You may not know SPX Corp. or its business segment SPX Service Solutions, but you probably recognize some of its brands of HVACR test, measurement and service equipment, like Robinair, Promax and TIF. Contractors certainly know these names: They rely on these tools every day when servicing and installing HVACR systems.
Owatonna, MN-based SPX Services Solutions and its Test and Measurement division are responsible for manufacturing and distributing its products to HVACR distributors throughout North America. Its primary manufacturing facility in Minnesota produces about 60 percent of its products, with the remainder at other facilities in the United States contracted by SPX.
“Wholesale distributors represent an important link between SPX Service Solutions and the contractors,” says Tim Wagaman, senior product manager, A/C Tools and Equipment. “The biggest benefit is that it helps us get our message to the actual end- users,” he says. Because contractors rely on local distributors for their products, SPX makes sure that it serves its wholesalers correctly to ensure that they will remain strong advocates for SPX. “We rely on them to utilize the relationships that they have with area contractors to get our message and our products out.”
“Strong distribution is a key to SPX's success, so we're committed to full-line distribution of Promax, Robinair and TIF products as we help our wholesalers serve their customers with a breadth of products while delivering the highest level of service and technical support,” says Patrick O'Neill, vice president and general manager, Professional Aftermarket. The expansion to a new primary distribution center not only supports the SPX Service Solutions business transformation but also helps our distribution partners capitalize on the opportunities to grow their businesses.”
For SPX, it all begins with the quality of products. The brands of Robinair, Promax and TIF have a well-deserved reputation among contractors and technicians. “We do have a lot of brand equity with those three brands, and we focus and leverage that as much as we can,” Wagaman says. Each brand has established its identity in the industry for years — Robinair and TIF have been around since the 1950s, while Promax is the new kid on the block, coming into being in 1990.
Robinair is best known for its refrigeration service vacuum pump product line and its air-conditioning and refrigeration evacuation tools. Promax developed its reputation with its proprietary “Oil-Less” refrigerant compressor, and it is the market leader as well as the world's largest manufacturer of refrigerant recovery devices for the service trade technician. TIF offers innovative service test instruments, including electronic refrigerant leak detection and refrigerant measuring devices.
But SPX does not rest on the brand equity that it enjoys. With rapid changes in HVACR technology and new regulations governing the industry, the measuring and service tools continue to evolve as well. Wagaman says the division has a robust and active research and development program that examines existing products and technologies, not just in HVACR but in the other industries in which SPX operates. In fact, SPX Corp., based in Charlotte, NC, is a Fortune 500 multi-industry manufacturing leader that offers highly specialized engineering solutions for customers.
For example, Wagaman's division also develops service tools for the automotive industry. Often, there are advancements with automotive diagnostic tools that may have some application for the HVACR industry and vice versa. “If we're looking at existing products and the ways in which we can improve them, there may be something that we're looking at on the automotive side that we can bring to HVACR,” Wagaman says.
Developing innovative products and a strong value proposition for its products makes SPX a company that wholesalers like to do business with. For example, a contractor knows that when he buys a Robinair vacuum pump, it will do the job and not require him to come back for additional service calls. That benefits everyone in the supply chain.
One of the strengths of SPX, Wagaman says, is the breadth of its product line. “We try to cover 80 percent of the market with our offerings,” he says. Some products may offer some innovative features, but they are all designed with the contractor in mind — helping him to do the job faster and easier. In some instances, the brands offer “good, better, best” product options, and Wagaman says they may expand some of their product lines going forward with such options.
But Wagaman is clear that features that provide no value to contractors will not be part of the SPX product offering. As he puts it, “You can have all the bells and whistles you want, but if they don't serve a purpose or have a specific function, that contractor will say, ‘What the heck is this for? I wasted my money on this?’ You've got to have that tangible value for the contractor to be able to buck up and spend more for the product.”
That's where market research comes into play. The manufacturer spends time with the contractors to make sure that what they're selling is what the contractors want. Not just the tools that they're currently using, but what are the day-to-day issues that they face to get their jobs done. “All the things that we might be able to develop solutions for,” he says. The daily interactions of the SPX sales forces and its reps accomplish much of the market research as they visit dealers and talk to them and their customers.
