Niche marketers
Toomey Associates of Westfield, Mass., grows by honing its specialty and concentrating on best business practices
By Victoria Fraza -- Industrial Distribution, 3/1/2000
It's no secret that small distributors have to work harder these days to differentiate themselves from the competition. Toomey Associates of Westfield, Mass., has taken that notion to heart.Toomey Associates is one of those super-specialized distributors constantly working to further develop its niche. The firm specializes in high pressure hydraulics -- pumps, tools, cylinders
-- used in steel mills, general manufacturing plants, paper plants, and by filter manufacturers, the aircraft industry and others. The company also sells pressure instrumentation and gauges -- products Pat Toomey founded the company on back in 1966. Now under second-generation leadership, Toomey Associates has grown from a one-man operation to a 16-member team doing just over $4 million in sales last year.
Vice president Mike Hatch attributes much of that growth to Toomey's commitment to being a specialty distributor. After deciding to focus on high pressure hydraulics in the early '80s, the firm began adding more and more capabilities -- repair work, engineering and manufacturing of hydraulic systems, kitting and packaging of parts, and other value-added services. The ultimate goal was to make Toomey Associates an invaluable part of the customer's operation -- a goal that continues today.
"We really don't want to be in the commodity market," explains Hatch, pointing out that while Toomey Associates does sell parts and pieces to customers, its forte is viewing a customer's operation and helping them implement an entire system. That requires technical know-how, of course -- something Toomey Associates has worked hard to heighten in recent years. But Hatch and company president Bill Toomey realize that it takes more than that to compete as a specialty distributor in today's marketplace. That's why Toomey Associates is focused on combining its technical and engineering expertise with good internal business practices -- like activity-based costing and a formal quality program -- to secure its spot as a top-notch small distributor in New England.
The turning point
In the early 1980s, Toomey Associates wasn't dealing much in high pressure hydraulics. The firm was a small distributor for Enerpac, one of the most well-known makers of high pressure hydraulic equipment in the country, but for the most part focused on pressure instrumentation and gauges. A new management team, established in 1986, decided to change all that.
Realizing that high pressure hydraulics held great potential for Toomey Associates in New England, the team -- made up of then-CEO Maureen Kane, Bill and Jerry Toomey, and Hatch (Pat Toomey's daughter, two sons and son-in-law, respectively) -- decided to branch out from the firm's traditional product base. They devoted the time and money needed to learn the Enerpac lines and began developing new business in the area. Three years later, Toomey Associates was one of the largest Enerpac distributors in the country, according to Hatch.
"It was a major turning point for us," he notes.
Indeed, the re-focusing of the business was a springboard for substantial growth through the rest of the '80s and '90s. Toomey Associates' outside sales department has grown from one to four people since 1980, and the inside sales department has grown from two to five people. What's more,, Toomey Associates is a recognized expert in high pressure hydraulics today -- but that reputation hasn't kept the firm from looking for new ways to grow. Among its strategies for future growth: developing systems that combine hydraulics and pressure gauge products and installing special safety control devices on presses and pumps. Both projects require engineering and technical knowledge, as well as a close working relationship with the customer.
Kevin McLeod, a territory manager for Enerpac, can attest to Toomey Associates' ability on both fronts. As for technical knowledge, he says it's not uncommon for Enerpac engineers to consult Toomey technicians when introducing new products.
"Our engineering people will bounce ideas off them," says McLeod. "[Toomey] has a lot of resources in house ... they really add value to my product in the marketplace."
As for working closely with customers, McLeod says: "When we look at a distributor who we want to represent us, we look for people who can bring something to the table, people who can add value to the Enerpac name ... and Toomey certainly does that. They take my product and for some customers they enhance it by putting it into a kit, or matching up parts with others for a system."
In addition to all that, Toomey Associates also brings behind-the-scenes work to the table -- internal programs aimed at running the business more efficiently and ensuring customer satisfaction. They include a formal quality program, an activity-based costing system and a creative profit-sharing program designed to reward employees for "stellar" performance.
The quality factor
At the core of Toomey Associates' business philosophy is a commitment to quality. The firm achieved ISO 9002 registration in 1996, but has had a quality program in place for almost as long as it's been in business. Key to that program are Toomey's formal customer satisfaction surveys. Quality manager Ken Crosscup sends out the surveys regularly, asking customers to evaluate Toomey Associates for timeliness of delivery, product quality, service quality and other issues. Crosscup says the response rate is good -- usually about 30 to 40 percent -- as are the evaluations, though they aren't always glowing. Any time the company receives a rating of average or below, Crosscup calls the customer to find out what went wrong and what the company needs to do -- or not do -- to make them happy.
Crosscup follows up even further by compiling memos twice a month detailing the results of the latest batch of surveys. The memos are distributed to all employees.
"It keeps everyone abreast of exactly how we're doing," explains Crosscup, adding that he also compiles more detailed quarterly reports that are distributed to the entire company. The reason for the follow-up is simple, he says: "Everything here is time. We're a small company and we're busy. We need to address things quickly."
