What it takes to establish a profitable long-term relationship with an electrical independent? Anna Ryland asked John Hawley who spent half of his working life getting to know the independent channel.
There are very few people in the industry who know better electrical independents than John Hawley, Beko’s channel director of Independents. Having spent forty two years in the industry, working ‘on the road’, managing and regrouping sales forces of the leading UK brands, John believes that the independent channel requires dedication and patience but it offers long-term loyalty.
I joined John Hawley and Richard Pearson, Beko regional sales manager for South East, as they called on three Beko independent retail accounts in the Brighton area. The three independents – Carters, Optimum and QDA – operate very different business models but all are committed stockist of Blomberg, Beko’s Plc brand which is exclusivel to CIH members in the UK.
The Turkish manufacturer Beko began trading in the UK in 1990. At the time the company only traded with multiples. In 2006, John has been asked to join Beko and to develop its independent business. Since then Beko’s turnover with the channel has grown eight times.
“Now Beko is a one-stop shop for the independent. We sell to the channel and sort all the potential problems ourselves,” said John Hawley. In addition to sales force on the road, the company has four people dedicated to sales and service support of the independent trade. The South East region is the largest of Beko’s sales areas. It accounts for over half of Blomberg sales turnover.
The Blomberg brand was launched in the UK in 2010, first as a freestanding product collection only. The Blomberg built-in appliances were introduced in Britain in August 2011. The sales of the brand grew very fast, achieving £4.3 million in 2011. The expected result for 2012 will be double this.
Beko’s retail accounts are graded As, Bs and Cs – depending on the amount of business made and their growth potential, explains Richard Pearson.
An important A-account, Carters Domestic Appliances in Brighton (the company owns seven stores in Sussex), incorporates a newly fitted Blomberg Centre which displays a suite of integrated Blomberg appliances.
“Blomberg is a Beko brand made for German market. It has good quality and it is a very good value for money proposition. That’s why it’s very easy to sell,” explains Richard Carter. “A free three-year part and labour warranty is a considerable attraction. It’s nice to be able to offer something that is unique and won’t be sold through sheds and supermarkets. I have customers who have already purchased one Blomberg product and now asking for more. Slowly the name is getting out there.”
Jessica Carter adds: “We wouldn’t invest in the Blomberg Centre if we didn’t think that the brand was good. Blomberg has supported us extensively and helped us to achieve anything that needed doing.”
In contrast to the business formula of the Carters store, that also accommodates other brand centres such as Miele and Neff, in the Optimum store in nearby Southwick, which is our next stop, appliances are grouped in product categories – from entry to top-of-the range models. This allows staff to trade up as they move along the product range demonstrating an increasing number of features and benefits. Customers of Optimum come from as far as Eastbourne and Chichester, attracted by word of mouth recommendations and the company’s service facility.
“The uptake of Blomberg at Optimum was gradual but with the launch of built-in collection and a three-year warrantee they are now supporting the brand wholeheartedly,” said John. Martin Edmonds, store manager of Optimum explains: “With the three-year warrantee Blomberg has became a value-added brand. We are happy to handle the brand since the products are well made, are good value, and make us a good profit margin.”
Our final destination is a vast showroom of QDA store in Peacehaven (costal town know for its retired population). Its business formula is similar to that of Optimum. Here customers progress from the cheapest to most expensive models within a product category as sales staff point out incremental features and benefits. Close to the front there is a Blomberg washing machine. “A Blomberg washing machine with a free three-year warranty for £299 – is an easy sell. We stock Blomberg appliances because they give us good margin,” comments store manager Martin Edmonds.
“These businesses are representative of the diversity of the independent channel,” explains Richard Pearson. “You get so much variety every day with independents. Each dealer has different requirements so you need to cut your business in the way that suits them.”
On average, Richard spends two hours with a larger customer; but it is unlikely he could do more than two/three major accounts a day. “There are many issues to discuss. If I wish to get a return on my time spent with an independent customer I cannot rush. With independents you have to knock on the door to get the business.”
John Hawley on the independent sector
While working at Electrolux John has been given a choice between working with multiples or independents. He chose the independent channel and since then “stuck to his decision.”
“I like people and that’s why I am in this industry. There is a massive difference in attitudes between the multiple and independent channels. At the multiples, sales people look at their jobs as a step up on a career ladder and they often move. For the independents their jobs are their business and they are passionate about it. They don’t look upon it as a short-term career move.
“The industry has seen considerable changes since I entered in it. New sales reps are reluctant to deal with the independent channel because it is more difficult to handle – although it brings greater rewards. And it’s more fun. When reps go to a multiple they can do a deal for £20,000 in an hour. And they don’t need to get involved in nitty-gritty of the business. Meanwhile every independent is different and has different requirements – so it’s much harder work. You need to have passion for this business to work with independents.
“This business is not as much fun as it was 30 years ago; everything is done in a hurry. Paperwork and spreadsheets are taking up the time which should be spent dealing with people. Independents like talking to sales people, discussing deals, haggling. I like trading; Beko brought me in to develop trade with the independent channel and this is what I enjoy doing. It takes time to develop important relationships and this industry is about relationships and trust.”
John Hawley’s career path
John left school at 16 and began his professional life working for the local electricity board. After leaving the board, he sold insurance for three years. “This environment made m
e grow up very quickly.” Next he joined sales force of Kenwood where he progressed through a number of levels during 20 years, up to the postion of marketing manager. After leaving Kenwood John became a sales and marketing director of Berry Magical, the heating company. Next he joined the Electrolux Group and became sales director for the independent channel representing all four Electrolux brands. During this period Electrolux became the CIH White Goods Supplier of the Year for three years running. In 2006, John was approached by Beko and asked to help the manufacturer develop its independent business. When John joined Beko, its independent business (including wholesalers) was worth £12 million and it has grown eight times since then. John plans to retire next year and has already been asked to become a captain of his local golf club.
“I am the last of the old era dinosaurs left, the rest of them have already retired.
“My father, a Yorkshireman, taught me a few rules among which was: to play to enjoy but also to play to win. I still want us to be the most successful company. But I don’t make a promise I cannot keep. People always know where they stand with me. My credibility is very important to me.”
The hardest moments in John’s career were the occasions when he had to make people redundant. This happened when he worked for Berry Magical and for Electrolux.