Ties that bind
After 72 years on Chicago's near northwest side, Cragin Industrial Supply still succeeds by catering to the community - it's just done a little differently today
By Victoria Fraza -- Industrial Distribution, 11/1/1999
Bob and Christine Szafraniec didn't panic when the manufacturing industry that had surrounded their distributorship for so long began to move to the suburbs, the southern states and into Mexico 15 years ago. The business will come back, they thought. The city is the place to be, especially the great city of Chicago.In a way, the Szafraniecs were right. Their company, Cragin Industrial Supply, stayed put on Chicago's near northwest side and today is doing better than ever. Although the manufacturing community the firm once catered to is gone, new business and new opportunities have arrived. By capitalizing on that new business, Cragin Industrial's sales have increased 20 percent a year in each of the last three years, and the firm has expanded by adding product lines and people.
But the growth hasn't come easily. Not long after their customer base began to erode came the onslaught of mega-distributors and home centers looking to take yet another piece of the local distributor's pie. Realizing that manufacturing was gone for good and that new competition was attempting to drive a wedge between them and the customers that were left, the Szafraniecs knew they had to take matters into their own hands.
Long accustomed to serving the local community, they took a look around and realized that the community had changed. If Cragin Industrial Supply were to continue to succeed, it, too, would have to change. So, nearly ten years ago, the staff at Cragin began an effort to re-create the company's image. By evaluating the firm's strengths and weaknesses, finding new customers, and launching a first-ever marketing campaign that includes local radio advertising, that's exactly what they have done. As a result, today Cragin Industrial Supply performs a unique balancing act that eludes many small firms: still a community-based, family-owned company, it has acquired enough of the skills and capabilities of the larger players to remain a force in an increasingly competitive marketplace.
Committed to the community
John Szafraniec opened Cragin Hardware in 1927 in the primarily industrial part of Chicago known as the near northwest side. Established as a neighborhood hardware store, the company soon built its business around the industrial and commercial customers in the area -- mainly factories in the early days -- as well as the do-it-yourselfers and private citizens of the community. Today, Cragin Industrial is located at 2021 N. Laramie Blvd. -- just around the corner from where John Szafraniec first set up shop -- and continues to sell a broad range of MRO supplies. John's son, Chester Szafraniec, took control of the company in the 1960s and remains president today, although his two sons, Bob and Jack, handle day-to-day operations. Bob is corporate vice president and CEO and Jack is vice president of operations. Bob's wife, Christine, is the company's manager and handles all marketing programs. Cragin has 18 employees and did just under $5 million in sales last year.
Despite the changes of late, Cragin Industrial Supply still has that "local hardware store" feel to it, with products stacked in aisles that run the length of the showroom and a long counter that spans the width of the building toward the back of the store. Warehouse space is out back and along the left-hand side of the building, and the corporate office -- which houses inside and outside sales, accounting, marketing, and the corporate vice president's desk -- is located in a cramped room to the right of the showroom floor. Retail customers comprise two percent of Cragin's business today. It's an element that Bob and Christine Szafraniec say they just can't give up because it's "part of the Cragin tradition."
And tradition is a big part of the reason the Szafraniecs chose to stay in the city when conditions began to change. The neighborhood made Cragin Industrial Supply what it was, say Bob and Christine. Abandoning that neighborhood just didn't seem right.
"At one time, we had more walk-in business than we knew what to do with. But that changed," notes Bob.
"It's difficult for a company, especially when you're a small family business, to take a step back and really look at what is happening around you," adds Christine. "But that's what we had to do."
Looking closely at their neighborhood 10 years ago, they saw that it had changed culturally. A new wave of Hispanic immigrants had largely replaced the Poles and Italians that once dominated the area. Those newcomers were not only living, but working in the community -- at companies that either were buying from Cragin or had the potential to do so. Adding a bi-lingual salesperson, who speaks both Spanish and English, has heightened Cragin's ability to keep in touch with that community of buyers. Cragin also has two employees that speak Polish, a culture the Szafraniecs say is still widely represented in the area.
"If we can't understand [our customers] and they can't understand us," reasons Christine, "why would they want to do business here?"
The Szafraniecs also took a look at the bigger picture and examined the Chicago market as a whole. (Ninety percent of Cragin Industrial's business is done in the city proper, but the firm also sells to customers in the suburbs and into southern Wisconsin and northern Indiana.) While manufacturing was largely gone, there were other industries that needed the products and services Cragin Industrial Supply had to offer. The firm still sells to the manufacturers and small job shops that remain, but among the new customers are hospitals, schools, construction companies and building maintenance firms. Cragin has used a number of methods to tap into those new markets. For one, Christine began attending the Chicago Building and Real Estate Show several years ago. The show targets companies that are building in Chicago as well as those that maintain buildings in and around the city.
