Bill Godwin and John Schultz, the principals of Godwin & Schultz Sales Co. based in Salt Lake City, have embraced the concept of dynamic equilibrium. Godwin explains: "Dynamic means you never stop moving and equilibrium means you maintain a balance. Our business philosophy is to always keep moving but also to stay in sync."
This translates to having an active outside sales force calling on customers and prospects on a regular basis, while maintaining healthy relations with long-term clients. Because both Godwin and Schultz operated their own rep firms prior to merging 13 years ago, they have 20-year relationships with a number of their manufacturers and wholesaler customers.
This philosophy has helped the company grow its lines more than 355% over the last 10 years, with each line growing from 11% to 157% per year.
Both Godwin and Schultz make customer calls outside of the office every day. They count themselves as part of the five-person outside sales force.
"People buy from people," Schultz says. "When push comes to shove, they will buy from whom they feel comfortable with -- the guy who has been at their door every two weeks." Godwin adds, "We make more calls more often than any other rep firm in the area and fundamentally it has paid off."
In fact, several years ago Godwin and Schultz restructured the company, creating the position of operations manager for Dan Lowe, to free themselves for more customer calls. They had observed other rep firms expand to the point where the principal could no longer make sales calls, and those businesses had gone downhill fast.
"You have to take care of the customer day in, day out," Godwin says. "This applies to our customers, manufacturers and employees. They are so closely tied together that if any one is not happy, the other two suffer. The ownership of the company is here for them."
G&S spends 60% to 70% of its time calling on wholesalers, but also calls on specifiers, builders, contractors, manufacturers and end users.
"We do a lot of pull through with contractors and builders," Schultz notes. Pure specification represents no more than 20% of its business. G&S goes to the engineer to try to get its products specified. Its wholesaler customers inform G&S when a big job is coming up.
Most of the company's customer base can be reached in a four-hour drive, which both Godwin and Schultz travel on a monthly basis. The firm does about two-thirds of its business in Utah and one-third in Idaho.
G&S is primarily a shelf rep, with about 80% to 85% of its business related to those types of products.
The company focuses on selling service and value and tries to avoid price cutting, Schultz says. "A lot of the product lines we compete against are lower in price, but we maintain our market share with service and quality."
Keep It SimpleGodwin and Schultz Sales follows three simple rules in operating its business:
Call on the customer.
"We want to be the one with the relationship with those customers," Godwin says. "I talk to customers every day who say they see us every two weeks or every month, but see the other guys only once every six months."
Take care of problems
"Customers want to buy from me because they know me, we're friends," Godwin notes. "I keep them updated and handle their problems."
Make it simple for the customer
"We represent 15 or more product lines," Godwin says. "Our customers have the choice of worrying about 15 different terms, minimums, product lines, or they can deal with one company, G&S, for all 15 lines. They can call one phone number in the same time zone where they operate, regardless of where the manufacturer is based. Customers realize how simple it is to deal with G&S."
The rep firm's 42,200-sq.-ft. "full service" warehouse helps accomplish these goals.
There are pros and cons to being a stocking rep firm, Schultz points out. Because the bulk of its market is within 40 miles either way from its warehouse, the company gets a lot of will-call business. "This gives our manufacturers a leg up vs. their competitors," Schultz says. "The customer may have to wait three to four days for something from an out-of-state manufacturer, but we can get it to them today."
Because G&S has its own warehouse, its wholesaler customers can carry less inventory.
"Some customers call in their orders on the way to our offices," Godwin notes. "We know our customers' needs locally and handle them accordingly. For example, irrigation is a seasonal business. Between March and October, we know that distributors will need their products immediately."
On the downside, having a fully stocked warehouse creates more of an infrastructure for the rep firm, more overhead. It means more employees are required, equipment is needed, and certain regulations must be followed.
"Our inventory is the manufacturer's inventory," Godwin says. "We only sell to wholesale distributors."
The company's wholesale-only philosophy forced Godwin and Schultz to resign from a long-term, large manufacturer that was pressuring it to enter the retail arena. This happened in 1996.
"To this day we miss those people, but we don't want manufacturers dictating our business direction," Godwin states. "I've known a lot of reps who will change their direction at the whim of a new sales manager for the manufacturer. Our customers can walk away from us tomorrow. Our manufacturers can leave us in 30 days. We wanted to run this like a business."
Customer RelationsGodwin and Schultz Sales Co. invests in its business to develop and strengthen relationships. For example, the rep firm offers fly fishing trips for groups of contractors five to six times per year. G&S will host contractors or wholesalers on a guided trip into the mountains, starting on a Thursday night and continuing all day Friday. It gets the customer out of the office, but not for an excessive period of time. Godwin and Schultz avoid pushing business on these trips, focused instead on establishing relationships.
"Every year we'll take a group of wholesalers from Idaho and from Utah on a fishing trip," Godwin says. "We'll ask the wholesalers if they mind if this other wholesaler is on the trip. They compete, but they know each other."
