With a number of well-recognized HVACR brands, International Comfort Products (ICP) is a company that serves a growing base of customers both in North America and overseas. While these brands have fueled ICP's growth, the company recognizes very clearly its success is due, in large measure, to its network of distributors across the country.
That's why Herman Kling, ICP's president, is so passionate about the company's commitment to the two-step distribution system. Kling views ICP's relationship with its distributors as a partnership, and he and his employees do whatever it takes to strengthen and grow those relationships. “We are totally committed to two-step distribution,” Kling says. “Everything we do is geared toward our distributors and helping them work with their dealers to be more successful.”
ICP, based in Lewisburg, TN, manufactures and markets a diverse lineup of HVACR products — from entry-level to high-efficiency, full-feature models — on both the commercial and residential sides. Its brand names include Heil, Tempstar, Arcoaire, Comfortmaker and KeepRite.
While ICP has expanded through acquisitions and ICP itself became a member of the United Technologies Corporation family in 1999, Kling notes that the company's management structure remains small and flexible. That has allowed ICP to react more quickly to market changes and stay in close touch with its distributors and dealers. And ICP has not strayed far from its roots. Its headquarters in Lewisburg, TN, are across the street from the old factory for the heating products company, founded in the 1880s, to which ICP can trace its beginnings.
Kling's philosophy about ICP and its partnership with distributors goes beyond just words. ICP has demonstrated time and time again that it will work directly with distributors to help them build their business. Over the years, ICP has developed solid relationships — built upon open and honest communication — between ICP and its distributors. “If you don't encourage communication and get feedback from your customers, you're going to be wrong,” Kling says. “What you do this year might not be right for next year because the market is so dynamic. If you stop listening to your customers, you've lost touch with your market.”
When ICP began planning for the transition to 13 SEER in mid-2004, about a year-and-a-half before the actual change occurred, it recognized that the new products would be larger and take up more space on trucks and in warehouses. Through their ongoing discussion with distributors, the ICP management team realized that most distributors were unprepared for what could be a logistical nightmare. So ICP sent teams to distributors' warehouses to help them create new, more efficient layouts to maximize space and minimize costs. “Distributors are under tremendous pressure in terms of keeping their costs low, and this was a way to help them out,” Kling says. “We're still going out and helping folks today. As they grow, we try to help them be more efficient without adding costs.”
Southern Refrigeration Corp., an HVACR distributor based in Virginia, is an example of how ICP's focus on partnership has worked for both manufacturer and distributor. A distributor of Heil Heating & Cooling Products, Southern Refrigeration faced a design dilemma for their new, 70,000-square-foot distribution center in Roanoke. The company needed additional warehouse space to accommodate the move to 13 SEER equipment and more dock doors to handle the increased delivery traffic, said Gary Click, Southern Refrigeration's executive vice president.
So they picked up the phone and called ICP's Doug McKay, the distribution center manager, and Buddy Clark, pilot of the ACE (Achieving Competitive Excellence) quality program, for help. “We could not have done this without them,” says Jack Lang, the president of Southern Refrigeration, of the ICP team. “We had never embarked on a project of this magnitude, and we wanted it done correctly,” Click says. “Doug and Buddy have an acute knowledge of warehouse planning and thankfully they were willing to help.”
ICP's Distributor Advisory Council (DAC) has been an important way to keep the conversation flowing between the company and its distributors. Kling acknowledges that DACs are not unique in the industry, but what sets the ICP DAC apart from others is the rapport and mutual respect that has been built over the years. “Candor is a number one priority,” Kling says. “We'll go in with ideas that we think are the best things that ever came along, and the DAC is not afraid to tell us that we're wrong or how we can change it.” It's that collaborative process that results in the best solutions.
This candor between ICP and the DAC resulted in the company's highly successful “No-Hassle Replacement Warranty” program. The program first debuted in 2005, but it had a full launch in 2006 to coincide with the rollout of 13 SEER products. The warranty, which gives the homeowner a new replacement unit if a compressor, coil or heat exchanger fails during the “No-Hassle” period, came about with the feedback of the DAC. It also encouraged dealers to talk to customers with greater confidence about higher-end products. “It was all brought out through research, and we worked hard with everyone to make sure we had the right balance with the coverage and without going too far to either extreme,” says Lisa Townley, ICP's director of marketing.
ICP was able to offer the “No-Hassle” warranty because of the company's renewed confidence in its products. “In the last few years, we have significantly ramped-up our focus on quality,” Kling says. “Consequently, we are seeing great results which translate into stronger product quality — and promotion of this quality — to the homeowner.” In addition to a higher quality, ICP continues to add new products to its lines. In fact, ICP launched more than 100 new product families in 2005/2006 while gearing up for 13 SEER.
