The 2020 Mid-Year Economic Update_long

Behind Gustave A. Larson’s Timely Pre-Pandemic Pivot

Over the last two years, Milwaukee-based HVACR distributor Gustave A. Larson Co. has transitioned from outside to inside sales, a move that became reality at the start of 2020. That sales model transformation has paid dividends during the coronavirus crisis, and now the company enters the post-pandemic well-positioned for the summer surge.

Like many companies, Milwaukee-based HVACR distributor Gustave A. Larson Co. hasn’t escaped the COVID-19 pandemic unscathed. Sales at the 84-year-old, family-owned business dipped 20% in recent months as customers halted their HVAC and refrigeration orders, with March and April especially bad due to shelter-in-place guidelines forcing companies to the sidelines.

But brighter days are on the horizon for the longtime distributor, whose business typically spikes at the end of May thanks to the start of summer and the increased need for new HVAC systems and equipment repairs. After Memorial Day each year, the company sees a “hockey stick” effect on sales, according to Andrew Larson, the Boulder, Colorado-based chairman and CEO of Gustave A. Larson.

“Our season really kicks in during June, July, August, September,” Larson said during the latest installment of MDM Live. “We’re looking forward to a hot summer.”

Warming weather isn’t the only green shoot the company is watching with a hopeful eye. Now that the U.S. economy is slowly reopening — specifically as restaurants and bars are again able to welcome customers — Larson remains hopeful for a post-pandemic bump in the coming months.

Perfect Timing for a New Sales Approach

However, it was a timely pre-pandemic shift that had the company well-positioned during the crisis and now coming out of it. As Larson outlined, Gustave A. Larson’s recently revamped sales model bolstered the company during the months-long shutdown.

The company, which has 52 locations from the Midwest to the Mountain West, spent the last two years implementing a new “inside-out” team-selling model dubbed “Team GUS” — a nod to Larson’s grandfather and company founder as well as an acronym for “giving unbelievable service.”

Pivoting to this new approach right before the economy tanked proved advantageous for the company and its 430 employees. With inside sales personnel already focused on calling customers or checking in over video conferencing rather than conducting in-person visits, Gustave A. Larson maintained some semblance of its normal sales cycle, albeit with a heightened focus on service.

“It could not have been better timing for us to have our outside folks now inside,” Larson said. “We’ve had our team members on the inside reaching out to customers not to sell, but just to reach out and say, ‘How are you doing? How can we help you during this time?’ That has helped us tremendously. It’s benefited our business and will in the future as we go forward.”

As part of its service offering, the company held HVAC contractor forums and focused on helping customers remain profitable during the downturn. “We want to help them be successful,” Larson said. “That’s what creates loyalty. That’s what allows us to grow — and to grow with our customers.”

An Upbeat Outlook

Larson said the company is “anxious to get back to work,” and it has begun a phasing-in period leading to the official return date of June 15. With that new sales model firmly in place, customers reopening their businesses and the worst of the pandemic now in the rear-view, the outlook is upbeat for Gustave A. Larson.

That’s not all. The company is benefiting from a paycheck protection program (PPP) loan. Part of the loan’s forgiveness clause calls for Gustave A. Larson to add to its payroll, so the company is in expansion mode right now — a far cry from when it was looking at reducing its headcount by 20% just a short while ago.

“Our [employment] numbers are down — from natural attrition, from early retirement, from a few ‘wrong person, wrong seat’ situations,” Larson said. “But now we want to get those numbers up to maximize the forgiveness, which will pay for those employees, so we’re in a hiring spree right now. We’re looking at hiring 20 to 30 people as soon as we can — also because we’re gearing up for our summer busy season, as well.”

The lesson in all this? Yes, the best time for a distributor to have transformed its sales model was before the coronavirus pandemic crippled the economy and changed the way sales calls are conducted. But the second-best time is now.

To learn more about shifting your sales model, sign up now for MDM’s Sales GPS 2020 Summit, to be held both virtually and in-person from Aug. 31 to Sept. 2.

And join us on Friday, May 29, at 2 p.m. EDT for this week’s MDM Live, featuring the steps that distributors can take to build a sales team for the “new normal.”

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