Requests for counter days have declined in recent years, Schultz says. "We used to do a ton of them," he notes. "Now, if we have a new product we'll do a counter morning and for the first two to three hours we'll get good traffic."
Some companies will do an open house. There are still a lot of golf tournaments and the rep firm participates in support of the wholesaler, but they are expensive, Godwin notes.
"Most of our manufacturers have backed away from spending money on non-selling events," he adds.
The firm also offers training for contractors, builders, wholesaler customers and even inspectors. "That is part of our job," Godwin says. The firm recently conducted a one-and-a-half-hour training session on one of its product lines for a large homebuilder.
Another aspect of the business philosophy at G&S is making the wholesaler feel important, as if each one is the only customer called on by the rep firm.
"When we are standing at a purchasing agent's counter, we don't pull out a notepad from another wholesaler's place of business," Godwin notes. "We don't talk about the other wholesaler getting a job. We don't gossip about other wholesalers. Our wholesalers will tell us things they would never want their competitors to hear. We have a strong burden of trust."
This extends further to a policy of not hiring someone away from a wholesaler distributor. "We won't talk to a customer's employee about working here until he resigns from the other company," Godwin says. "He can come to us when he is unemployed. Truck drivers, salesmen and other key people from wholesalers ask us if we have openings and our response is always no. We don't want to develop ill will between us and the wholesaler."
Hiring, Training, Motivating EmployeesGodwin and Schultz Sales seeks employees with good people skills who are able to educate themselves about the products. "We empower them," Godwin says. "We want good people who can make decisions, not someone who needs to be directed by a policy manual. The right thing is always to serve the customer."
The outside sales staff meets to share product and marketing information on a weekly basis, so they will be consistent in what they tell customers. The three inside salespeople train themselves with manufacturers' literature. G&S tries to bring an inside salesperson to trade shows such as ISH in Frankfurt or ISH North America, where he or she can get a feel for the whole industry and meet customers and manufacturers.
"Our three inside salespeople -- Ellen Butterfield, Tiara Mossburg and Zac Bevan -- handle every phone call and enter every order," Schultz says. "They answer 90% of the questions that come in."
The company has paid a bonus twice a year every year it has been in business. It also pays 100% of its employees' health insurance premiums. "We probably pay our people on the high end because we want to keep them," Godwin notes.
"We want our employees to be happy and healthy," says Dan Lowe, operations manager. "We try to treat each one like he or she owns a piece of the company. Everyone has a say in what goes on here. We do a good job of making them feel involved."
This has resulted in long-term employees, even in the warehouse. The newest employee in the warehouse has been there two and a half years, and one has been there nearly seven years.
"We have a lot of people here who will be lifers because they are happy with the way the company operates," Lowe says. "No one feels ignored."
Warehouse OperationsGodwin and Schultz Sales has a rule: every order placed before 1 p.m. goes out the same day, even if the warehouse people have to stay until 8 or 9 p.m.
"Our customers have enjoyed that level of service from us for a long time," Lowe says. "We try to stress to all our employees that they work for our customers, not so much for G&S. Without our customers, there is no reason for us to be here."
Every order shipped from the warehouse is double-checked by a longer term employee to verify part numbers and quantities. The company maintains records of errors in the warehouse and pays a separate bonus based on accuracy.
"With our monthly incentive bonus program, if the warehouse ships error-free orders in a given month, the bonus can be as much as $50," Lowe says. Each error subtracts $10 from the bonus.
Both full-time and part-time warehouse employees attend weekly meetings.
Trends And Projections
Godwin & Schultz Sales serves both independent and large national wholesalers, such as Ferguson/Familian Northwest.
The wholesalers look to G&S as experts, Godwin notes. "They rely on us to tell them what is being sold in this market, when and how much they should stock."
Contractor relations have increased in importance for the pull-through effect on wholesalers, he adds.
Schultz says he expects to see more consolidation in the industry and the major challenge for G&S will be to maintain market share.
"For a while there was a trend away from reps, but that is almost reversed now," Schultz says. "More companies are moving to us."
Where reps used to concentrate on sales calls and a little training, now they are asked to do market studies, reporting and order entry -- functions that formerly were handled by the manufacturer, Godwin notes.
Manufacturers contact G&S to information or market share data. They'll discuss with their rep the likelihood of a customer buying a product that they are considering developing.
All of the firm's manufacturers have Web sites and a link to each is featured on the G&S site at www.gandssales.com. Also, the company is in the process of implementing an Intranet to improve the flow of communication among employees. Lowe plans to visit J & K Sales in Manchester, N.H. (Supply House Times' 2002 Rep Of The Year) to learn about that firm's Intranet.
"Some rep firms change their line card almost daily, but we have lines that date back 29 years," Godwin says. "Unless we have done 100% of the business we can do with a manufacturer, there is no sense getting another. We've had good sales success with every one of our accounts, but we are not yet doing 100% of what we can do with any of our lines. We won't take on a line we can't do well on. "