Significant changes in the rental industry occurred at an amazing rate in the last year with two years. From consolidations the scope of which we haven’t seen previously…Aramark purchasing Ameripride and Cintas purchase of G&K … to push back from buyers on lengthy contracts to new competition from internet merchants, disruption is the norm. By far, the most welcome change has been the great economy which has produced substantial growth for Members in both the rental and direct sell segments.
We recently talked with Steve Kallenbach, American Dawn’s Director of Marketing Solutions, to get his take on opportunities and challenges for the Independent in the future. KBach states, “The great economy and major consolidations have created a unique opportunity for the Independent that has frankly never been seen before.”
Any time major market consolidation occurs, turmoil follows as customers wonder what’s happening next and if service will be the same. Laundries that differentiate themselves from the large firms are doing well. Typically, the market responds to price as the key driver. However, in the current market scenario, many buyers are looking for reliable service. Having a solid reputation as a local supplier gives Independents a foot in the door with accounts they normally would not get into.
Another result of consolidation is that acquiring companies have switched from offense—they were looking for every opportunity they could find—to defense. With consolidation, they are trying to save all the business attained in the acquisition. The result is that they don’t have the resources they would normally assign to chase new business. This is an unparalleled opportunity for independents that has never been seen before.
With the economy thriving, timing could not be better, opening up opportunities that have not existed previously for Independents. With 4% GDP (And a projected 5% GDP which we have not seen on our lifetimes!), we are seeing a surge of jobs and companies are looking for new partnerships. Many of the new jobs and much of this growth is in industries that typically use uniforms and other services offered by independent laundries.
Take Advantage of the Opportunity
During times of volatility, contracts are not as easily renewed, especially if the original contract was with a different company. Now is the time for independents to go after new business as it becomes available.
- Independents need to position themselves as stable, local, long-term businesses in all of their marketing and sales material. This is a good time to look at their print material and internet footprint to ensure that these attributes are clearly stated in every interaction with prospects and customers. Phrases such as “family owned” and “local business” may sound like an old story but there are “new ears” in the marketplace and the message of stability will resonate with prospects that are experiencing uncertainty with their suppliers.
- Just as a barge cannot change direction quickly, large corporations have a difficult time reacting to change as fast as their customers would like. Independents are the speedboats of the industry. Focus on the fact that small companies react faster and with better customer service than larger suppliers.
- Don’t be shy about your association with Universal Unilink. Let your customers know that you have buying power as part of a national purchasing group. Your prospects will want to know that you have access to many of the same products and suppliers as the nationals. Your involvement in the buying group helps keep their pricing competitive and your exceptional service insures that they have the products they need on time, every time.
Director of Market Solutions
ADI American Dawn