Indeed, time is of the essence at Toomey Associates, which is why the company is in the process of implementing an activity-based costing system (a process that helps companies reduce costs and improve business decisions). Simply put, Hatch says the ABC program will help the firm identify its most profitable customers and adjust its time and business focus accordingly.
"We want to spend our time with the people who are going to make us money," says Hatch, adding that the company has begun to reduce support to customers who don't quite meet the criteria they've established -- those who don't pay on time, request more support than Toomey can give, etc.
ABC works well with suppliers, too, says Hatch. The company is in the midst of reducing its vendor base -- a practice of which distributors are usually on the receiving end. The firm has eliminated some accessories suppliers whose product they sell little of, as well as those who don't offer good discount or incentive programs. The goal, says Hatch, is to deal with the manufacturers who want to grow with Toomey Associates and reward them for the value they bring to the end user.
Recognizing stellar employees
Rewarding a job well done is another thing Toomey Associates takes to heart. It's sometimes difficult for small distributors to attract and keep good employees -- in part, because they lack the resources to offer extensive benefits packages. The situation forces smaller companies to get creative. Toomey Associates' Stellar Employee program certainly fits the bill. Designed to reward employee performance, the Stellar Employee program is a unique profit-sharing initiative created two years ago.
The company sets aside a pool of money each year, drawn from profits and earmarked for end-of-the-year bonuses. But those bonuses are not automatic. At the outset of the program, the company came up with a list of criteria for each job function -- a list that describes what a "stellar" employee in each position would do. At the end of the year, employees meet with management and explain, in detail, how they have met or exceeded the goals for their particular job. Bonuses are given out based on how well they've done. The program is voluntary and Hatch says not everyone chooses to participate.
"It's kind of a creative profit-sharing program," he explains. "We feel it gives employees the chance to make their case right up front."
Outside salesman Robert Geromini, who achieved "stellar" status in 1998 and 1999, agrees. He says the program was partly born out of the ISO process -- which requires documented job descriptions for the entire company -- and partly out of the desire to develop a better compensation program. It's a worthwhile project, he says, because it allows all employees the chance to benefit from the hard work they do all year.
"I think it's a good program," notes Geromini. "It gives you a clear set of goals, attainable goals, and you already know how to achieve them."
While the Stellar Employee program gives workers the chance to benefit from a job well done, it also helps the company put its best foot forward with customers and suppliers. The idea, after all, is to have employees performing at or above the "stellar" criteria established for their job. It's a bonus all around, says Hatch.
Customers and suppliers alike note that Toomey Associates is a professional, well-run organization. To be sure, the Stellar Employee program only enhances that reputation. But all of Toomey's efforts to operate more efficiently help boost its outside appearance. Whether it's quality, ABC, profit-sharing or technology -- the company upgraded its computer system last year and is in the process of re-vamping its Web site -- Toomey Associates is determined to be the best distributor in its market segment.
Longtime customer Mark Amanti, vice president of Advance Manufacturing of Westfield, says Toomey Associates is making great progress toward that goal.
"I think they're going places," says Amanti, whose firm builds tooling for assembling and disassembling jet engines. "They've got a nice little niche and a good name out there in the industry."
Toomey Associates was named to Industrial Distribution's list of the 50 Outstanding Small Distributors in 1998 and 1999, and also appeared in our list of the 25 Best Small Distributors of 1997.
The problem solvers
As a specialty distributor of high pressure hydraulics, Toomey Associates of Westfield, Mass., boasts its ability to solve problems for the customer. Theirs is a business of discovering what the customer's needs are and then finding the product or developing the system to meet those needs. As an outside salesperson with Toomey Associates, Robert Geromini finds that one of the most rewarding parts of his job.
As a case in point, Geromini points to his work with contractors for Boston's Big Dig, a multi-billion dollar construction project that will, eventually, place the city's main highway system underground. For the work those customers are doing, says Geromini, you can't just sell them a bunch of products.
"You have to evaluate what they're doing, figure out what they need, what they're trying to accomplish," says Geromini.
Recently, one of Geromini's customers was looking for a hydraulic torque wrench for a project that involved working on the entrance to the tunnel that will carry Boston traffic through the city. But the customer had specific needs, so Geromini had to do some research, come up with a recommendation and then demonstrate the product, which he did -- perched in the bucket of a crane, high above the ground, underneath the Southeast Expressway.
It's all in a day's work for Geromini.
"You don't just go in and show [the product] to them," he says. "They want to put it right to the test. So, I have to put a hard hat on, wear the boots. It's exciting work ... It's fun."
COMPANY SNAPSHOT
Toomey Associates
President: Bill Toomey
Vice President, Sales: Mike Hatch
Vice President, Service: Jerry Toomey
Headquarters: Westfield, Mass.
1999 Sales: $4 million+
Employees: 16
Primary Products: High pressure hydraulics and instrumentation products
Territory: New England
Web Site: www.toomeyinc.com
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