Connecting to Customers

Dec. 1, 2003
Jeff Siegfried doesn't just rely on customers to buy wire and cable. He counts on them to provide Omni Cable with the best marketing ideas, too.A drawbridge

Jeff Siegfried doesn't just rely on customers to buy wire and cable. He counts on them to provide Omni Cable with the best marketing ideas, too.

A drawbridge spanning a tributary of the Chesapeake Bay is stuck. When boats come through, workers have to crank the bridge up and down by hand. An electrical contractor is called in to fix the problem with the electrical system, but to get the bridge operating again the contractor needs a one-of-a-kind composite cable. He puts out a call to his local distributor.

Omni Cable Corp., Westchester, Pa., thrives on solving problems like this for electrical distributors, says Barry Siegfried, the company's chairman and co-founder. Omni Cable located the cable to fix the bridge - a steel-reinforced hybrid cable that had power, control, datacom and fiber-optic cabling underneath its waterproof skin and could withstand total immersion in a saltwater tidal area. "We found the only guy in the world who would manufacture 320 feet of that (cable)," says Ron Slepin, executive vice president and the company's co-founder. "We do miracles everyday."

Because the wire and cable that the 23-year-old, 95-employee company usually sells isn't much different than its competitor's products, Barry Siegfried says Omni Cable must differentiate itself with knowledge and service.

"I think that separates us from any competition we have," he says. "It's our willingness to search the world for a solution to a particular problem that a distributor or his customer may have...We want to make our customers the heroes. If we can do that, it's not a matter of money or price. It's just a matter of where can we go to get the job done."

"So much of what we do is simply not available from any other source, in terms of quality, time or construction," adds Slepin.

Siegfried and his son, Jeff Siegfried, the company's president, say you can't really teach someone how to identify the right customized cable for a job like the Chesapeake Bay drawbridge. Some basic knowledge of cable construction can help. But in the world of low-voltage and specialty wire and cable, cable make-ups change so fast that it's more productive for Omni Cable's salespeople to spot sales opportunities by listening to distributors and their customers and asking them lots of questions about their installations.

This "look and listen" sales philosophy goes much further than just sizing up potential sales opportunities for wire and cable - it's ingrained in the company's DNA. For instance, like many companies, Omni Cable's sales force is compensated on the profitability of the orders they bring in. But part of their compensation is tied to their ability to meet goals with individual distributor accounts. Because the company is privately held, Jeff Siegfried says he doesn't have to run the business to meet quarterly earnings forecasts. This allows him to focus on the big picture, which for Omni is growing the business, one distributor at a time.

To do this, branch managers at the company's locations in West Chester, Pa.; Houston; Lawrenceville, Ga.; Randolph, Mass.; St. Louis; and San Francisco evaluate salespeople on their plans to grow key distributor accounts. If the salespeople and managers at the individual locations develop realistic growth plans for customers, profitability will follow, says Jeff Siegfried.

"We dance to a different beat," he says. "We are not revenue-motivated. We are customer-motivated."

The steps in this strategy can be traced to the history of wire and cable specialists in the electrical wholesaling industry. Like any wire distributor, Jeff Siegfried must occasionally endure the taunts of those people who mistakenly assume his company is a nonstocking wire broker that sells around distributors whenever necessary. To combat this misperception, Omni Cable's sales force constantly emphasizes the value-added services the company offers.

The Siegfrieds and Slepin have spent years positioning Omni Cable as a dependable source of wire and cable for electrical distributors that adheres to a strict distributor-only sales policy.

Listening and learning To differentiate Omni Cable from the pack, Jeff Siegfried says the company continually asks its customers for ideas on how Omni can help them run their businesses more profitably. The assistance Omni Cable offers isn't always directly related to wire and cable. It often relates to some of the company's core competencies, such as warehousing, wire handling, inventory management and marketing.

For instance, a warehouse worker from Tristate Electrical and Electronics Supply Co. Inc., Hagerstown, Md., recently spent more than a week working in the warehouse of Omni Cable's headquarters where he was trained in the most efficient methods of warehousing and handling wire and cable.

Other electrical distributors have come to Omni Cable for advice on wire management. For instance, CLS, Hartford, Conn., cut the amount of wire and cable "shorts" in its warehouse by 75% after working with Omni to improve wire management strategies. (See "Wired together," EW - October, 1999, p. 34).

"It's not just that we have the cable in stock and get it to the customer when he needs it," says Jeff Siegfried. "Just-in-time is what you pay to get in the game these days. To differentiate yourself, you have to do something more. We are always looking for ways to be unique."

Catalog customization Omni Cable uses its custom catalog publishing capabilities to draw the differences between itself and its competitors. The company has segmented its product offering into several specific areas, and it works with electrical distributors to provide a catalog that has a "core" of Omni Cable products in one of these targeted markets, and a "wrap" of cable-related products that the distributor carries.

