Window Film - 2009- September/October

Volume 13, Issue 5 - September/October 2009

Newsworthy

Manufacturers Change Sales Strategies

After approximately ten weeks on the job, CPFilms’ new president Ray Kollar is moving the window film giant quickly from a defensive to offensive position. It’s no secret that the company has undergone a difficult holding pattern amidst an economic downturn, including several layoffs at its Martinsville facility and a recent leadership change. (See related article on page 12 of Window Film’s July-August 2009 edition.) But Kollar recently had the pleasure of hiring back 24 positions this past June in a move that he says reflects the company’s commitment to increasing its business.

“I was brought in by Solutia to grow this business,” he says. And executives for Solutia Inc., CPFilms’ parent company, didn’t bother setting the bar low. He says the goal is to double his sector’s overall business.

Kollar’s strategy calls partly for developing an upstream demand in the commercial segment. On July 27, CPFilms announced the creation of an in-house sales specialist team to help find and win retail and commercial architectural projects to fuel this process.

“By developing a specialized team in-house and avoiding a ‘middleman,’ we are able to keep costs lean while maximizing value for our dealers and finding growth opportunities in the architectural market,” explains Sal Abbate, general manager Americas for the company.

Kollar says that under the leadership of Jeff Hammerer, the newly-formed sales team will focus on cultivating corporate relationships and funneling resulting projects to CPFilms’ dealer base for installation. As the company strives to double its business, Lisa Winkler, director of product development and technology for the company, says it would be near impossible for its dealers to keep up with the demands presented by the commercial segment.

“There are dealers out there who are absolutely qualified to do big commercial deals, and are doing them now,” she explains. “But, if we’re going to get really big, they can’t get big enough, fast enough, to compensate for that.”

“We are putting CPFilms’ resources into selling to large building owners.
The idea being—we’ll make the sale, using people who have the savvy
and know-how, and then we’ll turn it over to our dealer base to do
the professional installation.”
—Ray Kollar

Relationships Retooled
CPFilms isn’t the only manufacturer retooling its strategies surrounding large commercial deals. 3M recently penned a deal with National Glass Service Group (NGSG) in which it agrees to pursue all national retail accounts exclusively through NGSG. In return, NGSG, a Dublin, Ohio-based company that specializes in landing big window film contracts, many with large retail chains, agrees to use 3M products and dealers exclusively. NGSG officials assure that any deal aligned with 3M will be installed by the manufacturer’s dealer base.

But the agreement between 3M and NGSG has sparked controversy among some of 3M’s dealers.

“I have sold 3M films for more than 20 years,” one dealer posted to the Window Film magazine website. “They, and all of the major players, have routinely gone around the local dealers to sell the product. Yes, the local dealer still ‘gets’ to install the film, usually at a ‘volume discount’ labor rate … The profit on the product goes in 3M’s coffers, and maybe it should. I have a problem, though, when these sales to the end-user involve pricing equal to or below that of a dealer; even those that have worked their entire careers promoting the 3M name.”

“No 3M dealer can be happy about this,” another visitor posted. “The margins at the end of the day on projects like this are minimal.”

Patric Fransko, NGSG’s senior vice president of operations, says that 3M’s dealers need not worry about NGSG cutting into their sales. He says his company will primarily serve as the project manager for each arrangement and installation services and sales will remain within 3M’s dealer network.

“I’ve got a meeting tomorrow with a national retailer with 3,300 locations,” Fransko says. “I’m going in with one of 3M’s regional representatives. We’re coming in as a unified source and if that business comes in, then we will use the existing 3M dealer network to do the installation.”

A Team Effort
Fransko says the same channels will remain in place, plus NGSG’s project management services which earn the company a fee. He also says that in the instance that his company comes across a potential customer that is already working with or has received a quote from one of 3M’s dealers, it is required to steer clear immediately. In the end, he suggests that the only impact his company’s relationship with 3M will have on its dealers will be in the form of added business.

“No one is cut out,” Fransko says. “The dealer will order the product from their normal distribution channel; 3M sells the product through its normal distribution channel; the dealer gets the sale and we get a project management fee. So it’s truly like a win-win-win across the board. Nobody gets cut out.”

Kollar says the same is true with CP’s decision.

“We are putting CPFilms’ resources into selling to large building owners,” he explains. “The idea being—we’ll make the sale, using people who have the savvy and know-how, and then we’ll turn it over to our dealer base to do the professional installation. That’s good for them. That leverages our resources and we’re bringing them business, which we should be, by de-bottlenecking the process.”

Winkler says CPFilms’ dealers that are already equipped for and landing large commercial deals may carry on with business as usual.

“For the dealers we have that are already capable of doing this, we have no intention of taking over all of the sales for this type of business,” she explains. Kollar says the move has less to do with taking over commercial sales, and more to do with creating business.

