Small but mighty
Mary King is leading Elisha Penniman into an era of renewed appreciation for the smaller distributor
By Susan L. P. Srikonda -- Industrial Distribution, 12/1/1999
When Mary King inherited Elisha Penniman from her late husband in 1995, she didn't want much to do with it. In fact, with an 18-month-old son to care for, she came quite close to selling the business.But all that has changed. Mary King has fully embraced the title of president and is working hard to gain new recognition for the $4.6 million cutting tool and abrasives distributorship.
"What I've been hearing from customers is that when Paul [King] was alive, this company was alive. But after he died, we weren't being promoted as effectively," King says. "But now we're coming back. This is what I've been hearing: 'The new Elisha Penniman.' And I've been running with that. I feel like for the past two years that I've been here, I've been working real hard and that I've made a name again for Elisha Penniman and I want to continue to do that."
The reasons Elisha Penniman is regaining ground are the same reasons it has been awarded Industrial Distribution's Excellence in Distribution Award in the under $10 million category. The company's 13 employees annually spend more than 500 hours on product and sales training. The technical expertise of the company's inside and outside sales team has won the respect of customers and suppliers alike. And while its size may be small, Elisha Penniman offers a mighty service package that rivals offerings by its larger competitors.
The story of Elisha
A man named Elisha Penniman started the business in 1953. A few of the company's current employees began their careers working for Penniman, and they speak of the founder with fondness and respect.
Gary Bolles, vice president and treasurer, started working at Elisha Penniman in 1964 and says Penniman taught him lessons about customer service that are still a vital part of the company's culture.
"He instilled in me a sense of pride in doing the best we could for our customers," Bolles says, "and I think that's why some customers have stayed with us all these years, because we've tried to take very good care of them." Bolles can point to nearly 30 current customers whose first orders are recorded in the company's original leather-bound ledgers.
King's late husband, Paul, worked closely with Penniman as well and succeeded him as president in 1982.
Paul guided the business through the flush years of the 1980s and early 90s, says Michael Pines, vice president and outside sales manager, "and then the manufacturing industry basically fell through. It declined dramatically and we downsized as a result of that. We're starting to build it back up again now."
During Paul's presidency, Mary King often worked part time for the company doing advertising and marketing work.
When Paul died, he left his wife with the business and their young son to care for. And for the first year after Paul's death, King chose not to work at the company.
When King began working at Elisha Penniman full time, she was approached with several buyout offers and went as far as due diligence with one company but called off the deal because negotiations got ugly, she says.
And so the "boss's wife" made up her mind to truly become president and she hired a business consultant, Delta Capital Group, to be her sounding board. King says the beginning was a struggle for herself and her employees, but only one employee quit after she started running the company.
"I think [the employees] are accepting it, now that they realize I'm here and I'm putting in the time and they see what I'm doing," King says.
"I'm really glad [selling] didn't work out because now I'm doing what I never thought I'd be doing," King says. "I did not know that I had the ability to be the president of this corporation and the ability to go out there and sell. But I'm realizing that I can do it and I've been doing it."
She's not doing it alone. As the majority shareholder, King shares ownership in the company with Bolles, Pines and Jim Lewis, vice president/general manager, who continue to lead the company in their respective areas of expertise. As for King, she's found a role for herself in selling the company on a conceptual level and re-directing the company's focus on customer service, training and quality.
Technical strength
The industrial market in Connecticut is highly competitive and heavily focused on aerospace and defense, peppered with a number of smaller machine shops. In response, Elisha Penniman has worked to diversify its customer base, balancing the ups and downs of the aerospace and defense industries with customers in commercial manufacturing, automotive manufacturing and public utilities.
The company works hard to focus on its strengths with metal removal, gauging and metal finishing products.
"Trying to be everything to everybody isn't necessarily the way to go anymore," Pines says. "We've targeted areas where we have exclusivity in product or technical advantages over some of our competitors. If you go after those areas and show a value to a customer, they tend to call you up again when they have an application problem. You become a problem solver for them."
That level of focus contributes to Elisha Penniman's strong relationships with suppliers like Iscar Metals and Arc Abrasives.
In fact, Elisha Penniman is the fastest-growing distributor for Iscar Metals in the New England region, says Peter Caputo, Iscar's New England regional manager.
"In the last five years, they've done phenomenally. They're totally dedicated to the growth of the Iscar product and take total responsibility for the growth of the line," Caputo says. "It's a great partnership and they're always willing to adjust. They're our top distributor in terms of the total package."
