In what way has the company changed since 2003?
John Dundon & Phillipa Clow: The major change has been in business culture. The most challenging aspect of putting companies together isn’t operational or system challenges, it’s trying to create a common culture and style of business.
Over the years, the combined business has become far more customer-focused, with staff and managers at all levels developing a much greater understanding and taking responsibility for outstanding customer service and satisfaction. This culture has helped Angel achieve faster organic growth than its competitors. When we introduce new concepts to the workforce, particularly the mains-fed opportunity, they’re much more receptive to new offerings that will best meet customer needs as opposed to what the business had offered historically.
How do you view Angel Springs within the UK water cooler market?
JD/PC: We believe we’ve remained clearly focused on customer service – while we are in the water business, we are really in the service industry. We would like to think we offer the best ‘value for money’ in the UK water cooler market. We’re not (and never will be) the cheapest. In fact, we pride ourselves on explaining to existing and potential customers that Angel ‘doesn’t do cheap’.
However, to deliver great customer service and retain talented and experienced staff, we know we have to invest in people and resources. We’ve also fully embraced the concept of dual supply, and believe we were the first to introduce the phrase, ‘one market, two solutions’.
Contrary to the beliefs of many traditional bottled water cooler companies, we’ve always believed mains-fed has never been a threat but a fantastic opportunity.
Where are the real growth areas for your business?
JD/PC: Mains-fed certainly remains the main area for growth. As the three businesses we acquired were traditional bottled water coolers companies, our fixed cost and business infrastructure were paid for by traditional revenues. Therefore, the introduction of a mains-fed portfolio now makes a significant contribution to our bottom line, and we see this area of our business becoming ever more significant.
We began marketing mains-fed from day one. However, it took us around 18 months before we were able to change the mindset of the staff from an ‘us and them’ attitude and realise that mains-fed provided us with our biggest opportunity.
In these difficult times, we have actually increased our investment in telephone sales, and we now have a strong team of field sales managers to make sure our ‘total service’ package is delivered in the most competitive manner possible.
What are your most popular water cooler models?
JD/PC: We major on a small range of machines – some are best suited for the commercial market as they’re robust and provide impressive flow rates, while other machines are specially modified to offer our unique schools package. With both bottled, and in particular mains-fed installations, leak prevention (not detection) are a critical selling feature and this standard will shortly be standard for all BWCA members.
Is there a water cooler yet to be designed that would be popular in the marketplace?
JD/PC: As customers are being more selective, they’re demanding better value for money. Sometimes, a deciding factor may be a cooler that’s either aesthetically appealing or has some functionality over its competitor, so core features are probably more important today than they’ve ever been.
However, I don’t think there’s a new cooler that will take the market by storm. When we take this back to basics, the manufacturers are trying to supply a cooler that’s stylish, functional, reliable, robust and inexpensive – that’s a tall order when you consider the significant research and development costs to bring a new cooler to market.
I believe that a water cooler that provides all the aforementioned features, together with great customer service and competitive pricing, will give customers what they’re ultimately after: the best value for money available.
Is the UK office drinking water market still in a healthy state, and is there potential for more growth?
JD/PC: This isn’t an easy question. We need to separate the performance of the market from the market’s potential. I believe the poor performance of the market is predominantly down to disappointing strategic decisions by some of the major companies, and the inability of some operators to move with the times and fully embrace the concept of the ‘one market, two solutions’ tactic.
The market has potential for growth, but I can’t see anyone who has the size, momentum or desire to push the market forward over the next few years. Although Angel derives the majority of its growth organically, we’re simply not large enough to make a significant difference.
I think the market will continue to provide challenges with overcapacity in the mains-fed-only market, resulting in severe down-pressure on margins. Conversely, I think the ‘smart’ dual operators are best prepared to weather the storm, as they have good margins from their bottled customers and low yet acceptable margins from mains-fed.
However, companies with a bottled base need to become much more tenacious and smart in protecting existing customers from mains-fed predators, and ensure that any need to change to mains-fed remains with the incumbent supplier. On the whole, I think the water cooler market has a difficult couple of years ahead of it.
Is mains-fed becoming more popular to the detriment of the traditional bottled water cooler?
JD/PC: Absolutely. Many bottled customers see three potential benefits by converting to mains-fed: price, convenience and the environment. These may be real or perceived benefits, but this is academic because in the eye of the customer, perception eventually becomes reality, even if it’s not true.
