Culligan Soft Water Service Company: Soft Touch

Corporate Spotlight

Written by John Zorabedian

Thursday, 01 May 2008

Culligan Soft Water Service Company: Soft Touch - American Executive - RedCoat Publishing

John Packard is expanding this water filtration distributor and services company by boosting commercial and industrial sales.

Premier Business Partners:

Cargill

Someone has to supply the office water cooler, a slice of business Culligan Soft Water Service Co., a Minnesota-based franchise of Culligan water products, gladly takes. But as a franchise business paying royalties, this company needs to do more than just sell products—it needs to sell services, too.

John Packard, President and CEO

John Packard, president and CEO of Culligan Soft Water Service Co., said the residential and bottled water segments of the business have fallen off recently due to the economic downturn. To make up for lost business, Packard is focusing his salesforce on the commercial and industrial sectors, where the need for water filtration products and services is strong.

Packard said his company has more than doubled its commercial salesforce over the past 18 months to reach more customers in its franchise regions. The company sells Culligan products and bottled water in 20 markets and six states. In the commercial sector, water softeners (which filter out minerals) are commonly used by laundromats and hotels, because soft water is better for cleaning clothing and sheets and is easier on plumbing. In the industrial sector, the company provides de-ionized water, which is used in manufacturing products such as circuit boards.

To make a profit from these customers, Packard’s company needs to service the products it sells. “We’re heavily focused on the service side,” Packard said. “The Culligan name has a strong reputation for service. That’s what we live off. Any industrial or commercial process that needs water of a certain quality, we can supply the filtration services that will get you that quality.”

Packard said he wants to grow his company organically within its markets by 3% to 6% annually. To reach that goal, a knowledgeable and reliable salesforce in each of its three market sectors—commercial, industrial, and residential—is Culligan’s biggest priority. “We’re always looking to get better salespeople or get more salespeople to penetrate those markets,” Packard said. “The challenge on the selling side is always to get higher quality salespeople.”

Action selling
Packard’s company had revenues of approximately $50 million last year, and it experienced growth in each of its market sectors. Commercial and industrial sales grew by 17% in equipment sales, with a 9% growth in service sales. Although bottled water and residential sales also grew, by about 2% to 3%, the margin is lower in those areas.

The company provides incentives in its compensation, with half of sales personnel’s salaries coming from commissions. Training is key to developing the salesforce. The franchise company provides product training, but Packard’s salesforce must get sales training inhouse. “We use Action Selling to do our training on the sales presentation from a non-product standpoint,” Packard said. “We’ve been on that program for three or four years. That’s been very good for us.”

Packard said his main focus as CEO is finding and recruiting the key managers and salespeople who will help the company continue to grow. As each of the company’s territories is an independent market, each one must have top-quality people to generate growth. “When you’re running these 20 separate companies, you have to have great people,” Packard said. “We’re so customer-focused that we just attract more business with better people.”

Hiring productive people, whether they’re salespeople or service people, and nurturing the service part of the business is what Packard said will keep his company growing and successful. “It’s not things like computer systems that really pay off, it’s the people,” he said.

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