OCS operators must pay careful attention to their allied product sales on a regular basis to ensure they aren’t losing sales to other retailers’ online shopping carts, Ragan noted.
Ragan, who serves the greater Washington, D.C. market, reviews customer purchases regularly to see if allied product purchases are slipping. If a customer’s sales are sliding, he contacts the decision maker and brings it to their attention. The first question he asks them is if there is a problem with his service.
“If you don’t pay attention to your account base, they (the office supply stores) will take it (the allied product business) from you,” Ragan said. “That’s why it’s important to run those reports on a daily basis so you see where your sales are falling off.”
Should the customer say that the allied product was purchased while shopping for items that his company doesn’t offer, Ragan tells them his company also offers the convenience of online ordering. The goal is to make the customer aware that they are expected to buy their allied products from him since he can provide them just as conveniently.
If the customer claims that the price is better on a certain item from an office supply company, Ragan reviews with them his overall pricing in comparison to the competitor’s. While a competitor might have a better deal on some items, this will usually be an exception. Office product retailers often discount certain items as loss leaders, Ragan noted.
Chris Sletten, president of Gold Star Coffee Service in Madison, Wis., said some of his company’s paper goods suppliers compete against him by selling direct to his customers. In such instances, he has been able to convince the supplier that it makes sense to allow his company to handle the service. “I think they realize it helps to work with a company like us than to send their own trucks,” He said.
Sletten said this hasn’t been an issue with condiments and food-related items he sources from vending distributors.
OCS trump card: service
One advantage OCS operators always have against office supply retailers, membership warehouse clubs and other merchants that carry office supplies is service. Communicating this advantage requires an ongoing effort on the operator’s part, one that must be installed in the sales force.
OCS operators are in a better position to monitor customer needs than other retail competitors, whether they do route sales or pre-call deliveries. The OCS sales person, route or pre-call, is usually better able to track consumption of these products and to suggest additional products.
Operators in most markets observe that membership warehouse clubs don’t deliver products to customers, and when they do, it isn’t done on a consistent basis.
“There are a lot of reasons why it’s (shopping at club stores) not worth it to them (OCS customers),” said Steve Neighbors, co-owner of Executive Coffee Service Inc., based in Oklahoma City, Okla., referring to the time it takes an employee to go the membership warehouse club and the liability they incur. “The bigger office understands the expense of sending someone there or of being out of something because someone forgot something.”
Consumer choices change
OCS operators also need to be cognizant of the changing consumer tastes in allied refreshment products. Ragan of Joe Ragan’s Family of Companies said customers want more energy drinks and flavored bottled water nowadays.
In paper and plastic products, Ragan has found that everything isn’t about price, even as costs are rising. Ragan has found customers receptive to higher quality paper towels and plastic plates and utensils.
Asked about popular new allied items, several operators cited bottled water, flavored coffee creamers and new flavors of powdered Crystal Light from Kraft Vending & OCS. Several noted that liquid creamer has become more popular as a complement for better quality coffee.
Customers who need to serve clients on premises are more likely to want higher quality serving goods – plates, cups and utensils – to impress clients, Ragan said. “More people are trying harder to sell bigger clients,” he noted. “They’re doing more to impress the clients.”