The market will continue to change. I think the market may end up 60% mains-fed and 40% bottled, which is why I believe the smart bottled operators are best placed to take advantage of this swing in the market.
Is it becoming harder to operate in today’s climate?
JD/PC: No, quite the opposite. Companies that are well organised, funded and structured are finding a clear gap opening up between them and the operators who have gone down the price-only route. Customers are looking for the best value for money package available. They’re selective and reluctant to deal with any supplier they fear may not be able to withstand the recession, so a company’s credentials are vital. Customer testimonials are a great way to show potential customers why other companies deal with you, and we’re fortunate to have numerous verified customer testimonials.
Where do you see your main competition?
JD/PC: We find that most traditional bottled water companies are not very competitive. The mains-fed only companies are understandably intent on winning bottled customers and they probably represent the most noticeable water cooler competitor.
However, other cooler companies are not the most feared competition, as that’s easily within our control. Our biggest competitor, the economy, is outside of our sphere of control and will have the biggest impact, positively or otherwise, on our business and market.
What are your main ways of winning new business?
There’s no secret to winning new business. It takes lots of salespeople, both telephone and field based, a driven and focused approach together with skilled and continuous training methods. These days quit (churn) management requires dedicated staff, plus a quick, tenacious and skilled response.
As the new chairman of the association, how do you perceive the future for the industry, particularly in these tough times?
JD/PC: I realise this is repetitive, but our members must manage the migration from bottled to mains-fed much better. If we’re able to do this effectively, we’ll manage the opportunities in this challenging market to our advantage. If companies don’t change, they’ll decline as the downturn in the economy bites and competitors cannibalise their customer base.
What are you most looking forward to in your new role?
JD/PC: Giving members a very clear competitive advantage over non-members and adding value to their membership.
What are the three most important things the association could offer members during this current recession?
JD/PC: The association can give members the tools to help them through this recession. The three most important are:
The BWCA can give its members the tools to go to market with confidence and tenacity. However, it’s up to each company chief executive to decide if they have the energy, drive and desire to take full advantage. For those members who are ready and willing, the future may be tough, but ultimately they will come out of recession stronger and fitter.
Should the industry look to the past to learn survival lessons for the future?
JD/PC: Yes. If we look at the ‘winners and losers’ of the last 20 years, the people who have prospered, who have survived and who are (some of us) still around are those who operated good businesses and were able to keep a sense of perspective. In this industry, big isn’t always great – large, loss-making businesses still fail and those canny entrepreneurs who were able to grow both revenue and profits will always prosper.
Do you have a company mantra?
JD/PC: We do have a company culture focused around people and customers. First and foremost, the customer always comes first. To educate our staff, many have successfully completed service-based NVQs. This helps them feel part of the culture and want to progress their careers with Angel Springs.
We also have our ‘three A’ guiding principles when recruiting staff: attitude, application and ability.
How important are environmental issues to your business and how are you approaching them for the future?
JD/PC: The environment and how companies manage this opportunity is critical, though I believe a combination of customer awareness and education plus economic pressures have changed the environmental agenda.
Customers want to know that they’re dealing with a supplier who is socially responsible. At Angel, we operate a ‘closed loop business’: everything we deliver can be collected by Angel and is recycled. We believe we’re the only company in the market that can make this claim. We also believe that our association members have very good environmental credentials and we’re keen to promote these to the trade.
Do you have a community focus?
JD/PC: Angel supports a large number of community projects, including local air ambulances, numerous schools, charities and local sports clubs and teams. We also have a link with a local hospice charity where we operate a staff giving scheme where staff can donate a small percentage of their salary each month. This donation is then matched by Angel.
What are the major ambitions for Angel Springs?
JD/PC: Angel remains committed to provide the best value for money service in the industry. We accept that the current economic environment has changed the strategy and objectives of all businesses, but we have a very clear set of objectives over the next two years: to continue growing revenue, our cooler base and profitability, and to increase market share and profitability.
We accept our growth may be modest, but if we can achieve these aims, we’ll come out of the recession bigger, stronger, leaner and well positioned to reassess our future objectives.
John Dundon is managing director of Angel Springs and has recently been appointed the position of BWCA chairman. Phillipa Clow is secretary general of the BWCA.
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