Repeat business

How many times have you seen the sign at the exit of a business that says, “We appreciate your business,” while your experience was anything but satisfying? You might have thought the message on the sign was hollow and insincere.

Every day the personnel who work in retail scrap collection facilities have hundreds of interactions with people who supply scrap metals. These peddlers, as they may be known, are truly a critical part of the flow of scrap metals that feed the recycling industry and the industries that it supplies. These peddlers often are the lifeblood of the industry, serving as the first link in the supply chain. Do we “appreciate” their business, as the sign says, in a manner that is hollow and insincere, or are these peddlers truly recognized for the value they provide? Even during difficult weather, bad markets, ever-changing regulatory policies and intense competition, the retail scrap supplier is ever present in our industry.

Now, more than ever, with the margin and volume compression currently being experienced in the scrap metal recycling industry, is the time for peddlers to transition to valued retail customers in our recycling facilities and in our industry.

ENHANCING THE CUSTOMER EXPERIENCE

The key to growing a scrap processing company’s retail trade is repeat business; each person brings additional materials and volumes to your business.

It may take months for a company to build a successful group of retail customers; however, only one bad experience can cause a once loyal retail scrap supplier to seek alternatives to your company.

Attracting and retaining these retail customers starts with presenting a welcoming, easy-to-identify entrance. Does your front gate function more as a “Warning: Keep Out” sign? All of the local and state laws an operation posts regarding material receiving restrictions can appear daunting to the first-time or infrequent visitor and certainly does not start the customer experience off on the right foot.

Why not instead create a “We’re glad you are here!” or “Public welcome!” environment with signs that identify the direction customers should head to be served.

Customer service is the critical key to transitioning a peddler to a customer. Many successful retail buying operations have installed a customer service representative or “greeter” at the front gate to assist visitors with the details necessary for a successful experience. Most first-time or infrequent visitors can be confused about the process. Confusion almost always leads to mistakes, then to frustration or anger, and a repeat visit from that person is unlikely. Worse yet, a bad reference in the local marketplace could be the outcome. All this may be avoided with the proper interaction at the front gate by the greeter or, better yet, with management and other key personnel.

Raleigh Metal Recycling, Raleigh, North Carolina, offers a good example. Owner Greg Brown can be seen throughout the day in the retail area, wearing a hard hat and safety glasses, greeting customers and handing out business cards.

Another effective way to support a positive customer experience is to keep retail customers away from the hustle and bustle of a facility’s scrap processing and handling operations. Although interesting to watch, it can be intimidating to be caught in the middle of large equipment that is moving about in all directions, not to mention the obvious safety risks associated with such congestion. Establishing one-way traffic in the yard, with the entrance separate from the exit, is an effective way to accomplish this objective.

Retail customers also should be protected from bad weather. You cannot count on a sunny day with 70 degree temperatures to greet you each day; but, you can count on the worst Mother Nature has to offer from time to time. This is when your business can shine by providing an in-plant design for the worst climate conditions your customers may face. Whether you are in Houston or Upstate New York, the worst weather conditions always will hamper retail traffic. Providing hard surfacing for roadways, customer unloading and parking is a necessary first step in assuring a great experience for retail customers. Providing inside or covered areas for customer unloading ensures the customer visits are unhampered by weather. Even on the worst weather day, your customers will know that when they come to your facility, they and their vehicles will remain clean and dry as they visit.

The last opportunity you have to assure a return visit is during the cash-out process. Regardless of the method of payment—cash, check, ATM or any combination—the opportunity to make the customer experience memorable rests at this final step. Providing a climate-controlled, well-lit, spacious lobby with complimentary coffee and water, vending machines and a local television broadcast with news and weather are important extra touches to assure a great experience for the first-time as well as the repeat customer.

In Greenville, South Carolina, for example, Kamal Desor, senior partner and owner of Adams Scrap Recycling, has gone the extra step of providing an on-site cantina with made-to-order meals and snacks for customers and employees.

