EDITOR'S NOTE: Whenever a wholesaler adds a new line, as one owner said to me, “It's a big deal.” When Munch's Supply added a new line, I thought it made sense to understand some of the rationale that went behind the decision and more about the background of the company that did it. This Q&A provides insight into the company and its decision.
As a family business since 1956, what do you think Munch's Founder Willard Munch would say about the operation today?
Bob Munch Sr. (2nd Generation) - My father used to say, “Teach your children to have respect for everyone connected with your business - your employees, your customers and your suppliers. Without these people, you cannot succeed.” I think he would be proud that this has been a consistent message about our business and we have passed it on to the third and now fourth generations.
Bob Munch Jr. (3rd Generation) - My grandfather had great intellect and strong math skills. One of his favorite things to do was to review all handwritten tickets for pricing and mathematical errors. This was in the days before computers, when everything was done by hand. I think the size and scope of the business today would be beyond his wildest dreams, and the way in which processes are now automated would amaze him. He came from the generation where you didn't trust computers, so I would be curious about how he would feel today. I picture him sitting in his rocking chair, and using his iPhone to monitor the copper market.
You have a history of constantly evaluating your business. How have you become better at your business in the past year or two?
Bob Munch Jr. - Business never stands still. Our goal each year, each month, each day is to find improvement. With the recent growth our company has experienced, the areas in need of improvement become much easier to find. Our main goal is and remains customer service. It is front of mind in everything we do. Treating your customers as you would want to be treated has to be emphasized every day.
What kinds of questions are customers asking today, and how have those questions changed from the past?
Bob Munch Jr. - I have been in the business for more than 25 years, and customers have become more sophisticated during that time. They are increasingly aware of labor and expenses. Services or high-quality products that save them labor are much more important today. When it comes to money spent on marketing, it's all about producing the most leads at the lowest cost. Their questions tend to be: “Where can I best spend my money to get the most results?”
Are your branch managers still your key to success?
Bob Munch Jr. - I don't think success relies on only one position in our company but all positions. While each role has different duties and responsibilities, each has equal importance. When one person performs and goes above and beyond, the results directly impact success. However, when you have a group that is performing together at a high level, the rate at which it impacts success is exponential. It is that group performance that we strive for.
In the early 1970s, you got into HVAC. What has it been like being the first American Standard & Air Conditioning distributor, and how has that impacted your relationship with American Standard contractors?
Bob Munch Jr. - We had the privilege to be chosen as the first American Standard distributor in 1988. I remember being in Tyler, Texas, when the first air conditioner rolled off the assembly line, and we are proud to say that relationship has continued strong to this day. That long-term relationship with the manufacturer translates into a familiarity and trust with the contractor that is immeasurable. Producing a quality product only translates into customer satisfaction when you have the best contractors installing it. We had customers become American Standard dealers the moment we took on the line who are still dealers to this day. They continue to believe and trust in the quality of the American Standard brand and the service and support of Munch's Supply.
In 2010, you decided to add Trane to your business. Can you tell me more about making the decision to carry a second line, and how is it working?
Bob Munch Jr. - We have always tried to let our performance speak for itself. We have a history of strong performance with Ingersoll Rand that created an opportunity with the Trane line. Trane also has a history of performance, along with excellent quality and reliability that provide a perfect fit for Ingersoll Rand and Munch's Supply.
How has the HVACR contractor's business changed over the past few years?
Bob Munch Jr. - I mentioned earlier that the customer has become much more sophisticated. The market drove toward a higher level of performance. Homeowners demanded it, and for those contractors that didn't change, they saw their business diminish. At the distribution level, we have seen the same forces drive a similar change. The bar continues to get higher for everyone.
What changes have you made to the offerings of your inhouse marketing department, and are you seeing more contractors taking advantage of this service?
Claire Munch (4th Generation) - We see customers broadening their reach by using many different mediums to market to the consumer. While we still offer services relating to the more traditional forms of marketing like direct mail, more and more dealers are requesting our assistance with marketing using new technologies, Internet advertising and social media. We have expanded our offerings and partnered with experts in these new areas to make sure that we are giving our dealers that competitive advantage needed when it comes to marketing.