"That's probably something we never would have thought of doing 20 years ago," she says. "Because we didn't have to."
Stepping up to the plate
Another thing Cragin Industrial Supply never had to do was advertise. With a history dating back to 1927, the firm was well-known in the area. But with new competition coming from home centers and catalog houses, the Szafraniecs needed to find a way to remind customers of their presence -- and of their potential. That's where the marketing campaign came in. And like everything else the company does, it took root in the community. Christine began by advertising in church bulletins and programs for high school sporting events.
"You never know who's going to see that," explains Christine. "We're a community-based business ... this helps us create an image of who we are as a company."
Christine has since started advertising in larger publications, but the firm is quickly becoming known for its radio ads. Cragin advertises several times a year on a local sports talk show called "The Score" on Chicago's WSCR radio. She started the radio spots as a way to promote Cragin's twice-a-year "Tool Tune Up," sponsored in conjunction with Milwaukee Electric Tool. Customers bring their old Milwaukee tools in for maintenance or repairs and can enjoy lunch, new product demonstrations and other events geared towards customers and their families. Christine takes advantage of Milwaukee's co-op advertising dollars to help promote the events on the radio, in print, and through direct mail. Milwaukee's national sales manager, Tom Blue, says the program has been a success for both parties.
"They've really become aggressive and they've told their story," says Blue, noting that Cragin wasn't a player in the Chicago market for Milwaukee until the firm began its marketing push in the early 90s. "I hear their radio ads all the time ... The creativity of Chris and the staff there have really helped them step up to the times and compete with the giants of the industry today. They've taken some risks, rather than pulling their horns in."
A marketing campaign can, indeed, be risky to a small company unaccustomed to spending time and money on advertising and promotions. But it's a risk the Szafraniecs had to take. Known as the place to get hard-to-find items and expert service, Cragin Industrial Supply had to show new and existing customers it could also provide the standard supplies and services they were buying from large catalog houses and home centers in the area. The firm also had to take measures that would show customers they were a "player" in the market.
Advertising has done much to raise the corporate bar for Cragin Industrial Supply, says Christine. The firm has also boosted its image by joining Incom, a buying group that provides catalogs and other promotional materials the small company couldn't afford to produce on its own. But Bob and Christine say it takes more than flashy promotional materials and catchy radio ads to succeed in the Chicago market. Small companies like Cragin Industrial Supply, they say, need to first become better competitors. And that means investing in new technologies that can streamline operations. One of the first things Cragin did in its effort to revamp its image was buy new computers and purchase a distribution software package. After that came Internet access and the production of a Web site. The Szafraniecs also did simpler things like update their telephone system and purchase digital copiers.
"We invested in things that would make us look more professional," says Christine. "You have to have those things to look like a player."
The strategy seems to have worked. Cragin Industrial Supply continues to stand its ground amidst the Graingers, Home Depots, and others who have crowded the market in recent years. And that's something longtime customers like Paul Aller, a supervisor at American Grinding Co. in Chicago, respects and admires about the Szafraniecs and their employees.
"It just goes to show you the vision they've got and how sharp they are," says Aller, who has done business with Cragin Industrial Supply for 35 years. "I can remember years ago when everyone was moving to the suburbs. Bob told me, 'it will all turn around. This is our area. This is where we will stay.'"
Stay, they have, and they won't be leaving any time soon. The Szafraniecs say they've come too far and worked too hard to stop now. Their plan for continued growth is to expand on the business they've acquired in the last few years -- by providing those customers with more and more products and services. While advertising and technology are key parts of that strategy, Bob Szafraniec says he will rely more heavily on something Cragin has been doing since 1927 -- providing personal attention to customers large and small.
As a case in point, Aller remembers a time several years ago when a hydraulic breakdown brought things to a halt at the American Grinding Co. plant. To make matters worse, it happened on the morning Aller was leaving for a Florida vacation. His first reaction was to call Cragin Industrial Supply. Not only did Cragin have the parts to fix the problem, Aller says Bob Szafraniec found someone to do the labor, as well. Knowing his company was in good hands, Aller left for Florida and never gave the issue a second thought. It's that kind of attention, he says, that keeps customers coming back to Cragin.
Bob Szafraniec and his staff agree. "People still want to buy from people," says Bob. "Building a rapport with people is where our biggest success has been.
"For years that's what we did. And it's what we'll continue to do."
COMPANY SNAPSHOT
Cragin Industrial Supply
President: Chester Szafraniec
Corporate Vice President: Bob Szafraniec
Headquarters: Chicago, Ill.
Founded: 1927
Employees: 18
Territory: Chicago and surrounding suburbs
1998 Sales: Just under $5 million
Web Site: www.cragin.com
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