Service after the sale

With Many Manufacturers Closing Down Their Repair Facilities, Distributors Step Up to the Plate to Service What They Sell

By Bridget McCrea, Contributing Writer -- Industrial Distribution, 10/1/2005

Marc Beerman knows a little something about how important tool repair, replacements and loaners are to his firm's customer base. When a pneumatic or air tool goes down on the job site, a contractor's first instinct is to call the place where he bought it, which in this case is New Orleans—based industrial distributor Beerman Precision, Inc.

Always ready to answer the call, the firm has offered tool repair since it started selling tools back in the 1980s, and not because it's profitable, says Beerman, president of the three-location, 40-employee firm.

"Our go-to-market strategy has also been to service what we sell," says Beerman. "It's not a profit center, but it does support our sales."

It also helps smaller distributors like Beerman Precision stand out in an industry where big boxes and national distributors have made significant inroads over the last few years. With tool manufacturers shutting down their company-owned service centers, fewer large distributors venturing into repairs, and more customers demanding quick service on tools, independent distributors are often the perfect choice to fill that gap.

"Service is becoming more and more important for smaller distributors because the national firms, and large regional distributors, have, for the most part, abandoned their attempts at tool repair," Beerman explains.

The reasoning is simple: there's really no money in it. After all, running a repair facility requires manpower, technical expertise, physical space and a significant inventory of parts.

Where distributors make up the difference, says Beerman, is on the sales side, where reps can push their firm's ability to provide low-hassle, locally based "service after the sale." It's a trend that Beerman says is becoming increasingly important for independent distributors that want to attract and retain customers.

"Smaller players leverage their service capabilities as a competitive advantage," says Beerman, whose firm primarily services pneumatic tools, air tools (such as impact wrenches and drills), electric tools and hoisting and hydraulic lifting products. A group of in-house, factory-trained technicians handles the repairs for the firm, which acts as a warranty/service center for certain manufacturers.

Having those resources on hand helps the distributor deal with busy contractors, many of whom come into the store (or call by phone) in an anxious state, concerned not only about a loss of productivity and money due to downtime caused by the broken item, but also worried about the price they'll have to pay to get it fixed.

"At that point, we either have to find a way to get a tool (such as a loaner) into the customer's hands, or get the repair turned around very quickly," says Beerman. "It's about figuring out what you can do for the customer and still make a buck."

To ease some of the tension, Beerman Precision offers half-price tool rentals to those customers who are waiting for repairs to be completed. That means carrying extra inventory, but it also helps to generate revenues and serves as a better alternative to "loaner" programs, says Beerman.

"Some have tried loaner programs, but they're tough to run because you never know exactly what the customer wants," he explains, "not to mention the fact that a customer who is using a loaner has little incentive to bring back your tool."

In return for the time, money and effort that the distributor puts into its tool repair program, Beerman sees two key benefits: it helps sell product, and it serves as a differentiator in the marketplace.

"Go to a home center, Grainger or even Amazon.com to buy tools, and as soon as you run into a problem with that tool, they'll send you on your way," says Beerman. "We're differnent in that we quickly diagnose the problem (be it equipment- or user-related) and help the customers resolve their problems. Customers are comfortable knowing that, 'Hey, this company not only sells me a product, but it also services what it sells.'"

The fact that contractors will eventually need their tools maintained, repaired and even replaced isn't lost on Harvey Neu, president of Neu's Building Center in Menomonee Falls, Wis. With one location and 40 employees, the company services the power and air tools that it sells, and even repairs hand tools when it's feasible to do so. And while the firm used to send the tools out for repair, it brought the services in-house about 15 years ago.

Neu says the switch came after manufacturers such as Milwaukee changed its views on how repairs should be handled. At one time, for example, the firm wouldn't allow those distributors based within a certain radius of a manufacturer-run repair center to service the tools.

"In those days, we basically just served as a drop-off point for customers," recalls Neu. "But as the population grew, and as the popularity of tools increased, there was no way that a manufacturer's service center could handle everything. Now they encourage us to service what we sell."

Like Beerman, Neu says his distributorship sees little in the way of direct profit from its repair efforts.

"The profit comes when someone has a tool down, knows we can service it in a timely manner and drives from the other end of town to bring it over here," says Neu. "Then, while he's here, he picks up blades, accessories and other items that are on his shopping list"

These days, most of those shoppers are contractors and builders, many of whom are under strict time constraints. They want everything fixed as quickly as possible, says Neu, who sometimes (but not often) will offer loaners as a way to get them up and running.

The firm's technically trained repair staff fixes 600 to 800 tools per month using complex electrical testing equipment and a wide range of repair parts that are held in inventory.

In a business world wrought with mergers and acquisitions, however, finding those repair parts isn't always easy.

"With so many manufacturers buying each other out, we've run into periods of time when parts weren't flowing like they should have been," recalls Neu. "That adds stress to our counter staff, the technicians and the customers, who want everything yesterday."

In return for that stress, Neu says he gets the satisfaction of knowing that customers walk away from the counter not only with a tool, but also with the knowledge that they're truly getting a value-added proposition out of the deal.

"Things are so competitive in terms of tool pricing," says Neu, "that sometimes the only edge we have is the fact that if anything goes wrong, we can do the service right here."

Being able to offer repair services not only pleases customers, but it also helps manufacturers who are making the products. At hand tool manufacturer Wright Tool Co., in Barberton, Ohio, Tom Neal, sales manager, says many of the firm's distributors offer repair services on the products they sell. Such service requires more labor, investment and physical space on the distributor's part, but it can pay off nicely in terms of increased sales, a dose of profit made from the repair cost itself, and a reputation for standing behind the products that you sell.

"It's basically a matter of having something available that your competitior doesn't. You certainly don't want to give your customers any reason to go somewhere else," says Neal, who sees the construction field as one area in particular need of such services. "If a distributor can't supply what the end user wants right away, then he'll go find it someplace else."

Expect to see more distributors awakening to that fact in the future, but don't count on any national or large regional players making the move to repairs anytime soon. Smaller firms may not have an easier time of it, says Beerman, who adds that regardless of company size, setting up and maintaining a repair facility is no easy task, and requires extensive training and shop outfitting.

"After a period of time, many companies may decide that the significant capital outlay hasn't paid off," says Beerman, "and that they can't make any money at it."