In today's economic environment, is flexibility still the key to business?
Bob Munch Jr. - I think flexibility is important regardless of the economic environment. Flexibility was important 30 years ago and is still important today. However, it is not the only key, as business is so complex that you need to master every aspect in order to succeed. Someone out there is doing it better and wants your customers. The challenge you face tomorrow may be different than today, so quickly adapting to that change is critical.
What have been some of the secrets of your success when it comes to your business plan, marketing and building contractor relationships?
Bob Munch Jr. - I don't think there are any secrets to what we do. There aren't any great mysteries left in distribution. Anyone can pick up a book from Texas A&M or NAW and know exactly what to do and know how the best distributors are doing it. We tend to be fairly transparent about how we go to market and our goals in servicing our customers. Knowing what to do and actually doing it are completely different. They are things that every distributor and every business are challenged with. I like to think that at the end of the day, we are better at some of those things than our competitors. That is entirely due to our staff and their efforts.
If you could do one thing differently as a business, what would it be?
Bob Munch Jr. - Only one thing???
What is the best piece of advice you could give other distributors?
Bob Munch Jr. - That is not our mind-set, as it seems to carry with it a certain arrogance. When you operate a business working toward constant improvement, you never think about it in terms of giving advice. Instead, we are searching for improvement. You always think things can be a little better and look for those opportunities. When that constant improvement becomes the culture, you can produce some impressive results.
How has it been having the fourth generation of the Munch family join the business?
Bob Munch Sr. - I am very thankful that our business is growing and prospering into the fourth generation. As we all know, the vast majority of businesses never make it past the second generation. I feel it is my responsibility to show my grandchildren that they will not be treated differently than anyone else. They all have a great opportunity but they must earn their positions.
Bob Munch Jr. - There is a certain pride in seeing the fourth generation make their mark. It becomes even better when you have a talented group of young individuals within this fourth generation who have the skill sets to actually contribute and help raise the bar. We are lucky enough to have that with not just the fourth generation, but even greater, with a group of nonfamily staff who are beginning a career with the company. This group is setting the stage for great things to come.
What has been the best part of being a family-owned business?
Bill Munch (3rd generation) - The best part has been the entire Munch family - our employees, our customers and our vendors. We have all worked in the business from our early grade school days. Whether it was putting together closet bolts at the kitchen table, sweeping floors or, in my brother's instance, changing the litter box, there was always something for us to do. It has been enjoyable to see its growth through those early years, to where we are today. Our employees and customer relations through the years have played an important part in that growth. Another key to the growth has been the strong partnership we have developed with Trane and American Standard. This is a special relationship. We consider them an extension of the Munch family.
Claire Munch - As any extended family does, we all have our own families and things going on at home that keep us busy. There is not always time to see one another outside of work on a regular basis. I really appreciate being able to spend a few minutes each day catching up with my family members and having one-on-one conversations at lunch or when traveling that wouldn't happen as regularly otherwise.
What is the best business advice you have learned from your dad/grandfather?
Bill Munch - There's a sign at the doughnut shop that our father often visits on his frequent fishing trips to Michigan. It states: Pick Two - Price, Quality and Service. His vision has always been to provide our customers all three of these: competitive pricing, high quality and excellent customer service. Being able to provide our customers all three of these has been an important part of everything we do at Munch's Supply.
Claire Munch - Both my dad and grandfather instilled in me the importance of hard work. My grandpa always says, “Work Hard All Day, Every Day.” It has always been important to them that we know nothing in life is handed to us. In order to succeed, you must put in the effort.
How has it been working with your parents and grandparents, and what have you learned about being a multigenerational family business?
Claire Munch - Working in a multigenerational family business gives us the advantage of multigenerational perspectives. The world my grandfather grew up in was much different than mine. We have different life experiences that give us the opportunity to really look at one concept from several different viewpoints and utilize the strengths of each of those viewpoints to our full advantage.
Tom Peric´ is the editor of HVACR Distribution Business. Contact him at 856/874-0049 or [email protected].