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In 1999 and 2000, Agency Sales Magazine published a four-part series of articles on the growth of Buckeye Fabricating Company, a steel fabricator in Springboro, Ohio. The articles described a rep recruitment program by Dick Macaulay, president and owner of Buckeye, and the results over the ensuing year and a half. The articles described the growth plan, its implementation, its successes and remaining risks. This article describes a reversal of fortune of Buckeye's rep program and steps to redirect the program to solid profitability.
Background
Buckeye was founded in 1963. By the mid-1990s, sales were still under $3 million annually. The firm focused primarily on local customers and developed both a specific product and market niche that allowed it to stay profitable at a rather small size. The product focus was primarily on small pressure vessels. The market was primarily OEM related, although some vessels were sold to end-users and engineering contractors in the chemical process markets. In many respects, they are similar to many local steel fabricators that exist in all centers of manufacturing industry within the United States.
To minimize price competition, they developed strong relationships over the years with relatively few customers that developed loyalty to Buckeye. They also did not stray significantly from their core strengths of repetitively building pressure vessels for a select customer list.
In early 1997, Macaulay retained our consulting services to help plan and implement a growth program. His desire was to further expand Buckeye's niche and develop into a major player within this larger niche. The decision was therefore made to expand further into the end-user and engineering contractor markets, as they offered a greater potential than purely OEM targets.
At the time, Buckeye had only one representative that was a good performer, namely, David Industrial in the Cleveland area. Two other reps were non-performers and were terminated. In the early analytical phase, reasons for the rep failures were defined and a model of the ideal rep for Buckeye's growth objectives was developed. Based on the market mix objective, the ideal rep would be strongly oriented to wet process applications for the end-user and engineering contractor markets while also serving OEMs. David Industrial matched this key characteristic.
The first new rep, Pumps and Process Equipment...