"We separated the catalogs by market focus," says Pete Comber, Omni Cable's director of marketing. "A lot of people create catalogs with a one-for-everyone approach. We have industrial, commercial/residential and medium-voltage catalogs. We take a product group or a manufacturer that they are strongly aligned with and wrap their material around our cable piece. Their piece is an adjunct to the cable. They belong together. If they sell cable, they need to sell these things."

For instance, a distributor who wants to focus on industrial cable may include connectors, lugs and compression tools in the "wrap" segment of the catalog.

"We offer distributors as many pages as they would like to add," says Comber. "We pay for half, they pay for half. They usually get participation from their vendors."

Electrical distributors can imprint the catalogs with just their logo, or with both company logos, depending on how they want to present their wire and cable capabilities in the market.

The catalog program has been underway for just over a year. Jeff Siegfried says its medium-voltage cable catalog is working particularly well in reintroducing electrical distributors to medium-voltage cable. "It's hard to handle and hard to get," says Siegfried. "In the good old days, all distributors stocked it. They don't anymore. It's purchased 300 foot here and 100 foot there. With customers, it's, `I need it tomorrow because the transformer is down.'"

Because distributors have so many questions about medium-voltage cable, Omni includes some basic information on the cable in the catalog along with the product descriptions. "We found with this cable that there are huge problems handling it correctly, so we put in some information on how to handle it," says Jeff Siegfried. "In the back of the catalog, we also have a whole line of connectors and kits. We had some distributors tell us, `We sell the cable, but we never get the terminations. Others would tell us, `We sell the terminations, but we don't sell the cable.' We put them together."

The catalogs are only offered in a print version because customers have not yet requested PDF versions or Web-accessible electronic formats. When customers request those formats, Omni Cable is ready to move in that direction.

Jeff Siegfried says using the traditional paper format also gives Omni Cable and distributors productive reasons to make joint sales calls to key distributor accounts because they can quickly teach customers how to use the catalog and reinforce the wire-related "add-on" products it promotes.

He sees Omni Cable's marketing efforts as one of the company's core competencies, and says Pete Comber strives to tailor the company's marketing around customer needs.

"Pete's job is to listen to customers and create marketing that our customers want and will be supportive of their needs...It starts from the distributors' needs. Then we wrap ourselves around them."

Looking outside for advice Omni Cable's executive team doesn't pretend to have all the answers on the most effective marketing campaigns, and it also isn't afraid to look outside the company for advice on long-term management strategies. For the past six years, the company has used a board of advisors for input on strategic initiatives. The board members have business expertise in specific areas where Omni Cable wants to grow. Sitting on the board are Ed McGrath, formerly president of Graybar Electric Co., St. Louis; Jeff Kiesel, president of GE's Small Business Solutions business unit; Jim Collins, who ran the Red Devil Co. in the hardware industry; and Randy Bliss, YHB Consulting, West Hartford, Conn. The group meets four times each year.

"We bring them our problems and questions," says Jeff Siegfried. "We allow the board members to tear them all apart...We want to get outside thoughts inside."

One of the board's suggestions was for Jeff Siegfried to broaden his business experience by exploring how other businesses operate outside the wire and cable industry. To do this, he is serving on the advisory board for a manufacturer of insulation compounds.

Engineering an ESOP As the company's executive team looked into the future, they saw the need to attract and keep good employees as one of their biggest challenges. They saw an Employee Stock Ownership Program (ESOP) as a tool to accomplish this and have had an ESOP since 1997. With the ESOP came some unexpected benefits - and surprises.

"The ESOP allowed us to do a lot of things," says Jeff Siegfried. "It allowed a couple of our senior people to diversify. It engages our people beyond just talk into the culture of our business. They are active and interested...It has been a great motivator." The ESOP has also helped create a work environment where people are happier and has cut down on employee turnover.

Jeff Siegfried says the ESOP program and the company's advisory board support the company's overall philosophy of gathering input from customers, employees, vendors and other respected sources and then factoring it into the company's direction for the future. He says this strategy helps the company "think outside the box" to define the specific package of services it will offer in the market.

Headquarters: West Chester, Pa.

Founded: 1977

Company sales: Approximately $60 million

Employees: 95

Six locations: West Chester, Pa.; Houston; Lawrenceville, Ga.; Randolph, Mass.; San Francisco; and St. Louis.

Inventory: $12 million in six facilities with a total of 200,000 square feet of warehouse space.

Key markets: Residential, commercial, industrial, OEM, electronic and data markets.

Value-added services: Striping, twisting, lashing, dyeing and printing for all types of wire and cable.