Partnerships Rooted in Expertise Counting on MICONTROLS

Work with MICONTROLS Inc., the wholesale HVACR Controls Specialist located in Seattle, WA, and Portland, OR, and you've got yourself a partner who knows the controls business like few others. Contractors, architects, engineers and building owners who rely on MICONTROLS for their projects know this: They're getting a distributor that will be there from the beginning of the sale through the successful installation — and they'll be there for the next project as well.

MICONTROLS sells commercial and industrial controls, DDC systems, valves and instrumentation. The sales counters at their two centrally located stores hum with customers every day as contractors stop by to pick up orders and to seek advice from well-qualified salespeople.

But it's the project business, technical support and customer training where MICONTROLS separates itself from the others. “The training and the expertise have always been fundamental to our business,” says Steve Roe, president of MICONTROLS. “Although we haven't changed that much in terms of how we provide customer service, our level of technical expertise has grown deeper and is usually ahead of the curve.”

MICONTROLS is an amalgam of several companies in Seattle and Portland that began by serving the oil and gas heat and HVACR industry in the Pacific Northwest. The company traces its roots back to 1920 with the founding of Therm Gas Generator Co. of Seattle, where it served the residential oil heat marketplace. Therm Gas also manufactured and installed their specialty oil burners into marine oil stoves for use in the Alaskan fishing fleet industry. In 1951, well-known West Coast hydroplane racer Stan Sayres developed an unvented oil burning heater equipped with wheels that he sold for special heating purposes. His Mortemp Heat Machine Co. later became a division of Carl Schinman's Mechanical Products Co., which marketed the product. In 1969, Therm Gas purchased the Mortemp Division, which went on to become one of the largest and most respected controls companies in the western states.

In Portland, Industrial Control Co. was formed in the early 1950s as a wholesale distributor by Wilson and his son Richard Innocenti. ICC served the oil heat market and later, with Richard's wife Beverly Innocenti and their son Dave running the family business, became the premier supplier of HVACR commercial controls in the state, serving Oregon, southern Washington and parts of Alaska. In 1996, Mortemp Co. purchased Industrial Control Co.

In April 2001, Mortemp and Industrial Control combined to form MICONTROLS. Roe joined Therm Gas in 1973 and moved to Mortemp three years later. He became president in February 2007 after the sudden death of President Jerry Peterson.

While the core focus of profitability and customer satisfaction hasn't changed, the refinement of its values has and includes a high level of teamwork, engagement, expectations, forgiveness and patience, says Roe. With the employees living these values, it's no wonder that turnover among the approximately 30 employees is low. MICONTROLS looks to hire the best people it can, mentor them and give them the freedom to succeed.

Roe, who is based in Seattle, tries to “walk the four corners” daily to check in with his people, a principle encouraged at a past HARDI convention. Dave Innocenti, who grew up in the ICC family business, is now vice president of the corporation and runs MI's Portland location, managing the sales and staff there. “Dave is absolutely great,” Roe says. “His Portland staff and customers trust him completely, and so do I.” Kris Schinman, who joined Mortemp in 1969, is the corporation's secretary-treasurer. “She runs the whole financial side of our business. If she wasn't here, there would be no business!” Roe says, stressing the importance of collections and receivables for the success of a business.

The two stores closely mirror each other in terms of physical layout, management methods and sales expectations. Differences stem from the industries within each market area. Washington is a state rooted in the aerospace, military, refining and chemical industries, while Oregon has more high-tech businesses and steel and paper companies. The Seattle store handles the administrative functions for the corporation, including 95 percent of the purchasing. The Portland store, 160 miles from Seattle, receives daily inventory-transfer replenishment, Roe says.

Having two locations works well for MICONTROLS, as the bulk of its sales rests on customers within the “I-5 Corridor,” which runs through western Washington and Oregon, and connects the two cities. During the past 15 years, MICONTROLS has experimented with locating branch operations in different cities within its marketing area. But they have found that the most successful formula has been to send its people to its customers rather than expecting the customers to come to them. “We sell controls solutions, not just products,” Roe says. With this approach, MICONTROLS works with customers in Washington, Oregon, Alaska, northern Idaho and western Montana.

MICONTROLS is very careful to differentiate its “project” work from selling service products in outlying market areas. “We have a large contractor in Eastern Washington (about four hours from Seattle) with whom we do project business. If they're doing a building or a school, we'll partner with them — but because MICONTROLS does not have a physical location there, we don't go after their other business.” For Roe, it's a question of fairness. “I don't want to go after someone's business unprofessionally. If we were located there, sure, we'd ask for the business. But that flow business belongs to the local distributor, not us.”

The focus on controls solutions underlies the strength of MICONTROLS in its pursuit of business in the commercial and industrial sectors. MICONTROLS is unique in that there are few true controls specialists. He points to three technicians who do nothing but provide technical support for the commercial side of MI's business. “This is one of the key strategies we've used to gain the confidence of customers and grow our business significantly, especially during the past five to six years,” he says.

The commercial side makes up more than 55 percent, industrial accounts for about 40 percent of the business, with a small remainder being residential, Roe estimates.

