Roundtables Mull Profitability, People Issues

Roundtable sessions addressed numerous topics at this year’s Coffee Summit, and to enable all the attendees to learn from all of them, the National Automatic Merchandising Association used a technique known as “round up” panels, in which seminar leaders reported the highlights of their seminars to the full assemblage. The Coffee Summit was held earlier this summer at the Crowne Plaza in Cherry Hill, N.J.

Much discussion addressed ways to improve profitability during a recession. Several attendees noted the importance of making sure an account has the right equipment for its needs. An account that has downsized may not need the same amount of equipment as it once did.

Other attendees noted that the recession is a good time to add sales people since more customers are shopping the market to get the best deal. One operator said that his company won business when it added sales people during the early 1990s recession. The company grew even more when the recession ended and customers resumed their pre-recession spending habits.

First-day roundtable sessions addressed sustainability and preparing to “go green,” account retention and conversion practices, route structure, profitability, hiring the right route people, and single-serve coffee trends.

WHAT IS ‘SUSTAINABILITY?’

Barbara Pritikin, integrated marketing communications manager at Kraft Foods, noted her company spent a lot of time identifying “sustainability,” which has become an industry buzzword. She said Kraft took a cue from the United Nations and considered the social, environmental and economic impacts of everything the company does. “What we do today affects the future generations,” she noted.
Pritikin noted Kraft and other manufacturers have partnered with TerraCycle™, which “upcycles” products and prevents garbage from ending up in landfills. Kraft has also partnered with Rainforest Alliance™, which certifies coffee that meets rigorous social and environmental standards.

Paul Schindelar, vice president of sales at Kraft’s vending/OCS division, noted that addressing sustainability can help an operator win business. Operators can do this by using bio-diesel fuels, global positioning satellites (to ensure efficient fuel use) and LED lights (to ensure efficient energy use).

Regarding account retention and conversion, Kevin Daw, president of KNJ Sales, asked his listeners how they make clients aware of new equipment and concepts. One answer was making customers aware of upgrades when it comes time to renew the service contract. Another was to attach flyers about new equipment to invoices. Still another was to educate customers about what the OCS operator must do to maintain profitability.

To build profitability, Daw recommended offering products of different levels of quality at different price points.

When manufacturers raise prices, some attendees suggested sending personalized letters to customers while others felt it is important to discuss the matter in person.

Another suggestion was to give a customer an opportunity to “buy in” at a certain price as protection against future price increases.

Still another suggestion was to show cost increases on a per-cup basis. “Always distill your pricing down to the lowest (unit),” Daw said.

On the subject of what to do with used equipment, some suggested placing equipment manufacturers’ logos on used equipment as a way to sustain customer confidence.

Donating used equipment to public agencies can qualify a business for tax deductions.

WHO MAKES A GOOD ROUTE PERSON?

Regarding hiring the right route person, Mike Jones, vice president of john conti Coffee Co., stressed the need to decide who you don’t want to hire. The route person is very critical to OCS success.

Jones suggested paying attention to driver applicants’ email addresses. The email address can often reflect the person’s character.

He warned listeners to stay away from candidates who change jobs frequently.