Recently two prominent Texas rep firms in the AV/wire/automation industry, Houston-based KK Associates and Fort Worth-based Lucas Sales, formed an alliance to create Integral Marketing Associates. Under this model, the two firms will divide a four-state area including Texas, Louisiana, Oklahoma and Arkansas, with the Lucas team managing all northern markets and the KK team managing all southern markets.
Ken Kingdon and Steve Lucas give the answers behind their bold move.
CR: What led your two rep firms to create this joint venture?
The two of us have been friendly competitors for over 30 years. Whenever you are in a competitive environment, you meet people that you would want to have over for a backyard barbeque, and you meet others that you would prefer never to see on a social basis.
The first time we met was while working as salesmen for Joe Brown at Home Entertainment. Home Entertainment was the premier audio video retail store in Houston at the time.
As the years have progressed and our industry has changed so dramatically, it’s become clear to both of us that existing business models will not exist in five more years. So the choice was between being proactive and create a new model or else watch our own companies struggle as we have seen so many others do.
Let’s face it, some highly respected rep firms have closed their doors in the past three years while others have reduced staff and operate as a one-person enterprise.
We wanted to improve the overall performance of each operation and provide a more consistent level of customer fulfillment.
By reducing the footprint of each company in half, we can concentrate on serving our manufacturers, custom installers and retail customers in a more personal manner, offering a lot more face time due to less windshield time.
We have each been approached by other rep firms to consider a similar model, but we felt that this was the ideal match in regard to business philosophy, staff capabilities and trust.
CR: What made your companies such an ideal pairing?
We can’t overemphasize the word “trust.” Because we have known each other for so long, and because we have seen how the other conducts business in a fair and straightforward manner, we are a natural fit.
Many of our manufacturers have even commented that we have so much in common with one another in how we conduct ourselves professionally.
And the most natural pairing was the fact that we carried so many complementary lines. By combining forces, each of us is adding lines that the other had on a somewhat exclusive basis in our territories, so we are both opening doors to grow our business.
Instead of two, three-man outside sales teams located in one market under the old model, Integral Marketing Associates now has a six-man sales team with offices in three strategic markets.
CR: How much duplicate travel and time on the road overall do you feel that you are saving?
We have spent far too much of our time behind windshields driving from Amarillo to Brownsville, New Orleans to Little Rock. We are trading ‘windshield time’ for ‘face time’ with our customers.
Ken used to make 20 round trips from Houston to Dallas plus eight trips to Amarillo. That totals about 18,000 miles right there. Then figure that Steve was making those same Fort Worth-Houston runs plus trips to Austin, San Antonio and Louisiana, and he was in the 30,000-mile range.
Then add the miles that our complete sales staffs traveled and it’s likely that we can easily save over 100,000 miles between the two of us. At 50¢ per mile, that’s $50k or $25k for each of us.
Then consider the efficiency because we are in front of our customers more frequently when they need us. That leads us to become their preferred provider, the one they can count on more often.
CR: We’re seeing some long-time rep firms close their doors in this business environment. What do you see as the long-term solution in the industry?
We feel that joint ventures like ours represent the future of not only this industry, but many other industries, as well. The most successful companies are those that super-serve their customers, anticipating their needs and being there on a timely basis. The only way to do that is to cut down on the territory that you are handling and become the expert in that physical region.
We will ultimately see fewer rep firms, either due to some closing their doors or due to them joining forces to create greater efficiencies, just as we have done.
CR: There will obviously be some hiccups with changes in territories with some of your salesmen having strong contacts in markets they will no longer serve. How are you working around this?
We recognize that there will be unique situations and we’ll work around them. Ken has developed some close relationships with customers in the northern half of Texas and Steve has earned the confidence and trust of customers in the southern half, and those are relationships that we will need to transition.
By keeping Ken, Steve and our teams in the loop during the transition times, and super-serving our customers, we are confident that we will not just maintain business, but grow it.
And that’s our ultimate goal. Neither of us is doing this just to cut costs and maintain the existing business volume. We are focused on growing our business through providing superior service and availability to our customers.
CR: How have your customers and manufacturers responded thus far?
So far we have added three more lines in the categories of projectors, seating and networking. Manufacturers know that having more face time with custom installers and retailers will definitely result in stronger sales, both in the short- and long-term.
Our customers are impressed that we are responding to them in a more timely manner and we are already experiencing growth among these existing customers.
Most importantly, our customers are now introducing us to their friends in the business so our referrals are growing.
Customers will now have a single contact for many of the premier lines in our industry, and that contact now has a smaller geographic area to cover with more time available to respond to customer needs. We should have made this move a long time ago. CR