Springfield Paper Company (SPC) opened its doors in downtown Springfield, MO, in 1906. Throughout its more than 100 years of serving customers with integrity and stellar customer service, the same family has owned the company.
Today, SPC has assembled a staff of forward-thinking employees, consisting of a mixture of Millennials and industry veterans to lead the way in the 21st century.
“We have gone through a phase of rebranding the company,” said SPC Vice President/General Manager Kevin Smith, during a recent interview with Maintenance Sales News Magazine at the company’s facility in Springfield.
Smith explained it became apparent several years ago that the company’s aging staff, many of whom were heading for retirement, had not kept pace with the rapidly changing janitorial/sanitation marketplace.
“Five years ago, we recharged everything,” Smith said. “We ‘spruced’ the place up, purchased new signage, got new logos — we rebranded the whole business. SPC owner and President Tom Wells has spent a lot of money upgrading and making things look better. If you walked in here several years ago, you would have thought you were walking into the 1950s.”
SPC moved into its current building in 1956. Before its recent modernization, walk-in customers would sometimes comment they weren’t sure the facility was open anymore, said Procurement Director Tiffany Sarmiento.
“We replaced the windows and painted the outside,” Sarmiento said. “It looks really good, and our walk-in business has increased because of the appearance of the building.”
Smith added, “Our walk-in business has grown about 20 percent, compared to two years ago.”
The company’s founder, and Wells’ great-grandfather, Harry F. Jewell, began by selling treated wax paper for meat processors and butcher shops in a facility a few blocks from the current location.
“They developed a way to treat the paper with wax so it didn’t leak,” Smith said. “Over the years, the company kept adding more items to its product lineup.”
In addition to founding SPC, Jewell also started the local newspaper in the 1800s, now called the Springfield News-Leader. SPC supplied giant rolls of newsprint to the newspaper.
Wells’ grandfather, the late T.W. Duvall, built the current facility, which originally had a rail spur adjacent to the building, allowing the company to bring in products by train. The rail spur is no longer in use.
“Over the years, SPC added janitorial supplies and food disposables. Fine paper was also another big business item for the company, in addition to cut paper, roll paper, shipping supplies, packaging, etc. We kept growing and diversifying more and more.”
Today, paper and jan/san products remain the company’s core business, as it serves the greater Springfield metro area with a population of about 400,000 people. Outside the immediate area, SPC serves customers located in a radius of about 150 miles from Springfield.
“Almost all of what we sell we deliver on our trucks with our employees, which we think gives us an advantage in our market,” said SPC Accounting Manager David Reid. “About three years ago, we started selling commercial floor cleaning equipment to complement our jan/san business. We sell six lines of floor cleaning equipment, and we have a specific website just for our equipment called www.SPCvacuums.com.
“We sell vacuums coast-to-coast. Our marketing director, Ashley Cook, has done a lot of things to drive traffic to that website, and it has become a nice ancillary business for us.”
“With SPCVacuums.com, we sell floor equipment nationwide, and this business is slowly growing,” Smith added.
Recently, SPC launched a new service to help customers build and manage websites.
“We started a new division in the company called SPCimpressions (www.SPCimpressions.com),” Reid said. “This service grew out of Ashley’s knowledge of building websites and driving traffic to them.”
Reid explained that because of Cook’s skill at driving business to the SPC website, she and Smith hatched the idea of offering a service (SPCimpressions) to help customers establish and drive traffic to their own websites.
“We have many customers who don’t, at this time, have websites. We think SPCimpressions is a great complementary business that, not only is a new source of revenue for SPC, but is also very helpful to our customers and will garner additional loyalty,” he said.
Capitalizing on shortages of ice melt in certain parts of the country that suffered through hard winters the past couple of seasons, SPC also ramped up its ice melt sales.
“We traditionally sold about a truck or two a season of ice melt,” Smith said. “Ashley (Cook) came up with the idea to build a website just for ice melt, www.spcicemelt.com. As a result, we now sell ice melt nationwide. We went from selling one or two truckloads to selling 22 truckloads a season.”
Cook keeps an eye on national weather patterns during the winter. When a storm hits a particular area, with her knowledge and ability in building and working with websites, she is able to make sure companies in the effected region are driven to www.spcicemelt.com when they do an Internet search for ice melt.
“For example, two winters ago, we shipped ice melt to Long Island, NY, and Baltimore, MD,” Reid said. “If there is a storm system somewhere, she (Cook) will concentrate on having our name come up in that market when companies search the Internet for ice melt.”