MICONTROLS features two distinct sales teams of commercial and industrial specialists. “Each store has its own outside staff and dedicated inside support specialists,” Roe says, which comprises two levels of technical support for customers when questions or issues arise. The inside sales staff will serve as the first line, and if they can't provide the total answer, the outside salesperson may be called upon to work with the customer. Rarely does MICONTROLS need to bring in factory help. MI's technical support also extends to assisting with writing graphics, programming and commissioning.

Ongoing training is essential for MICONTROLS' sales staff. For example, each industrial salesman recently completed a full week of intense factory training. Follow-up work at home included facilitating a full-day classroom session with the other MI salesmen to present the material they had been taught.

With such technical expertise, competitors will often refer their customers to MICONTROLS for those tough controls issues. The company also maintains a robust training program for existing and future customers at both stores. Such ongoing customer support does not go unnoticed. Roe recalls a major contracting company that recently underwent a change in management. When the company conducted a comprehensive review of its business relationships, they recognized that MICONTROLS had provided them with a tremendous amount of consistent technical support and education which had led directly to their success. With this in mind, they gave MICONTROLS the nod — and a much larger share of its business. “That was big,” Roe remarked.

This typifies MICONTROLS' general approach to its customers. After all, a product manual may not answer every question or solve every problem that comes up during a job. “We try to make sure our customers are successful on every job,” Roe says, “and if we can make that contractor successful, then we've been successful. We'll also gain that contractor's mindshare leading to their choosing our products for the next job.”

MICONTROLS also works hard in its relationships with manufacturers, stressing ongoing dialogue and partnership. Through his present role as HARDI's Controls Council Chair, Roe took part in commissioning a survey of members about what's working (and what's not) in their relationships with manufacturers and what can be done to improve them. Several manufacturers were thrilled that the wholesalers would take it upon themselves to help advance the relationship. Roe said he predicted correctly that Honeywell, one of MICONTROLS' major suppliers, would be especially pleased. “They were just grinning,” Roe says, and indicated their support of furthering the dialogue.

“It's my belief that Honeywell really wants to make the two-step distribution channel successful,” Roe says. “It's not just about having reasonable gross profit on every transaction. We have to take a deeper, more long-term view.” Such discussions will continue at future HARDI meetings, Roe says. “The thought is if we concern ourselves more about the right relationships with the right people, then the dollars will quickly follow, and we'll all be stronger.”

MICONTROLS' participation in HARDI has produced tangible benefits for the company, Roe says, including making lifelong friendships and learning from industry peers. The survey by the Controls Council represents the type of proactive work that HARDI members do to make its membership a stronger and more viable force. Roe also cites the HARDI Congressional Fly-In that enabled them to meet with their elected representatives. All of this is done in a manner that Roe describes as “positive and team-building.”

Creating and sustaining relationships are the essence of MICONTROLS, and the corporation practices this at all levels — with employees, suppliers, customers and fellow wholesale distributors.

Roe and his employees relearned the importance of relationships when Peterson passed away suddenly in February 2006. After 34 years with the company, Peterson had an intimate connection to everything within the business. Following his death, Roe, Schinman and Innocenti met with each employee. “They needed to understand that we would succeed — but only as a team,” Roe says. “And every employee agreed, ‘OK, we're in this together.’” Each person recognizes the contribution that they make to MICONTROLS and how they impact the relationships with the customers and suppliers. Says Roe: “We're joined at the hip with our top customers and suppliers — it's working, and we've been blessed!”

Michael Maynard is a business writer in Providence, RI, who writes on issues related to HVACR, construction and architecture. Contact him at [email protected].

MICONTROLS Inc. at a Glance
President: Steve Roe
Vice President: Dave Innocenti
Secretary-Treasurer: Kris Schinman
Headquarters: Seattle, WA
Operations: Seattle, WA, and Portland, OR
Employees: 33
Major Product Lines: Honeywell Authorized Systems Distributor, Honeywell Field Solutions (industrial), Belimo, Fireye, Johnson Controls, Magnetrol, Moxa Sensus Metering
Website: www.micontrols.com
Year Founded: 1920

Best Practice

Our Mantra: “Relationships First,” which starts with employees and extends to suppliers and our customers.

In Reality: Seeking to create, maintain and repair relationships is not always intuitive, not always natural and not always a completely enjoyable process, but almost always, it results in mutual respect and deeper understanding coupled with a no-regrets mentality — and sales.

With Employees: We are a team first and foremost, and everyone's voice is valid, affirmed and vital. All doors are always open, and we are careful to discern what should be considered close-fisted versus open-handed. Most are open.

With Suppliers: We make every effort to err on the side of openness and trust with our suppliers, although admittedly, it doesn't always work.

With Customers: The last things a customer wants are to experience a lack of technical support, a lack of compassion and a lack of loyalty on our part to his/her business. We intentionally seek to grow most significantly with our largest customers (who have made the largest investments) and nurture the businesses of those who are smaller. We are very careful not to dilute our market.

Swallow Hard: It's natural to be defensive when dealing with uncomfortable issues. But it's amazing (and usually typical) that when resolving conflicts in a relation-restoring manner, the issues diminish and often go away.

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