Pro Kontrol is a wholesale distributor that knows how to maintain its focus. After 25 years in business, the company is all about HVACR controls, its customer service and technical expertise.
"We fire the customers that we cannot help in their business," says Pierre Martin, president and co-owner of Pro Kontrol, based in Laval, Quebec. "The ones who do not value the value-added that we bring, those customers belong to our competition. We manage to keep only the best customers."
This is the philosophy that has guided Pro Kontrol since its founding in 1985. Pierre Martin and Marc Bergeron joined Pro Kontrol in 1985 after graduating from technical school, then purchased the business in 1991. The founder was an HVACR controls contractor who realized he could use his technical expertise and experience to help other contractors by becoming a distributor. That emphasis on expertise is what has always separated the business from its competitors. "It was the first Canadian HVACR controls-only wholesaler," Martin says. "And we still sell no equipment."
Pro Kontrol is headquartered in Laval, located just outside of Montreal, and operates branches in Ontario and Nova Scotia and two additional branches in Quebec. The business has grown through Pro Kontrol's acquisition of three companies. "We acquired these companies with great potential, put our recipe in place and ended up with great results," Martin says. Pro Kontrol has no formal acquisition and growth strategy, he says, but he and co-owner Marc Bergeron keep their "eyes and ears open and we grab the opportunities." Pro Kontrol would like to enter new markets and always looks for the right partners to emerge.
So what is Pro Kontrol's "recipe" to produce great results? "World class customer service, the most committed people and major brand products of top quality," Martin says. Surely, these are terrific ingredients for success, but it takes more than just words to make this come to life. What ties all of this together is Pro Kontrol's philosophy of making it easy for their customer, he says. That means asking them the right questions at the beginning of the process and being as proactive as possible. This helps avoid mistakes down the road that can lead to delays and higher costs. By the time the order is placed with Pro Kontrol, the customer knows that he is in good hands. "They don't have to worry because they know that we're taking care of it," Martin says.
Pro Kontrol takes care of it with its technical expertise. The business is less about selling and more about taking a "counseling approach" — analyzing the specifications or controls requirements of the job and then selecting the right products that will make that contractor — and its project — successful. Working with customers as partners gives Pro Kontrol's 50 employees the opportunity to focus on customizing solutions without the pressure to sell them products. "Many wholesalers out there think that wholesaling is about keeping the stock in back warm and dry," Martin says.
In addition to the technical training that employees receive from HVACR manufacturers, Martin notes that people who possess this technical ability "are curious by nature and they learn by themselves and also learn a lot through the Web.” Pro Kontrol has been a HARDI member since 1996. Martin says Pro Kontrol "gains a lot as a company" through its involvement with HARDI.
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But customer service is more than just technical ability. Wholesale distributors must have people throughout their business who truly care about their customers and understand that the success of their customers reflects back on them. "Our team is strictly made up of people who are motivated by success," Martin says. "These people are very reliable; they show up on time every morning with a winning attitude. This is what the customer feels and hears over the phone, and this is why they come to us." Because Pro Kontrol sets the bar so high for customer service, Martin acknowledges that it is not an easy company to work for. "But our team is very proud to deliver the best, and whenever they get compliments from customers, they get compensated for their efforts. This is something money cannot buy."
So customers know that when they work with Pro Kontrol, they're getting customer service that allows them to focus on the jobs at hand and future jobs rather than worry about whether the HVACR controls will arrive in time or if they're the right parts. Customers that Pro Kontrol has "fired" have been less concerned with quality. These former customers are forever trying to negotiate lower prices without regard for the products that are going into the project. "Ultimately, they're never going to be happy," Martin says. "They just expect us to be in the more traditional wholesaler role."
Fortunately for Pro Kontrol, its customers count on the added value and remain loyal. In fact, customer word-of-mouth is at the heart of Pro Kontrol's marketing program. As positive comments from customers continue to fuel Pro Kontrol's growth, Martin says the company is in the process of bringing on new outside salespeople in the Toronto and Nova Scotia markets. Pro Kontrol employs four people in outside sales, mainly in the Montreal market.
Martin says there is little competition in the parts replacement market because customers appreciate Pro Kontrol's differentiation of its customer service and technical expertise. But there is much more competition in new construction (Pro Kontrol only serves the construction/industrial markets), where being the lowest bidder counts. "It gets harder to sell the value added," Martin says. While the margins may be low on such projects, the amount of work involved still makes them viable to pursue and win.
Another strategy employed by Pro Kontrol is utilizing its own line of VAV/RTU controls for commercial jobs that call for full-blown DDC solutions. Often, Martin says, smaller systems will do a better job and at a lower labor cost. Pro Kontrol's ProLon line of controls "gives us a serious edge and allows the customer to install a very flexible controls system, with all the main features of DDC being remote access and the possibility of being integrated with other DDC systems using BacNet, Lon or Modbus protocols."
Martin says the global recession had less of an impact in Canada than in the United States. Of course, the fact that the United States is Canada's No. 1 trading partner certainly had an effect, but there were few job losses, and there is more optimism about the future among Canadians than Americans. Martin says Canadians are not afraid to spend money.
One issue of perennial concern to Canadian HVACR wholesalers — and other Canadian businesses — is deflation caused by the fluctuation of the Canadian dollar. That is, when the Canadian dollar increases in value over the U.S. dollar, the cost of products sold in Canada decreases. "We end up doing the same margins, but on fewer dollars as our costs continue to rise," Martin says. "Also, we take a serious hit on our inventory when this happens." He uses the example of 20 percent devaluation on $500,000 worth of inventory. "This directly hurts the bottom line!"
Pro Kontrol prides itself on running a lean and efficient operation, which is a necessity, Martin says, considering the very low inflation of the electronics controls that the company sells. "These controls are less and less expensive, and our costs to support the sale increases more than the cost of the product," he adds. "This forces us to be more efficient and reduce the costs in our business by being more efficient."
When Martin talks about being efficient, he refers to everything that Pro Kontrol does, from its employees asking the right questions of its customers (saving them time and money that can result from costly change orders) to how branches are organized and operated. The branch locations are autonomous, Martin says, so they can adjust to local market needs. The Laval headquarters is not really a home office, but a "central services office," as he refers to it, where the support team is based. IT and communications are centralized at the customer support center.
This autonomy extends to purchasing some of the controls products. "Most of our branches are autonomous for purchasing the big movers," Martin says. "For slow movers, we buy them from the branch where demand is greatest and then redistribute the products to meet minimum stock requirements in each location." Items bought directly from foreign countries also are bought from a central location where demand is greatest in order to consolidate shipments at the border to save on customs broker fees.
Because the branches serve different geographical markets, the approach to selling may differ by branch. But that's what makes local control so important: local employees know how to take care of their local customers. Pro Kontrol customers know, however, that they have the expertise of the entire company regardless of which branch they go to for their controls. "Our customer front-line people can count on the support of all their colleagues who are available at the touch of a button — wherever they are across our group," Martin says. "Customers can get answers right now by speaking with the specialist each time."
Customers have come to expect that Pro Kontrol is there not just at the beginning of the order process, asking questions and ensuring that they are providing the right controls, but they're also there at the end of the job, too. "We make sure all our jobs, once delivered, are working well," Martin says. "We assist the customer in commissioning the job and we make sure everything works fine before leaving the job. We cover a huge territory, which includes Iqaluit in Nunavut territory. These jobs must be tuned 100 percent." That demonstrates a focus on the customer and not just selling the customer a product.
Michael Maynard is a business writer based in Providence, RI. He writes frequently on HVACR, construction and architecture issues. Contact him at [email protected].