Smith added: “We started www.spcicemelt.com because the need was there. Some companies were desperate for ice melt because their suppliers had run out. With this service, we have picked up customers. The upcoming season will be our third year of selling ice melt nationwide. We are excited as it has been a big revenue generator for us.”
The Ability To Adapt
SPC’s customer base is comprised of several segments, including convenience stores, the company’s largest customer segment; restaurants; schools; hospitals; grocery store chains; and banks, one of which has locations in nine states.
“Over the years, our biggest customer category had been people who use food disposables, cups, plates, forks, knives, straws, all those kinds of items,” Smith said. “That was the top sales category for several years, but it wasn’t the biggest moneymaker for us. Therefore, we decided in order to raise our profits, we would have to change gears a little.
“As David (Reid) said, three years ago we brought in floor equipment to complement our regular jan/san business. In addition, we began focusing on going after new business in jan/san supplies, such as towels, tissues, soaps, can liners, chemicals, etc. Now our largest customer base is in the jan/san marketplace, and jan/san sales are one of our biggest moneymakers.”
SPC officials say their company’s ability to adapt to changing market trends, customer needs and new technologies has made it stand out from the competition.
“One of our niches is being able to adapt, and that is what we have emphasized the past few years,” Smith said. “Until five years ago, the company ran pretty much the same way that it had done for 30 or 40 years. Five years ago, we decided to update. We started with our technology. We brought in a new computer system. We also installed a new software system tailored specifically for the jan/san industry.”
Installing the new technology took some time. It also meant some of SPC’s veteran employees would have to be able to adapt to some major changes in the traditional way they did their jobs — some did, while others did not, electing to retire.
Two longtime staff members who were approaching retirement remained with the company long enough to help with the transition, while the new computer and software systems were being brought online.
“One of the gentlemen started here in 1967 and the other employee had been here 30 years,” Smith said. “They were gracious enough, with their combined 77 years of experience, to stay for another year (after we brought in the new system) to help us get everything moved over and going. After that, they were ready to retire, because it was such an enormous change.”
Some members of the sales staff also retired as the new technologies being implemented at SPC also greatly changed the way they had been doing their jobs.
Traditionally, SPC sales people called on customers with their catalogues, order pads, pens and pencils. They received orders from customers and brought them back to the company to process, or they took orders over the phone, Smith explained.
“Now, our sales staff has iPads and laptop computers,” Smith said. “With these devices, our sales people can get online and access our server from anywhere on the planet that has a cell signal or a Wi-Fi signal.”
For example, Smith said Sarmiento was in Florida recently visiting family and working. She placed some orders electronically from Florida, which surprised some employees in the warehouse.
“One guy in the warehouse said, ‘I didn’t know Tiffany (Sarmiento) was here,’” Smith said. “I said, ‘She isn’t. She is in Florida.’ He said, ‘Well, I have orders coming into the warehouse from Tiffany.’ I said, ‘She’s able to do that.’
“We still have one gentleman here who is 70 years old. He doesn’t carry an iPad. He still likes to do it the old-fashioned way, and that is OK, because his customers like it, too.”
Here Come The Millennials
As the changes being implemented prompted many veteran employees to retire, SPC hired younger people to take their place. “We have brought in new energy,” Smith said. “We hired some people who are a part of the Millennial generation. They are much more tech-savvy and they are offering more energy and new ideas. Their way of doing business is different from what we have done in the past.
“For example, Ashley (Cook) came in and built our website. It is very user friendly. A customer can get on our regular website, www.springfieldpaperonline.com, and log into his or her account, and within two or three clicks be ready to place an order.”
The website also keeps pricing information up to the minute and enables customers to review past purchasing history.
“While some customers are still ‘old school,’ most of them like our new website,” Smith said.
Not only has SPC’s staff been influenced by the younger generation of jan/san professionals, Millennials are also becoming evident in the company’s customer base. Like the younger SPC staff members, Millennial customers have different styles of doing business than their older counterparts.
“The younger generation of customers don’t need a sales person visiting them all the time,” Smith said. “They like to conduct business online and on the phone. They can access our website on their phones or an iPad, or whatever device they choose, to place orders. We are adapting to accommodate whatever the customer wants.”
Sarmiento added: “Millennials are moving into positions where they are doing the purchasing for companies. As a result, we are seeing a big trend in online presence. For example, I am a Millennial and I don’t really want someone coming in trying to sell me something. I want to get online and shop around and find what is best for me. I want to compare prices and place my order. Therefore, as the younger generation is moving into the jan/san field, we are seeing a lot more importance in the online authority that we have.”
“One of the reasons we started SPCimpressions was to build and maintain websites for our customers to help them increase their business,” Smith said. “Many of our customers now rely on this service. If they don’t have the right traffic coming to their websites, then they are missing out on a lot of sales, which is one of the things SPCimpressions provides. We can drive paying customers to our clients’ websites.”
