Progressive Distributor

Safety maven

While staying true to its roots, this safety specialist has expanded into new customer segments

by Rich Vurva

While other safety distributors have lost sales to industrial and construction distributors encroaching on their territories in the past few years, Mettam Safety Supply continues to achieve impressive results. The company’s sales have increased every year since moving into a new building in Danville, Ill., in 2001. It did so by remaining committed to its roots as a safety specialist and by broadening its reach into industries and customer segments that value the services a safety distributor can provide better than competitors.

Founded in 1974, the company historically focused on single-location customers, mostly in Illinois and Indiana. Utility companies made up a large portion of the company’s business. In the past four or five years, this safety specialist began to set its sights on winning national accounts from a broader customer base. Today, business for the $16 million company falls into four primary groups: manufacturing, agriculture, utilities and petrochemical.

“About four years ago, we started getting more involved with presentations to multiple-location customers,” says Nan Mettam, who took over as president and CEO after her parents, Curt and Nancy Mettam, retired.

The agricultural industry – including grain processing facilities and ethanol plants that are sprouting up throughout the Corn Belt in the Midwest and other parts of the U.S. – is Mettam Safety’s fastest growing customer segment. Its largest customer has 400 locations.

“A number of customers we’re dealing with are global in nature,” says Mettam. “Many of their initiatives have to do with feeding the world. They’re looking at the largest markets in the world, like China. So we feel our business is more recession-proof than we were 10 years ago.”

More diverse customer base
The company still has many manufacturing customers, but success no longer hinges on the ups and downs of the automotive industry, as it did before a General Motors foundry in Danville closed in the 1990s. When GM shuttered that facility, it dealt a severe economic blow to the Danville area, but proved to be a blessing in disguise for Mettam Safety, which had already begun to diversify its customer base.

“The automotive business was not a good fit for us. They didn’t value the relationships, services and training that we offer. It was more focused on price,” Mettam says.

Today, the company strives to build long-lasting relationships with customers that value Mettam’s value-added services and expertise in safety, such as providing respirator fit-testing or employee safety training.

One key to the company’s continued success is the knowledge base and strength of its management team. The company holds weekly management meetings for managers to get together to communicate activities taking place in their departments.

Mettam also recently started conducting weekly “Breakfast with the Boss” sessions where employees can chat with her about company initiatives and suggest their ideas for improving processes to enhance customer service and sales. In one early session, employees came up with suggestions to improve the company’s Web-based catalog.

This renewed emphasis on best practices has helped fuel sales growth. Sales were up about 12 percent in 2006 and are on track to increase by 10 percent in 2007. Some of the reasons for the sales gains include an emphasis on product standardization, redesigning the comp plan to reward inside salespeople for focusing on the most profitable customers, developing a new target account program, and transitioning more sales online.

Settling on a standard
Vice president of sales Tom McCoy believes a primary way to help multiple-location customers achieve cost savings is through product standardization.

“With a lot of customers, we’ve found that when you get into multiple locations, there’s a lot of opportunity for standardization,” he says.

When he analyzes a customer’s total spend, McCoy commonly discovers that the company may be buying up to a dozen different styles of safety eyewear. Reducing those options to three or four choices can help the customer earn better pricing from safety eyewear manufacturers, and also allows Mettam to stock fewer SKUs. One customer recently saved more than $65,000 annually through product standardization.

Mettam also recently enhanced is online catalog so customers can order products 24/7. When employees log on to the site, they can purchase only those items approved by their employer, which also helps drive standardization.

“We’ve recently won some contracts because of our ability to standardize product sales using the Web,” Mettam says.

New comp plan
Employees don’t accept all new practices with enthusiasm. For example, when a new compensation program for inside salespeople in the market development department was put into place in 2003, managers spent a great deal of time explaining the rationale behind the change and how it would affect salespeople. The goal of the new compensation plan is to focus sales efforts on the most profitable customers.

“Our compensation is based on what activities or customers we want salespeople focused on,” explains Mettam. Inside salespeople earn a higher commission for sales to new customers, for repeat business, and for sales in certain product categories, such as gloves, respirators and protective clothing.

“We looked at what repeat business drives most of our sales, and that’s where we want to direct our salespeople’s activities,” she says.

Sales and marketing manager Nancy Burris says the change was painful for some employees to accept. Salespeople with the most experience were particularly worried about how the new system would impact their earnings. Mettam implemented the change slowly and provided detailed reports explaining to salespeople how the plan worked.

“We ran the two programs side-by-side for six months so as not to penalize the salesperson. Whatever amount was more beneficial for the salesperson, that’s what they earned,” says Burris.

Most inside salespeople now understand the difference between profitable customers and less profitable customers. They’re less inclined to waste time on customers with low profit potential.

“We shared a lot of information to help them understand why we designed the program the way we did,” says vice president of operations Marvin Cox. “Once they had the understanding of what we were trying to accomplish, they knew what to do.”

Searching for sales
The inside and outside sales departments work closely together on efforts to seek new customer prospects. In the past year, Mettam assigned two people from the market development department to devote all of their time in a key account development program. They’re given specific targets to contact by phone and through e-mail blasts to begin to establish a relationship.

McCoy and Burris work closely with the key account development salespeople to define the types of accounts to target, paying close attention to employee size, business sector and product needs. They require monthly progress reports in case they need to revise their strategy or move on to new targets.

One objective is to set up appointments for the management team or an outside salesperson to make a presentation outlining Mettam Safety’s full capabilities and service offering.

“It can be frustrating for a field salesperson who might go by a location monthly and not be able to get in. Now, a key account development person can help get us in front of that customer so we can make a Mettam presentation to show them the value of the services we can offer them,” says McCoy.

Proving value
Another key to Mettam’s success comes from balancing the disparate needs of safety and purchasing departments. Safety managers know the value of offering respirator fit- testing for three shifts beginning at 5 a.m., or holding a weekend safety fair. Purchasing managers want to see hard dollar savings.

Mettam satisfies both desires by documenting activities and cost savings.

“Purchasing agents are directed at saving dollars. That’s why value-added documentation is so important. Purchasing agents often don’t realize we’re down on the plant floor doing tests and trials. We can’t rely on the safety person communicating that to purchasing. So we give them a documented report to show what we’re doing and what it has saved them,” says McCoy.

A detailed report prepared for a trailer manufacturer included more than two-dozen examples of activities that generated over $44,000 in annual savings. Some of the cost savings came from product standardization, holding safety training seminars on new OSHA regulations, and conducting plant surveys to determine if workers are using the correct personal protective equipment (PPE).

“Companies with safety departments value the services we provide, and the purchasing side values the savings we offer,” says McCoy.

The company works closely with safety product suppliers to schedule product application training and also provides opportunities for employees to keep up to date on OSHA regulations and other safety issues. Having knowledgeable and skilled salespeople who know how to select an earplug with the correct noise reduction rating or the dangers involved in specifying a glove with poor dexterity is what separates Mettam’s staff from distributors who don’t specialize in safety, Cox says.

“Anyone can sell safety products. We want to make sure it’s the right product,” he says.