CEO's Blog

When your organization is asked to respond to an RFP, the prospective client likely already believes you have the capabilities they need. But don’t blow this opportunity by assuming the sale and submitting a shoddy response.

At Encompass, we are fortunate to have had the opportunity to participate in countless RFPs over the years.  I’ve seen virtually every format imaginable – from one to two basic pages in a Word document to sophisticated, automated tools.  In the end, we win some and lose some, but always view RFPs as a valuable learning opportunity.

A thoughtful, carefully crafted RFP response fully showcasing your organization’s capabilities and strengths can set you apart from the competition. If you’ve
made the short list to receive an RFP, here are five key strategies to creating a highly-effective response:

The RFP process can be cumbersome and time consuming, but can yield lucrative benefits. Even if your organization is not selected this time, you could leave a favorable impression for future bids and be first on the list for the next one. Also, keep in mind you could have a more immediate opportunity if the client’s project begins to falter.

Plus, people reviewing your RFP for one company may land at another where there is better opportunity.  Developing a high-quality, well thought out response is critical to your chances of winning – if not now, then maybe down the road.

At Encompass, we have a number of exciting initiatives implemented or planned in 2014 to enhance service and add value to your organization:

• Expanding and upgrading warehouse operations at our Lawrenceville distribution center, improving overall efficiency by contracting with a facilities management firm to evaluate our
  warehouse workflows and implement additional processes to ensure we are consistently operating with maximum effectiveness.
• Recently added a night shift to ensure all receipts are concluded same day for increased volume and to maintain our service level commitments.
• Incorporated bar code receiving and advanced shipping notifications to help improve stock receipt accuracy and efficiency.
• Augmented inventory levels across the board to improve our same day fill and to meet customer demand.
• Negotiated new aggressive shipping rates with our national carriers to lower customer freight costs and improve delivery times.
• Successfully expanded into the Major Appliance parts market with new additions such as Electrolux, Dacor and De’Longhi to complement our LG and Samsung lines, providing more “one-stop”
  sourcing.
• Enhancing our mobile applications to enable partial part number searches and improve BOM lookup, providing more valuable tools in the field.
• Extending hours of operation (8 a.m.-8 p.m. and weekend hours), improving delivery and personal customer assistance.
• Improving the quality of packing to provide a more consistent and safe parts delivery experience.
• Installing a new phone monitoring system to enhance the call center experience, as well as adding new personnel and developing advanced customer service training programs and performance
  metrics for frontline representatives.

Change is never easy, but it is the only way to keep the ball rolling successfully.  Just because it’s been done one way for 50 years doesn’t mean it’s the right way today.  Continue to be innovative with your change
and avoid complacency.

Approaching a new year is always a great opportunity for both reflection and making a fresh start. Every year I make a list of things I would like to improve in myself. I then use this list as a reference to gauge my success as a person and reflect upon it over the new year. This year I have asked my leadership team to do the same so that we can all share our personal goals to improve our lives and become happier and more successful people/leaders/parents.

I encouraged the team to focus on personal goals rather than business; by identifying our own shortcomings and/or areas that we can improve upon, we can work toward making changes that can have a positive impact on others.  I truly believe that success is directly connected to surrounding yourself with good people. Some examples of personal goals include:

Consider holding a goal sharing exercise with your own teams. It could help build camaraderie, while providing a forum to exchange ideas on making meaningful, life-impacting improvements.

Best wishes for much happiness and success in 2014!

Last week, several colleagues and I attended the annual National Professional Service Convention of the National Electronic Service Dealers Association (NESDA). This was my 15th NESDA convention, and I have seen the event change dramatically over the past few years.  It’s no secret that the consumer electronics repair industry has slowed considerably from the heyday of component level repair and less reliable technology.  Just a few years ago, the NESDA annual convention was double the size it is today.

However, one thing that remains a constant is the indomitable spirit and resilience of the membership. Instead of bemoaning the decline, many members are diversifying into other product categories and verticals, such as  appliances, to shore up their businesses.

They are also seeking to innovate outside their traditional comfort zones. During a session for sharing best practices, one participant urged others to leverage social media to boost their businesses by asking customers to post positive comments online.  Another idea was to optimize business websites and boost traffic by incorporating relevant keywords. The participant pointed out that members can easily do this on their own like she did and cut their advertising budget in half.