While the younger generation is beginning to make inroads into the jan/san industry, both as sales people and customers, there still are many customers who like the old-fashioned approach. Smith said the company’s younger staff members, including sales people, are savvy enough to realize all customers aren’t as motivated to embrace change as they are.
“Our younger sales people know they still have to build relationships with some customers who want to do business the more traditional way,” Smith said.
While SPC’s younger staff members have brought new ideas and energy to the table, there is a learning curve involved in selling to such a wide spectrum of customers.
“We are so diversified, our sales staff has to know how to sell to food processors, convenience stores, banks, restaurants, contract cleaning companies, hospitals, schools — all the above,” Smith said. “Therefore, while we give them the tools, technology and training they need, it takes a while for new sales people to get up and running.
“We emphasize the importance of remaining persistent. For example, let’s say a member of our staff calls on someone and finds that person has been with a competitor for 20 or 30 years. We would tell our sales person to stay in there, go back and visit, send that email — be persistent. At some point, that person is going to have a problem that his or her current supplier can’t, or won’t handle. That is the time our sales person can provide a solution and win a new customer.”
Sarmiento added: “Because of our product lines and our resources, we have been able to adapt to our customers. We are very good at going out and conducting on-site demos and training. We can also help a customer monitor his or her inventory.
“We have the resources and the knowledge to be able to help customers in any way they need. We are available to them, whether they want to see us every week or if they want to text us. People can contact us by however means necessary.
“Regardless of the economic times we are going through, everyone tries to save money. We are able to help by maintaining competitive prices with our vendors. We work very diligently, one-on-one, with each vendor to make sure we are competitive in the market.”
Great Game Of Business
To help make sure employees remain engaged in the company’s business, SPC officials have adopted an open book management paradigm called “The Great Game of Business.” The program was developed by Jack Stack, who is nationally known for this method, and is also a local Springfield entrepreneur, according to Smith.
“Every week we have a huddle,” Smith said. “We have the whole company come in and go over the numbers.”
To make this work, Smith said one of the first things that was done was to educate staff members on financial literacy. They were taught how to read a balance sheet and an income statement. Employees also learned about what a general ledger involves.
“Every day we read the numbers, we see where we are,” Smith explained. “At the beginning of the year, we create a budget. We track the budget daily to see where we are at as far as sales and gross profits. Then, we make a forecast. We don’t change our budget numbers, but we change our forecast numbers. That way, at the end of the month, we are not going to be in a situation where we say, ‘Wait a minute. We missed it by $10,000.’
“Each day we know where we are at so we can make adjustments, or we can identify the need to get out there and push this or that item.
“All our employees know what is happening. If we didn’t make our goal, they know we didn’t make our budget. If we lost money, everybody knows how much we lost. They know how much money we have in the bank and how much is out there in accounts receivable.”
The Great Game Of Business is designed to facilitate teamwork and to keep all employees focused on the same goal, which is to make more money.
“The nice part about this is, I’m not managing from the top down, telling everybody what to do,” Smith said. “We are kind of flipping it upside down, and we are getting ideas and suggestions from everybody.
“Last year alone, we saved $50,000, that went right to the bottom line, from ideas we received from our employees about where we could cut expenses.”
Cook added: “The main idea is, if we all profit, if we get to where we want to be in profitability, then everybody gets a piece.”
Smith explained that once a certain level of profit is reached, which is determined by ownership, each employee shares in that profit, receiving a bonus based on his or her percent of the payroll.
“Every employee is responsible for a certain part of our bottom line. We want them to continue to take responsibility for what they do that impacts the bottom line,” Reid said. “That is precisely the reason we have a meeting every Monday morning and go over the month’s budget, the updated forecast for the month, and what we need to do to make sure we beat that budget and achieve the forecast that we made.”
Smith praised Wells for allowing the new management team to make the changes designed to bring SPC to the forefront in progressive business strategies and technologies. Wells has been with the company since 1976.
“He (Wells) comes in every day and gives us a lot of support,” Smith said. “It is a really good atmosphere in which to work. It is a real team oriented company, with a family-like atmosphere. We are all rowing in the same direction.
“We have four full-time employees and one part-time person working in the warehouse and as drivers. We have two people up front who work in inside sales. We have a person who is in charge of accounts receivable/accounts payable.
“A couple of guys in the warehouse have been here more than 20 years. One of our office employees has been here 20 years. The rest of us are fairly new. Because we don’t know the old ways of doing things, we have come up with our own methods. So far, it seems to be working well.