ICP did not design these new products in a vacuum. ICP's marketing team worked closely with all the parties up and down the supply chain to ascertain the needs of the consumers, contractors and dealers. The result: products that are quieter, more resilient and easier to install and service. For example, the mainline condensing units now have side access panels that give the technician a clear shot to the compressor without having to navigate around coils. “The technician can get in and get out a lot quicker,” Kling says.
And the feedback loop does not end once the products are on dealer shelves. After products have been on the market for about six months, dealers engage in a second round of reviews to determine how the product is doing and how ICP's design and engineering team can make them even better.
While ICP's engineers continue to improve and create new HVACR products, its team of trainers has been fanning out across the country to work with the dealers. The beginning of 2007 marked the third year that ICP has held its nationwide Victory Tours. The initiative began in 2005 as a way to prepare dealers for the 13 SEER transition. The primary focus during the first Victory Tour was to get dealers acclimated to the R410A products and included an opportunity for them to earn an ICP R410A certificate of completion. The Victory Tour was a huge success. More than 3,000 dealers in more than 30 cities received training. Not only did they gain the technical knowledge, but the HVACR dealers had time to prepare for the challenges that were ahead in the 13 SEER transition.
ICP expanded its Victory Tour in the second year to focus on the new 13 SEER products, and more than 3,500 dealers were trained. “We were able to get the dealers comfortable with our new products, and it has paid off,” Kling says. “We had a great season last year.” The third Victory Tour will hit almost 40 cities, and Kling expects to reach 4,000 dealers. This tour focuses on training on the new, higher-efficiency, two-stage air conditioners and heat pumps with variable-speed blowers and dual-fuel options, Kling says. “It's a good introduction to the two-stage world and how it ties together with variable speed,” Townley says.
While the Victory Tours have been popular, ICP also supports its distributors with other training methods and sessions. Four mobile training centers are constantly moving about in response to specific requests. ICP has also developed a suite of Web-based training programs for a more convenient option. This training is an ICP effort to create a stronger support system for dealers through a new series of websites that will include training and product and marketing information. Strengthening the relationship with dealers, Kling says, is important and in no way takes away from the distributor-dealer relationships. “We think there are things that we, as a manufacturer, need to do to help their dealers,” he says.
ICP has worked closely with its distributors to create a strong marketing program. Called the Marketing Advisor Program, the effort began about four years ago. ICP's marketing team works hand-in-hand with distributors to create a focused program that truly meets the needs of each distributor. The Work Your Way Outdoors dealer promotion allows a distributor the flexibility to customize a promotion for their local market and yet offers a full range of support for easy implementation to help distributors market those products that make the most sense in their market. Having more than one brand of HVACR products provides ICP with the flexibility to help create more individualized programs.
After all, Kling says, good distributors know their markets. “What we've seen in the last couple of years with 13 SEER is that we couldn't have done that by ourselves. We're not close enough to the local markets,” he says. “We have a good macro-level view, but the local distributor has the opportunity to get the pulse of the local market.”
And that is what makes the two-step distribution system so valuable to ICP, Kling says. He notes that 2007 marks ICP's 30th year as a member of HARDI, and “two-step distribution will continue to be a part of our world as far as I can see.”
Michael Maynard is a business writer based in Providence, RI. He writes frequently on HVACR, construction and architecture issues. Contact him at [email protected].
Company At A Glance:
President: Herman Kling
National Sales Manager, U.S.
Mike Du Four
General Sales Manager, Canada
Director of Marketing
Director of Product Marketing
Director of Operations
Director of Operations
650 Heil-Quaker Ave.
Lewisburg, TN 37091
Operations: Manufactures residential and light commercial gas furnaces, split-system air conditioners, package air conditioners, split-system heat pumps, package heat pumps, oil furnaces and package gas/electric combination units.
Breakdown of Sales & Business: N/A
Major Product Lines: Arcoaire®, Comfortmaker®, Heil®, Tempstar® and KeepRite® brands of residential and light commercial heating and cooling products.
Annual Sales: N/A
Definition and Example: ICP provides a no-cost service to help its distributor partners design warehouses and plan inventory management logistics to optimize operations and hold down costs.
Significance: Distributors face increased pressure on warehouse space and inventory logistics due to both increased size of higher-efficiency products and continuing growth in sales.
Benefits: Helps distributors reduce inventory costs and better position their inventories to have the right product mix in stock to meet needs of dealers, contractors and homeowners.
Procedure: ICP Distribution Center managers review distributors' warehouse needs and growth projections then work with builders, architects and planners to optimize use of space and improve inventory-handling procedures in new or expanded warehouses.
People involved: ICP Distribution Center managers, distributor management, builders, architects and logistics planners.
Cost: Free to ICP's distributor partners.
Other considerations: ICP began offering this service in mid-2004 to help distributors prepare for the challenges of the 13 SEER federal minimum efficiency standard that took effect in January 2006. ICP continues to offer the service to help distributors meet the demands of continuing sales growth.