To continue surviving in the CE industry, we must all seek creative ways to remain relevant and offer services that customers want at an affordable price. The most forward-thinking businesses will figure out how to be hyper-efficient and drive costs out of their operations so they can gain share in a still highly-competitive market. Technology and market conditions will keep evolving, and we have to evolve our businesses along with it or risk getting left behind.

Parts distributors for multiple manufacturer brands are especially challenged to stock enough inventory to meet current demand, while trying to predict when that demand is likely to plummet and create E&O. It’s a fine balance between stocking just enough to get the sale, but not enough to end up on a scrap list. With new technology and product models constantly evolving, this is no easy feat. Other contributing factors to E&O are:

·    Normal failure rates falling short of historical demand

·    Customer returns/cancellations

·    Changes in the repair process

·    Decrease in product costs making repairs not feasible

·    Increased part costs

·   Gray market, generic or reclaimed parts in the marketplace and not adjusting OEM price to compete

Understanding the underlying reasons for having excess or obsolete stock in inventory is key to reducing your future exposure. Demand today increases and decreases based on vertical. The appliance market is seasonal, while the printer market is more consistent. However, in all cases, demand should decline consistently across verticals depending on the warranty coverage period and longevity of the product’s lifecycle.

To help minimize E&O inventory from accumulating in the first place, work closely with your suppliers to meet their return policies. Consider assigning someone to take ownership of parts returns whether they be cores, new/unused or new defective parts. In some cases, the value of the part could mean the difference in making a profit on a job or actually losing money for failure to return a part.

If returns aren’t possible, offer the goods for sale at a steeply reduced price.  Seek out online marketplaces to advertise E&O inventory to a wide audience. Salvagers are another channel to move dead stock through. Keep in mind, one person’s trash can be another one’s treasure.

Based on their answer, customers are categorized as “detractors” or people likely to harm the company’s reputation and defect to a competitor; “passives” who are generally positive about the company; and “promoters” who are extremely satisfied and can drive the company’s growth. A company’s Net Promoter score is calculated by subtracting the number of detractors from the number of promoters.

Depending on whom you ask, NPS is either the single best metric of customer loyalty and business growth potential or way too simplistic to be more meaningful than any other similar measurement. Regardless of its actual predictive capabilities, the overarching concept behind NPS remains sound – measuring how well a company is serving its customers and earning loyalty.

In the past, distributors were measured strictly on pricing and availability of their offerings. Now we are much more involved in the customer experience throughout the supply chain. For example, servicer networks of extended warranty companies are measured on how well they support consumer end users. As a parts distributor to these networks, Encompass is directly responsible for ensuring their success (and ultimately the companies or clients they work for) by getting them the components they need to quickly respond and make a field repair.

With customers at a premium, retention is a key factor for success. If you are unable to maintain customer loyalty, especially in a declining economy, you’re in big trouble.  At Encompass, we don’t compete on price – we compete on value. We are singularly focused on improving our value to customers through a variety of means, from making technology enhancements that streamline
parts ordering and account management to continually adding new manufacturer brands in multiple product categories. We consider ourselves an extension of our business partners. We want them to be successful, and we do what we can to provide support throughout the supply chain to make it happen.  This holds true for the manufacturers we represent all the way to the dealer who is buying the parts.  We like to call it “building brand equity.”

Encompass recently distributed our 2013 Customer Satisfaction Survey and urge you to participate. Your feedback is critical to us because we can’t make changes if we’re not aware of the issues.
Input we’ve gathered from previous surveys has led us to enhance our website, change packaging procedures, extend our call center hours and more.

If your business is not already surveying your customers by some means, now is the time. Keeping tabs on the customer experience is vital to the ongoing health of your business and should help give you insight into the answer to the ultimate question as it relates to your organization.

Encompass has on hand hundreds of defective circuit boards for multiple product categories that we are able to repair and return to the supply chain. Through a collaborative project, the Parts and Service teams work together to identify the boards that are in highest demand by our customers and prioritize them for repair to get them back in circulation as quickly as possible. Our technicians are highly skilled with extensive experience to ensure a top quality product. Techs are also able to test returns to minimize the volume of defective parts returned to manufacturers.

With manufacturer returns privileges getting stricter by the day (a topic for a future blog!), Encompass is seizing on an opportunity to extend the lifecycle of a critical service part and fulfill the needs of our customers, while helping to reduce OEM warranty exposure.