“Some of the people here are related or longtime friends. Tom (Wells) and David (Reid) have known each other since they were children. Tom hired me six years ago as a delivery driver because I needed a job. I came out of the construction industry. The construction industry suffered when the housing market collapsed. Tom gave me a job delivering toilet paper. We were fortunate a couple of years ago to get David with his background in accounting. We had a bookkeeper in that position. We had not had an accountant previously and he has done a lot of good for us getting things streamlined and more organized than it was before. He also is in charge of human resources.
“We recently promoted Charles Bentley to sales manager. Tiffany (Sarmiento) oversees some key accounts. She also moved into the purchasing office last October. None of us came from a background in this industry, except Tom.”
While SPC has had some success in attracting younger people into the jan/san distributor industry, finding the right sales people remains a challenge.
“It is very difficult to find good sales people. However, they are out there, and we have been fortunate to find a few. It is a process,” Smith said. “There isn’t any one place we go looking for them. We use temp agencies, staff agencies and word-of-mouth. We also post job openings online. It is tough getting young people interested in selling toilet paper, floor finishes, etc.”
Smith used Sarmiento’s journey at SPC as an example of someone coming into the industry and being successful without having a background in jan/san.
“We hired her three years ago. Her educational background was in biomedical science, but she had an interest in sales. She came in and she worked hard. She will go out there — she weighs just 95 pounds — and demonstrate to a group of 15 custodians how to strip and wax a floor. She is good at it and customers respect her, as she is very knowledgeable. By the first three months she worked here, she was hitting her numbers. After that, she was our top sales person every month. It is just finding the right person. I’ve hired people I thought would be a perfect fit, but they just weren’t interested.”
Sarmiento added: “What most appealed to me was simply sales. I also have a background in sales. I was in real estate for about five years. I enjoy the challenge and the self-motivation that it takes to be a successful sales person. Being willing to meet people at whatever hour they need and going the extra mile to get a sale is a fun challenge.”
A New Pricing Matrix
Reid reported SPC’s business is “growing.” As part of the effort to improve margins and increase sales in the jan/san segment, company officials developed a new pricing matrix.
“Ashley (Cook) and Kevin (Smith) came up with the idea of changing the way we price our products for customers in the various segments we serve,” Reid said. “We lost some business as a result of the new pricing matrix, but it was business where our profit margins were negligible. We didn’t mind losing that business because we are concentrating more on customers where we can realize better profit margins.
“Last year, our revenues grew from $3.1 million to $3.5 million. We are trending very well in that area. Just as importantly, our profit margin went from about 25.5 percent gross profit to about 26.7 percent. That is more than 1 percent change in gross profit. Of $3.5 million in sales, that is $35,000 that goes straight to the bottom line.
“Our projections are to grow this business to the $5 million gross revenue mark in the next five years. We have the infrastructure to accomplish that. We have the building, the warehouse, the trucks and the people to realize this goal. Beyond that, we will be at a different level; therefore, during the next five years, our strategic planning will be to know when we get to that point, and what we are going to do from there.”
Smith explained how the new pricing scheme works.
“We needed to bring our bottom line up. To do this, we had to increase our gross profit margins,” he said. “Ashley (Cook) came up with the basic idea, and we worked on it every day for three months to bring it to fruition.”
Smith and Cook identified 13 separate customer categories, including churches, convenience stores, contract cleaners, meat processors and more.
“Then we came up with about 20 different product categories, such as paper, liners, food disposables, shipping supplies, industrial supplies, etc.,” Smith said.
The pricing matrix that Cook and Smith developed involves a sales person determining how much potential business an individual customer will account for in a year, Smith explained. The sales person then puts that customer in a certain category determined by how much business he or she is estimated to generate in a year, such as below $1,000, or $5,000 to $10,000, and so on.
Once that is determined, SPC sets different discounts for that customer in each of the product categories.
“A contract cleaning company, for example, will receive its biggest discount on trash can liners, floor wax, floor finishes and equipment,” Smith said. “The contract cleaning company will not get as big a discount on items that it purchases in smaller amounts, such as break room or office supplies. The result is we will make more money on those products.
“With a church, the discounts may be different. They use a lot of products in their fellowship halls and/or places where they have meals. Therefore, we are going to give a church the biggest discounts on food disposables. However, for jan/san supplies they don’t buy as much, we are not going to give them as much a discount.
“This pricing matrix optimizes the profits we make on everything we sell to every customer. So, rather than implementing an across-the-board markup, a customer may be paying 25 percent above our costs on some things, and 40 percent above our costs on other products.
