FlorLine Midwest Matures Its Systems, Message with Guidance from Andy BirolCase Studies
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Ask any parent and they’ll tell you: a 20-year old isn’t necessarily as mature as he sounds. Just as a 6’4”, 220 pound body can belie the chaotic mind of a frat boy, experience and growing sales don’t guarantee that a business is “all grown up.” Chris Reynolds, founder and his partner and brother Shane of FlorLine Midwest www.florline.com, a Massillon, Ohio based contractor of high-performance flooring and wall systems, have devoted 20 years to growing their company from start-up to success. Yet, following a rapid growth spurt, they felt Florline was still more awkward teen-ager than titan of industry. Having installed more than 30-million square feet of flooring throughout the eastern United States, the company didn’t have trouble finding customers or making sales. But profit margins had slipped, and the company was having trouble keeping up with the pace of sales. “We didn’t really have the systems in place to allow us to grow properly,” said Shane Reynolds. He added ruefully, “We didn’t have much of a system at all.”
When Chris started their business in 1985 targeting small, local manufacturing plants in Ohio, they hardly imagined installing systems for some of the world’s great companies; by 2003, however, the company’s client roster boasted such corporate giants as Coca-Cola, Nabisco, Honda, Pfizer, and Nissan. “We had grown fast,” said Shane Reynolds, “but not smart.” FlorLine had extended its reach into 30 states and hired more than 50 people to serve customers in the manufacturing, biomedical, and food and beverage industries, yet its internal workings hadn’t moved beyond the level of a Mom and Pop shop.
As Reynolds recalled, they were already considering bringing a consultant in to help them “transition” up to the next level of growth when Shane attended a national sales meeting for The Garland Floor Company, a FlorLine supplier and client of Birol Growth Consulting. “Andy was leading a seminar,” said Shane Reynolds, “and when he talked about Best and Highest Use, it resonated with us.” Impressed with what Andy had achieved with Garland Floor, the Reynolds brothers discussed how he could help them focus their company. “We were already doing very well,” said Shane Reynolds. “In fact, growth was up 30% when we called Andy in. The tendency for a lot of people is to wait until times get bad before they turn to a consultant, but we wanted to position ourselves to take better advantage of our opportunities. Even when you’re succeeding, there’s always room to grow.”
THE BGC SOLUTION:
When the Reynolds made the decision to go forward, they hired a new employee, Bill Moul, to be in charge of business development. “Then Andy was hired,” said Shane Reynolds, “to give Bill direction … and help the rest of us ‘grow up’!” Working closely with Moul and Reynolds, Andy developed sales funnels to identify suspects, prospects, and customers and devise methods to improve profitability. Andy’s Pacer Process provided a clear direction to break FlorLine’s customers into three broad categories:
- Blind Bid—Public bid opportunities that are decided solely on price, with no opportunity for the company to distinguish its Best and Highest Use. Customers in this category typically provide “high volume, less margins, and more headaches,” noted Shane Reynolds.
- Lead Generated—Referrals made by manufacturers, current customers, or reps who match a prospect’s needs to FlorLine’s capabilities. Although profit margins are better than for Blind Bid customers, these accounts typically demand a lot of attention and time.
- Relationship Sales—Any past or current customer of Florline is a potential relationship sale. “Profit margins are high in this group,” said Reynolds. Customers who have been satisfied in the past are often willing to negotiate and may pay premium prices for what they know to be quality product and reliable service.
Since the company’s margins had not kept pace with the growth of sales, Andy encouraged Moul and Reynolds to set specific targets (based on annual percentage growth) for each category of customers. This would ensure the company focused its efforts and resources proportionally. After they set the final numbers—25% for Blind Bid; 25% for Lead Generated; and 50% for Customer Relationships—the next step was to define sales tactics for each account type. The activity proved to be eye-opening. “Basically, we learned who are our best customers are,” said Shane Reynolds,” and then realized we weren’t selling what they wanted to buy.” To achieve the ultimate goal of increasing profitability, the company had to find a message to meet what its relationship customers wanted to buy—an efficient, reliable way to purchase quality floors and wall systems.
FlorLine’s founders are so pleased with Andy’s work that they have signed on to be one his “relationships customers”—they’ve re-hired him to work on operations. “Andy’s become more of a friend and mentor than a business acquaintance,” said Shane Reynolds, adding with a laugh, “Except when we have to pay his bill!”
The results of FlorLine’s relationship with Birol Growth Consulting can be summed up in two words: positioning and profits. A key step has been to change the message. The company’s old tag line—“A leader in design and application of protective coating systems”—was plain-spoken to a fault and said nothing about the benefits FlorLine could provide to its customers. The company has undertaken a major effort to redesign all its literature, including letterheads, marketing materials, and the Web site, to highlight its appeal to customers: Florline Quality: Increasing Productivity and Reducing Risk for Over 20 Years. “It’s a completely new way of selling our business,” said Shane Reynolds. “For the first time, we understand what our best customers are really buying, and now we can sell what they want.”
Moreover, Chris and Shane Reynolds have made good on their belief in Andy’s concept of Best and Highest Use; they are switching jobs. “Chris’s greatest strengths involve training, teaching, maintaining the quality of work—a lot of hands-on management,” said Shane Reynolds, “and my part is more sales-oriented and organizational.” Toward those ends, Shane is stepping into the role of company president, where he will be able to draw on his education in environmental management, while Chris will oversee recruiting, training, and quality control. “We’ve gained a deeper understanding of our own company,” said Shane Reynolds. “And we give Andy the credit. He’s charismatic and easy to work with, but the best thing is that he’s always ‘outside the box.’” After a number of years in business, many owners find it difficult to step outside their own companies to gain a clear vision of its strengths and vulnerabilities, but as Reynolds said, “Andy draws you out there with him.”
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