OCS Drives Full-Line Vendor's Growth

Personal customer service is important to O’Malley and Hartnett. Coffee is delivered by a dedicated OCS driver to 98 percent of their accounts instead of using a delivery service such as UPS. This is possible because of Commercial Coffee Service’s relatively small servicing radius, no more than 60 minutes in each direction. If a company requests service outside the servicing radius, O’Malley and Hartnett will run numbers to determine if it is feasible. If not, they recommend them to a friendly competitor with whom they don’t directly compete. “We’ll recommend them to an operator whose service radius doesn’t really overlap ours,” said Hartnett. “A vendor we’ve built a relationship with in BVA (Better Vendors of America) or IAMC (Illinois Automatic Merchandising Council).”

Another way Commercial Coffee Service communicates with its OCS customers is by putting out table tents in the breakrooms when a coffee machine has been serviced and cleaned. Previously, accounts wondered if the equipment was being cleaned, since this was referenced in the proposal and they didn’t see it done. The table tents reassure customers the machines are clean and Commercial Coffee Service is concerned about the service they provide.

The growth in OCS has been completely organic.

“We never bought a competitor,” said O’Malley. Instead, the company has lots of referrals and visits many potential customers. “As for myself, I love going out and doing the coffee demonstrations,” said O’Malley.

FULL-LINE VENDING PROVES TO BE AN ASSET

Many OCS customers also ask Commercial Coffee Service to provide other items, such as soda or water, when they find out it’s a full-line vending operator. It’s not unheard of for OCS and vending locations to request Commercial Coffee Service/Food Systems to put the machines on free-play or provide different coffees to boost morale.

Although the gains have not been as significant as OCS, vending remains a viable part of the business. In the last few years, the company has heavily used gold dollar coins, and added $1 and $5 changers to machines. Any spare money Hartnett can find goes into upgrading product delivery systems, changing cold food machines to spiral, experimenting with LED kits and new equipment.

“Recently, we bought the Crane’s new Merchant Six that accepts $10 and $20 to recycle $5’s back to the customers,” said Hartnett. This is a direction Commercial Food Systems intends to pursue rather than cashless readers.

One move O’Malley and Hartnett have made is to buy almost all their own beverage machines instead of using bottlers’ equipment. “I’d say 95 percent of the equipment out there are our machines,” said Hartnett. The advantage is that Commercial Food Systems can have a Coke product and a Pepsi product next to each other. “If we don’t do that, competition will,” added Hartnett.

Commercial Food Systems also reconditions its own equipment. Hartnett not only uses paint to give the machines a face lift, but also Tuffronts’ covers. “I love them (Tuffronts),” said Hartnett, “I use them on almost everything.”

Product reconfiguration is ongoing for Commercial Food Systems. While they maintain quarterly planograms for 80 percent of the machine, Hartnett regularly tries new products in the wild card spirals. “I like to bring in different products with different price points,” said Hartnett. An interesting consumer reaction he’s noticed is that once the price point breaks a $1, such as $1.25, the $1 price point looks much lower by comparison.

With price being a big issue for consumers, Commercial Food Systems recently implemented “value vending.” For customers who base their decisions on cost, rather than healthfulness or brand, there’s a single shelf in a glassfront machine that carries less expensive products like Diet Rite or RC Cola.

Although this is a new program, Commercial Food Systems ran a similar program for its 45th anniversary. For the entire year, the prices for one or two items were 45 cents or less. The company had point-of-sale clings made for the machines and spiral stickers denoting the anniversary-priced items. “Each month, these items flew off the shelves,” said Hartnett.

Hartnett and O’Malley negotiated aggressively with product providers for these items. Anticipating a higher volume, they were able to negotiate for a reduced price or additional products. After the 45 cents for 45 years promotion ended, a lot of customers talked about it. Commercial Food Systems plans to do it again, perhaps for its 50th anniversary, for 50 cents an item.