Tuesday, October 17, 2017 | Today's Vending Industry News
How Independent Refreshment Service Operators Can Compete In Bottled And Filtered Water Market

by Len Rashkin
Posted On: 9/14/2017

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In the June issue, I covered the first part of water cooler service, including both point-of-use filtration and bottled spring and filtered water. I discussed the benefits of each type of service and how to position your presentation on the basis of the kind of service -- if any -- your prospect is using now.

In this article, I will offer some strategic sales suggestions for selling against a competitor, especially those regional and national bottled water companies. Let's start by supposing you wish to offer bottled water along with coffee service.

As an independent refreshment service company you have a few advantages over the larger water service companies, which are usually inflexible with regard to delivery schedules. The largest national and regional water services companies do not specialize in "coffee service" as you do. Their choice of brewing equipment types and products can't match the vast number of SKUs that an OCS specialist can offer a business.

That said, the points to emphasize include your ability to deliver on the next day, or the second day, after an order is placed.

You're also able to deliver an agreed-upon number of bottles with your coffee and allied products order on each delivery cycle. If the client has limited storage space, you can deliver only a few bottles of water when you deliver their coffee and allied products. This allows you to point out that fewer bottles mean less deposit to be paid, as well as less storage space needed. And fewer bottles delivered improves the client's cash flow.

Another appealing capability is next-day rush delivery. (That usually works better if you're likely to have several delivery vehicles covering the area, or going past or near the customer's address.)

Point out that you exchange coolers, depending on the number of bottles purchased throughout a year or two years. Explain that there always is a mineral buildup in the metal water tanks, and this can affect the taste of the water over time. Larger users require more frequent maintenance.

The pricing of your water bottles can be adjusted, depending on the number of bottles delivered at one time. This means you can adjust up or down. National companies are not going to deliver just a few bottles, if they are not delivering other products at the same time.

The big water companies are branded, and spend millions of dollars to get their names in front of the public and to publicize the high quality and the "delicious taste" of their waters. Their pricing is usually higher to cover these added costs, but this does not mean that your water is inferior or less flavorful than a national brand. You can counter the larger water service companies with techniques that include:

» Doing a blind "taste test" with the decision-maker and employees.

» Showing the prospect information on the source of your water --  where your bottles are filled -- and talking about the local, state and federal regulations that water bottlers must adhere to, just as the regional and national companies do.

» Asking for a current invoice of the other service to show prospects what you can save them in yearly costs.

» Quoting a price per bottle based on what other products or services you will be providing.

On the other hand, you may plan to expand into point-of-use filtered-water service. If you do, you'll encounter prospects who presently are using bottled water.

I have always loved to say to a prospect who has a bottled water service: "If I can show you a way of paying for all or most of your coffee service costs, would you give me that opportunity?"

Explain to the buyer that you are not trying to compete with the cost of bottles of water that they currently have, but rather, you want to explain all of the benefits of having a filtration water cooler service. Now ask for a copy of their invoice to see their cost for a bottle of water. Here is where you project their average usage against the cost of a filtration service for one year and three years.

The benefits of point-of-use filtration over bottles include:

» POU treatment reduces the cost from dollars per gallon to pennies per gallon.

» It eliminates the need to store bottles, making valuable floor space available.

» There is no outlay for bottle deposits.

» It saves money on sales tax per bottle.

» It eliminates the risk of delivery interruptions. The customer never runs out of water, and therefore never has to call for more water.

» It eliminates spills and floor damage.

» It eliminates heavy lifting and the potential of incurring an injury while handling 40-lb. bottles, which can lead to lawsuits and absenteeism.

» It reduces invoices.

Having explained the benefits, it is now your job to project the (1) annual cost of renting the filtration system; (2) cost of the filters used, which are typically replaced every six months; and (3) any applicable sales taxes

Now multiply the number of bottles used yearly, and the annual cost of your competitor's rental, plus any taxes. Once you have those numbers, project them out to one year and for three years.

For example, let's say the cost of your competitor's bottles and cooler rental adds up to $2,000 a year and your filtration cooler program adds up to $600 per year. You now show the buyer that the $1,400 annual savings can be subtracted from the cost of the coffee service and, over three years, the savings is $4,200. Now ask, "Can you see how this is a significant saving for your company?" and review all of the other benefits of POU filtration.

Once the prospect says "yes," you then ask whether you can install the filtration cooler free for one month to allow the location's personnel to enjoy the benefits, without having to make a commitment today.

Whether you get a "yes" or a "no," ask if you can now quote costs on your own company's coffee service. Simply, the prospect thinks, "I was just shown a major savings. Why not look at their cost of coffee service, too?"

If you have any questions about these sales strategies or any topics you'd like me to cover, please contact me at (516) 241-4883 or OCSconsultant@aol.com.


» LEN RASHKIN is a pioneer in office coffee service. He founded Coffee Sip in 1968 and later merged it with Dell Coffee, of which he became president in 1991. Sales at Dell topped $7 million. He also founded the Eastern Coffee Service Association and National Beverage & Products Association. He is a speaker at national and local trade conferences, consults on OCS sales and marketing, and is the author of two OCS training programs.