“My focus is on growth,” he assures. “That means we’ve got to be able to better leverage our existing dealers—bringing them business that may be too difficult for them to get themselves.”

And Kollar says commercial sales isn’t the only department he will need to retool in order to meet Solutia’s goals. His next stop is in manufacturing.

“As I do these things, I’ve got to have an engine that sits behind all of this that can react to it,” he explains. “If I’ve got a sales organization that is capable of going out and winning a bid on 80,000 square feet of window film, the supply chain and manufacturing has to be able to react to that quickly, or I’m not doing anybody any good.” In the past, he says, CP’s manufacturing philosophy was centered on utilizing resources, rather than throughput. “I’ve got to have a manufacturing engine that doesn’t have to speculate that I might have an 80,000 square foot sale, and put that inventory in place, then let it sit there hoping that we get it,” he says. “I’ve got to have a manufacturing engine that can react,” he adds with a loud snap of his fingers.

Changing Roles
Changing strategies at the manufacturer level have the potential to impact dealers that service the commercial segment. Mike Spurlock, a window film salesman with Ken Caryl Glass Inc. in Littleton, Colo., says changes implemented by 3M and CPFilms could have a number of impacts.

“Overall, I think that more aggressive direct marketing and selling by the manufacturers will ultimately increase film sales for everyone involved,” Spurlock says. “Many of the smaller dealers either do not know how to pursue large accounts, or more often, are too busy owning and operating their businesses to dedicate a large amount of time to chasing larger potential clients.” Spurlock feels that manufacturers are stepping in to pursue opportunities that many dealers have left unaddressed. “Overall, this is probably a good lesson to the dealers,” he says. “If we had not been complacent, there would have been no need for the manufacturers to get involved.”

But Spurlock does have a number of concerns regarding how a manufacturer will keep from stepping on the toes of its dealers that choose to remain involved in the commercial segment. For instance, he says, there is a possibility for a manufacturer’s sales rep to approach a customer with whom one of its dealers has spent time developing an interest or lead. “What if the manufacturer approaches an existing dealer's customer?” he asks. He also fears that manufacturers may choose to draw on dealer client lists as a resource. “There is a potential conflict, as the dealers must turn in contact info for warrant[ees].”

A “Holistic Approach”
Window film manufacturer Huper Optik also announced a change in its sales strategy recently. The company moved its headquarters into a newly-renovated building, which includes such features as: green power sources, including wind energy; LED lighting and control systems, which are based upon the frequency of daylight at any given time; and a cool roof system—all of which it now encourages its dealers to offer their customers. The company’s chief executive officer, Faisal Nazir, says all will be provided and installed through Energy Efficient Systems (EES), a provider of what he describes as “holistic energy solutions.”

Nazir says Huper and EES formed a “strategic alliance” through which Huper’s dealers are now able to offer additional products and services.

“The future, as we see it, is in the retrofit business for energy conservation as a whole,” Nazir says. “Lets say a dealer has established a relationship with a Ritz Carlton hotel. We want that dealer to use the relationship they have with a facility manager to expand their business from just window film to other product lines. With this strategic alliance, a dealer is able to use this relationship to say, ‘By the way, window film is a great product. We’re a part of your solution, but we’re not the whole solution.’ Then EES comes in and strategically packages window film with other products, such as lighting and control systems for instance, and offers the final customer an entire package.” In the process, Nazir says his dealers will earn commissions on additional products.

The decision, which Nazir says was brought about partly by economic conditions, was announced at the company’s annual dealer meeting. He supports his company’s decision by pointing to those dealers who followed up by changing their strategies.

“The dealers who followed suit and changed their strategies are out there working 16 hours a day and have 15 buildings that they’re doing energy audits on at any given moment,” Nazir says. “Those who did not, are wringing their hands right now.”

Though his decision predates Huper’s, Jeff Thompson, owner of SUNsational Solutions in Austin, Texas, is one of those dealers who chose the “holistic” route. Thompson’s business once was strictly a window film dealership. But eventually, he says he felt the need to push his company’s role beyond just window film.

“About three years ago, we began expanding into more energy-related, green services,” Thompson explains. “So, we service the residential and commercial sectors with the purpose of reducing energy costs.”

SUNsational Solutions now offers radiant barrier products, which are spray applied to the underside of roof sheathing to deflect heat. The company has also added insulation products and solar-powered attic vent fans.

“You’re not selling a product; you’re selling your company,” Thompson says. “When we talk to people, often times their goals are to reduce their consumption of energy. Well, obviously window film can be a big part of that, but we also consult our customers on other things they can do.”

Similar to Huper, Thompson has decided to walk the talk by incorporating as many energy-reducing products as he can into his own home. Currently, his goal is to be entirely off the grid within five years. —DV