Caputo says Elisha Penniman's technical product knowledge and focus on Iscar products is vital to helping Iscar gain marketshare in New England.
Elisha Penniman is also a target distributor for Arc Abrasives, says Anthony Stayman, vice president of sales and marketing.
"The East Coast market has had its difficulties, and yet we've grown our market there every year," Stayman says. "And we've grown that market because of distributors like Elisha because they've decided to commit to Arc Abrasives. That allows us a chance to go to their end users and develop business ... If they can open the door like that, we can perform and we will focus and give that distributor our time and effort."
Focus on training
One of the real strengths of this distributor, customers and suppliers say, is the technical expertise of both its inside and outside sales representatives. Elisha Penniman's long history of concentrated product training and its new focus on sales and customer service training empower employees to provide fast, accurate information and solve complicated technical problems for customers. Altogether, the company annually sponsors more than 500 hours of training for its employees.
Product expertise is important to customers like J. F. Fredericks Tool Co., Inc., in Farmington, Conn., which makes CNC machining parts for aircraft and air conditioning manufacturers.
"They come in if we have a problem and see how the machine is running and give us suggestions on different kinds of tools we could try, like a certain insert or end mill," says Ken Gilbar, Fredericks' tool technician. "On one job, we were using a regular roughing end mill and they said the three-flute carbide end mill would make the job run quicker and save us money on tools in the long run. I still buy a lot of those end mills from them."
With an average 15 years of service behind Elisha Penniman's outside and inside sales force, the company is able to focus its product training on new products and applications, rather than constantly covering the basics. So, whoever answers the phone at Penniman can give a customer a technical answer.
"Our inside people are more than someone just to answer the phones and take an order," Pines says. "We have customers calling on a regular basis with application questions. And our inside people, more often than not, are able to help the customer very quickly."
When King came on board, one of the changes she implemented was to send salespeople, one at a time, to sales training through an outside vendor. One morning a week, for 12 weeks, employees work to fine-tune their sales presentations, customer service, phone techniques, and other skills. That training, Pines says, is paying off.
"We've had people that were very good product-wise who couldn't qualify a sale," Pines said. "They could perform a wonderful demonstration and then walk out the door without ever asking 'when do you think you might be interested in purchasing this?' You have to be able to qualify what your customer's needs are ... That's one part of what these seminars are helping people realize: it's not just technical expertise, it's presentation too."
Small is relative
When Elisha Penniman approaches a new customer, the challenge is to sell their ability to meet that customer's needs as well, if not better, than their larger supply-house competitors can.
"We sincerely feel that the small distributor is going to be able to provide service at a better level, with better technical expertise, than the huge supply houses can offer," Pines says.
Penniman offers many of the same services and capabilities their competitors do: just-in-time delivery; vendor managed inventory; electronic data interchange; tool dispensing machines; automated order entry; seven-day, 24-hour emergency service; engineering support; price protection; and more. The company is also working on becoming ISO 9000 compliant and having online ordering capability by mid 2000.
For customers like Projects Inc., a $14 million firm that supplies machined hardware and electrical instrumentation to aerospace and gas turbine industries, Elisha Penniman's product-specific technical expertise and value added services are more important than its size.
"Their strength is that they bring people in to help us evaluate jobs," says Bruce Thompson, Projects' vice president of operations. "And they've been successful with us in implementing an insert consignment program. We found that we were changing inserts all the time and at one time we had 166 different inserts in our crib and we were only using 39 of them. Through Penniman, we now have consignment kits set up in the shop and that history of building up inventory can't occur again.
"A smaller company is always more flexible and reacts quicker," Thompson continues. "With Penniman, I can get in touch with the guy I need when I need to. The only weapon we have is speed. Speed is money. If we can deliver the product quick, we win. If we can't, we lose. Plus I have the owner over there sending me thank-you cards for lining up more business. How often do you see that?"
That's right, thank-you cards. King reaches out to customers to let them know she values their business and to recognize any problems that occur.
"I want to add that personal touch," King says. "I want them to know that I'm going to do everything in my power to treat them well because they're my customers."
COMPANY SNAPSHOT
Elisha Penniman Inc.
President: Mary King
1998 Sales: $4.6 million
Founded: 1953
Locations: 1
Primary Products: abrasives, gages, cutting tools, inspection equipment, carbide inserts, N/C tooling
Web site: www.elishapenniman.com
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