Staying strong in a weak market
For the staff at Flat Glass Distributors, the bottom fell out in September 2008.
In January 2009, “We got aggressive,” says David Cates, vice president of sales and marketing for the Jacksonville, Fla., fabricator. “Our first step was to figure out how to turn the company into a sales company. And we did it. We hired another sales person when other companies were laying people off. We examined our [delivery] routes. We redefined our customer service. We increased business about 19 percent [in 2009], and I think this year is going to be a good one for us.”
Cates’ story is just one of several relayed during recent conversations with industry executives who have found success in this tough market. Perhaps not surprisingly, these stories had some common threads: investment in new equipment; product innovation; new markets; and sales incentives.
You have to spend money to make money
For Maryland Glass & Mirror Co. in Baltimore, this meant investing about $1.75 million in new equipment, including a fully automatic cutting line with edge deletion system, a 20-drawer automatic glass loader and shuttle system, two glass polishers, an overhead crane system and a glass tempering furnace, in addition to ancillary items to accommodate the new machinery. “In a down economy, we decided to undertake a major equipment investment to take us to the next level of fabrication,” says David Dalbke, president. While the company typically operates on a cash basis—“If we can’t pay for it, we don’t buy it”—it felt strongly that an investment in new equipment was necessary to grow the business. “We are going through a succession plan, or youth movement here, where we have some young salespeople,” Dalbke explains. “We felt that a succession to the next generation required new equipment capabilities.”
The addition of the tempering furnace, in particular, enabled the distributor/fabricator to offer its customers a more extensive choice of products. And although it required a major cash outlay, it will save the company money in the long run. “We’re our own largest customer,” Dalbke says. “We have purchased hundreds of thousands of dollars of tempered glass products from other sources. Now, we have control and can produce a quality product in a just-in-time delivery fashion.”
As sales manager, Matt Dalbke points out that the investment also positioned Maryland Glass & Mirror as a one-stop shop. “We can now be competitive for almost the entire interior glass package,” he says. “I think one-stop shopping will be a great added benefit for a lot of our customers.”
For Flat Glass Distributors, its equipment investment was all about boosting efficiency. “I noticed an opportunity early on in the custom shower door business,” Cates says. “People aren’t selling their homes, but they are remodeling. That market is there, so we invested about $350,000 in a new workstation design to take us from 17 minutes per panel to four minutes. That has already basically paid for itself, and our shower door volume is up probably five times.”
The decision to invest in capital equipment was part of Flat Glass Distributors’ effort to “redefine customer service” through improved turnaround times and higher product quality. So far, it’s paying off, Cates says. “We’ve been able to get customers because we’re doing a better job than our competitors,” he says. “While I’ve lost customers that have gone to the low-cost guy, now they’re coming back and buying more than ever. It’s all about market share. I don’t get people telling me the economy is getting any better.”
And while that might be true, it doesn’t mean 2010 will be without opportunity. With that in mind, I’d like to cover other companies’ success strategies in future issues. If you have a story to share, please e-mail me at email@example.com.