SPX has tried to raise their brand awareness among dealers by developing more point-of-sale advertising. Getting the products on the shelves and promoting them mean greater sales. After all, Wagaman reasons, dealer stores are, in effect, retail stores, and that requires greater promotion throughout the store. The sales reps are also working with distributors to develop promotional materials, such as sales fliers, that they can send to customers.
The goal, he says, is to create incentives that bring customers into the dealer stores because of special offers. Customers who are intrigued or excited to visit because they have the opportunity to see new products and save money are much more motivated to buy than those customers who have to come to their local branch to pick up a part or two. “We want to be more involved in those types of activities,” he says.
For example, when Promax first introduced a new refrigerant recovery machine last year, the traditional brochure and advertising alone failed to significantly spark sales. By creating a colorful, freestanding display that drew attention to the product — instead of merely stacking them in the corner and hoping they would sell — they increased awareness and sales. “It helped to kick start the sale of that product,” Wagaman says.
When new products are about to be launched, the sales team will visit the corporate offices of the larger wholesaler distributors to discuss the rollout strategy. The sales reps will also visit smaller wholesalers to distribute sales collateral and demonstrate the product. “It all depends on what the product is,” Wagaman says. “It could be brochures, point-of-sale materials, in-store signage.”
In addition to the sales team that is on the road to stay close to distributors, SPX boasts a strong support team. Account support reps have assignments specifically with HVACR wholesalers to help with everything from deliveries to pricing questions. A special technical support group answers the technical questions for wholesalers or their customers. Training and product seminars keep the internal and external sales teams as well as the technical team well-versed in the products and technology.
Beginning in the fourth quarter of this year, the primary distribution center is moving from its Owatonna site in Minnesota to Romeoville, IL, about 30 miles southwest of Chicago. Wagaman calls it a state-of-the-art, 230,000-square-foot distribution center that will improve its customer fill rate and allow the shipping of orders more quickly and efficiently. The Minnesota distribution center will remain open as a second distribution point that is available for use if necessary.
Being a division within a Fortune 500 corporation does present challenges, Wagaman acknowledges. Because the company is in so many different markets, some wholesaler distributors ask if the company can really do a good job focusing on the HVACR market. But he says the folks within the Test & Measurement Division have worked hard to prove themselves to the wholesaler distributors and the contractors. “We've shown all of our customers that we are committed to this industry,” Wagaman says.
Further, both the division and the corporation recognize that HVACR represents a growth market. New technologies mean that the tools and services have to go along with them. “And we've put a heavy emphasis on developing new tools for this industry,” Wagaman says. Look for innovative products and technologies from SPX in the years ahead to help HVACR contractors and technicians. “That's the biggest thing we're trying to emphasize.”
Michael Maynard is a business writer in Providence, RI, who writes on issues related to HVACR, construction and architecture. Contact him at firstname.lastname@example.org.
SPX at a Glance
|SPX CEO:||Chris Kearney|
|Segment President:||David Kolwalski — Test & Measurement|
|Operations:||Global, multi-industry manufacturing company with operations in more than 35 countries|
|Annual Sales:||$4.8B Company ($1.7B Test & Measurement Division)|
|Major Product Lines:||For HVACR Distribution market — TIF, Robinair, Promax|
|HVACR Distribution Websites:||www.promaxrecovery.com, www.robinairHVAC.com, www.tif.com|
Definition and example: Product Development — Engineering high-quality products that provide significant value to customers servicing HVACR systems. Specific examples are 15,600 vacuum pump and Promax refrigerant recovery machines.
Significance: Customers and end- users have products they can depend on to help them service and diagnose HVACR systems. Customers are then able to provide more reliable service to their customers — enhancing their reputation in the industry. Wholesalers can distribute quality products their customers will ask for by name.
Benefits: Customer relationships and reputation of the company will be strengthened using products marketed under the SPX family of brands.
Procedure: Market research to identify the problem areas where there is a need for new tools combined with strong R&D lead to products that have a purpose in the market and benefit all customers in the distribution chain.
People involved: Cross-functional teams from engineering, product management, sales, wholesalers, customers.