappell Supply and Equipment in Oklahoma City, OK. “Residential customers in most cases buy five horsepower to 10 horsepower gas units or two horsepower electric units. The costs to keep these units on your floor will run about $8,000 to $10,000.”

     Of course, contractors themselves may routinely serve residential and commercial customers, and commercial entities often buy equipment for their on-board staff. However, equipment needs and choices are not interchangeable.

     “Commercial customers require a much larger investment to handle the different types of units they purchase,” explains Chappell. “Large trailer-mounted units built up on 10-foot, with tandem axles with a 10,000 lb. gross weight, a 535-gallon water tank, a 35-gallon chemical tank, and an eight-gallon antifreeze tank, [and] one, two or three hose reels” is one example.

     Chappell gives us a few more examples regarding the machines sought for commercial cleaning. “They buy units with six gpm, 3500 psi that will work a single gun; eight gpm, 3000 psi that work with two guns; as well as 10 gpm, 3000 psi. The 12 gpm, 3000 psi units come with three guns and reels.

     “In the summer we try to keep eight of these units built up for rental. In winter we keep 12 to 14 of these units for rental and sale,” continues Chappell.

     Assuredly, the time of year is also a factor in what each market served requires. Consequently, distributors proactively adjust the configuration of their offerings. 

     Well, they do as much as they can based on experience, but sometimes experience alone cannot predict.

     “When it comes to industrial users, it is anyone’s guess as to what their need will be,” says Chappell. “Industrial customer usage may be four to six units tied together—large equipment washing. It goes back to what you will be washing, why this job is so difficult to clean, and how many hours a week you will be washing.”

     Availability of equipment is only half the equation for successfully serving multiple sectors. “Having trained service people to maintain the equipment when the customer needs service” is a must, says Chappell.

     Consider industrial units. “If you have several units like this in the field, it may require two or three service techs,” says Chappell. “Now you have the cost of the trucks stocked with parts.”

     The industrial and commercial markets can be so vigorous in a region that a distributor might not give attention to the contractor serving residential markets. That could be a significant loss of opportunity to generate business: The contractor may one day expand to commercial work and need more equipment. 

     Treat buyers of equipment for residential use well. Use conversations as a chance to provide education on machines.

     “Residential customers start out looking for the cheapest unit they can buy,” says Chappell. “It may last them two or three years. By taking the time to walk them through the strong points of a unit that will cost them 50 percent more or even higher, you get them into a much better unit that will do a better job and faster. Each customer is different.”

     Contract cleaners on residential projects may have a machine that changes operators frequently. That’s another point to discuss.

     “The more people using the equipment, the more it will require a higher quality unit,” says Chappell, “Again, you have to ask questions to find this out. By asking questions, you get them involved in the decision making. How much do they want to spend?”

     Prepare. Anticipate. Educate. Listen. Good advice in all business settings, and especially when serving multiple markets. More good advice follows.

Manufacturer’s Perspective

     Hydro-Chem Systems Inc. in Caledonia, MI, emphasizes an educational approach to provide customized solutions to buyers that include private fleet owners, municipalities, schools, farms, manufacturers, and mobile washers in the United States and Canada. Chad Reiffer, a customer accounts specialist at the company, tells us more about the firm’s way of balancing industrial, commercial, and residential markets.

     “As an industrial manufacturer and supplier serving industrial manufacturing customers, our company understands the importance of adhering to processes and adapting operations,” says Reiffer. That understanding encompasses all dimensions of transactional interactions.

     “Our company has very stringent protocols for our vendors in regard to purchase orders, AR/AP [accounts receivable/accounts payable], delivery schedules, quality control, and conducting operations/site visits due to safety concerns with our chemical manufacturing, machine service, and equipment fabrication,” explains Reiffer.

     To be sure, the company expects the same of itself as it does of its suppliers and contract service providers, says Reiffer. And it is determined to consistently “mirror” those expectations.

     “When seeking new industrial customers, we understand that their cleaning needs may be very broad in scope or very targeted to a specific application,” says Reiffer. “We also must understand that these customers may exist within heavily regulated industries with definitive requirements for the contents of their products, environmental concerns, and OSHA safety protocols.”

     In short, not every customer has the same needs. Some customers have wholly unique requirements. Thus, responding to the individual customer—whether two different commercial fleet washers or two different contract cleaners—is a must.

     “We also understand that some customers can be very cost- and ROI [return on investment] conscious and may operate on a precise budgeted amount for products/services,” says Reiffer. “Industrial customers may also mandate chemical and equipment specifications that result in new product development and engineering.”

     Each sector—industrial, commercial, residential—has challenges. And each brings rewards.

     “Industrial manufacturing businesses are a target of our core focus because their cleaning needs tend to be more residual and consistent without the large fluctuations associated with fleet washing, residential, or other commercial cleaning sectors,” says Reiffer. “The sales cycle may be much longer with more due diligence required for approval of purchase, but once successful, we often find these customers do not have a high turnover rate.”

     As for serving commercial and residential customers, Reiffer’s company has a unique vantage. It celebrated 50 years in business in 2021, and it began as a mobile contract cleaning company primarily focused on commercial fleet washing services but also serving other commercial, industrial, and residential customers.

     Like industrial customers, commercial and residential customers turn to the company for “a high standard of quality, customer service, and availability/delivery of their products,” explains Reiffer. “With our heritage, we understand that the needs of our contract cleaning customers can also be very broad or very targeted to a specific cleaning application.” 

     Again, it’s listening to and understanding the customer that catalyzes the business relationship. “Because of our experience, we develop and manufacture a diverse line of detergent products and equipment solutions to serve our industrial customers and mobile contractors,” says Reiffer.

     Engagement with customers and prospective customers is a given. “We have dedicated members of
our sales team focused on mobile contractors that regularly attend industry trade shows and contractor certification courses, and they perform hands-on field training,” says
Reiffer. “Our company’s educational and consultative approach sets us apart because we cater to customers offering diverse cleaning services ranging from decades of experience to brand new entrepreneurs.”

     Yes, there are differences in the purchasing patterns of different sectors. Meeting them is just part of doing business and doing it successfully.

     “Contrary to industrial customers, our residential/commercial contractors may have large fluctuations in their purchase volume attributed to seasonality and the demands of their own customers,” says Reiffer. “We expanded our manufacturing capabilities, available inventory, distributor network, and logistical partnerships to ensure that all our customers have access to their products in a more predictable and expedited manner.” 

     Reiffer notes that customers in all three sectors have a common need. That is to obtain the best available cleaning solution and to do so in the most efficient manner possible. Highly satisfied customers—that’s the goal. 

     Each customer may have a slightly different want. “This can include providing a better cleaning result, delivering a more concentrated product that can be diluted further, saving time, reducing labor, increasing operational efficiency, and/or addressing environmental and safety concerns,” says Reiffer.

     In summary, serving industrial, commercial, and residential customers—or any two of three—will require more space, equipment, and personnel. But for distributors, manufacturers, and contractors in our industry, serving more than one sector is a way to build a strong and resilient company that’s somewhat buffered from the vagaries affecting any one sector.

     Moreover, serving more than one sector is an excellent way to learn more, educate more often, and invigorate the entire industry.