TRAINING YOUR EMPLOYEES

Transitioning peddlers to retail scrap customers also involves a paradigm shift to valuing each and every customer of your organization. The term peddler arose from a cultural dynamic within the industry and has been passed down from generation to generation. Although the original intent may not have been negative, the inference is that a peddler is something less than a valued retail customer. Today, however, retail customers may be more important than ever with the need for margin expansion and volume at every level of a scrap operation. If getting away from the word peddler has been tough, now may be the perfect opportunity to focus on doing so as part of your strategy to improve your company’s retail growth.

As with all cultural policy, practice starts at the top. The company’s leadership must place a priority on the high value of retail scrap customers in word and in deed. Providing leadership and direction will be necessary to ensure a successful transition. Along with the obvious capital support for facility improvements, giving attention to training the staff who will interact with customers is a critical factor.

Have you ever heard someone described as a “people person”? This may or may not be true of an individual, but what is a fact is that if you have improperly trained or poorly prepared personnel interacting with your customers in the area of customer service, your operation will not be as successful and effective as you expect it be in the area of retail scrap purchasing. Training is always a difficult topic because we make excuses for why we don’t do it. “It costs too much”; “We don’t have the time”; or “Since we did the last training, a few of those employees have left, and I don’t want to keep training people who leave” are all arguments that have been made against training.

“By showing your customers the value you place on them with improved services, facilities and a generally improved experience, you will find that you can count on their repeat business.”

I challenge such arguments with the following: How much does it cost when you lose a customer because of a bad experience? How many potential customers have you lost because one customer had a bad experience and shared it with the people he knew?

Consider your own experiences with bad customer service at a restaurant or dry cleaner or from a cellphone service provider. Have you gleefully returned to those businesses or have you sought alternatives?

Each employee who interacts with customers should be trained in customer service two to three times per year. Seminars, DVDs and published materials are all great resources for training.

ADDING VALUE BY PROVIDING VALUE

“You get out of something what you put into it” is an appropriate axiom for transitioning to a customer-focused retail scrap buying philosophy. By showing your customers the value you place on them with improved services, facilities and a generally improved experience, you will find that you can count on their repeat business and, ultimately, their loyalty.

Opportunities to educate your customers in a manner that supports your business objectives are always before you. When customers are waiting in line, either for unloading services or at the cashier, don’t miss the chance to educate. Signs, display boards or, better yet, television screens placed within view can accomplish multiple things. First, they provide an opportunity to educate or to direct customers to properly segregate items with the intent of requiring less effort (cost) on your part while providing more value (price) to the customer. Second, you may direct the customer to the operation’s need for additional recyclables, such as cardboard or e-scrap. You can grow your business by having each customer bring in more items for recycling. Third, such displays can distract from the frustration of waiting in line and give you an additional opportunity to ensure a repeat visit.

THE FUTURE AT THE FRONT GATE

The future of your retail scrap purchasing business starts at the front gate of your operation. To compete with all the factors affecting a retail scrap buying company today, effective buyers must not allow distractions to overwhelm them from focusing on the objective to restore margin and increase volume in the scrap metals business. This objective requires diligent effort to provide scrap buying discipline while keeping an eye on global market conditions, regulatory restrictions, local competitive buying practices and strategies and consumer consolidations. Ensuring success requires recognizing individuals who always have been at the beginning of the scrap metals stream—those customers once referred to as peddlers—for their critical role. These customers who source the substantial supply of obsolete scrap metals deserve our best; let’s show them how much we truly appreciate their business.

Bob Brewer is a 25-year scrap metal industry veteran who heads Sustainable Management Resources (SMR), Greenville, South Carolina. Prior to founding SMR, he was CEO of PSC Metals and executive vice president of OmniSource Corp. He can be contacted at bbrewersmr@gmail.com.