“On the customer’s order form, it shows what the regular price would be, and it shows the discounted price. The customer sees it as a discount. Immediately, one of the things we did was make sure a customer would not see more than a $2 or $3 increase on his or her prices. We lost a handful of customers, but we did see an immediate significant increase in our gross profit.”
Studies On Compostable And Biodegradable Items
As the awareness and desire for cleaning for health and safety increases, environmentally friendly, or “green” products, are more in demand by consumers. SPC has green products to offer in each of the segments it serves, Sarmiento said.
She added: “I see the market for green products growing. I think it depends on the industry. We currently sell green products to the city government, the zoo, to a local university’s food service department, grocery stores, among others.”
On its part, to help take care of the environment, SPC has initiated a robust recycling program.
“In the past, we took a large truck full of trash, a lot of it was plastics and paper, to the landfill every three to four weeks,” Smith said. “Now, we have a 70-gallon container of trash that gets picked up once a week. Everything else goes to recycling, such as cardboard, plastics and paper items.”
In addition to recycling, SPC has worked in conjunction with some of its customers who have done studies on compostable and biodegradable products. What SPC’s staff has learned about these products has enabled them to pass on some valuable information to customers to save them money.
“We have been educated on how the process works,” Smith said. “People may have all the great intentions in the world when buying compostable or biodegradable products. They even go to the extra expense to purchase those products. However, if they put a biodegradable or compostable product in a plastic trash bag and take it to a landfill, the material will not break down any faster.
“With the knowledge we have gained, we can educate customers. We teach them to make sure they send compostable and biodegradable waste to the proper facility to have it processed correctly.”
SPC’s staff is also able and willing to educate customers in other ways, as well. SPC reps are always on hand to conduct demonstrations at a customer’s facility for floor care and equipment.
“We also go to schools and conduct demonstrations for their entire custodial staff. We teach how to use a machine or strip and wax a floor or how to use a product to get the most from it,” Sarmiento said. “It is a big deal to teach customers how not to be wasteful.”
In the past, at its facility, SPC has conducted some formal training seminars.
“Our plan going forward is to have an area here where we can bring people in and conduct regular training sessions on such subjects as how to take care of certain types of tile and concrete floors, for example,” Smith said.
Speaking of SPC’s facility, Sarmiento pointed to its location as a plus. The company’s 150-mile radius primary service area encompasses some significant metro areas and parts of neighboring states.
“Another point is, everything we do is done here in-house,” she said. “We have our warehouse here, our purchasing, our sales force — everything is right here and accessible to everyone, which we think is a big advantage.”
Smith added: “In the Springfield metropolitan area, we deliver twice a day. If a customer places an order in the morning, he or she will usually receive it that afternoon, depending on the area.”
SPC trucks also make deliveries to customers located northwest of Springfield into Kansas City, MO, and other areas.
“We have trucks that deliver to Branson, MO, Eureka Springs, AR, west on Interstate 44 to Joplin, MO, and into Kansas and Oklahoma,” Smith said. “Each day we track how many items we put on a truck. This helps the person who is responsible for that territory know what his or her sales are in that area, and what he or she needs to work on. We deliver everything on our own trucks with our own employees.”
SPC officials consider delivery drivers an extension of the company’s sales staff. Drivers don’t just drop off products at a customer’s facility and then leave.
“Our drivers put items away for customers,” Smith said. “They also rotate the stock for a customer. This is important and many people really appreciate this effort. We have won customers back, because, after going someplace else for price, they came back to us for service.”
Sarmiento added: “While our drivers are at a customer’s facility putting products where they need to go, they are also talking to people. If a customer has a need that comes up, the driver can relay it to us and we an help fix the problem, or meet another need we might have been missing.”
SPC’s facility is comprised of about 3,500-square-feet of climate controlled offices and showroom, and about 42,000-square-feet of heated warehouse space, Reid said. The facility also has an equipment service area.
“We contract out our equipment repairs to two technicians who are on call,” Smith said. “They typically work on equipment at a customer’s facility. If it is needed, we can bring equipment back on one of our trucks.”
To track inventory, SPC uses state-of-the-art software.
“We also conduct a physical inventory once a year to make sure all the numbers match,” Sarmiento said.
Reid added: “We were under 1 percent variance when we inventoried this year. We patted ourselves on the back for that one.”
Conducting a yearly hands-on inventory is a task that had been neglected until recently. Reid said SPC has been doing the inventories for the past three years.
“Taking the inventory is an example of everybody working together to make sure we control our losses,” Smith said. “We watch everything. We check everything three or four times, making sure the right things are going out the door to the right person. There are mistakes occasionally, but we work hard to make sure they are corrected quickly.”
Reid added: “We all feel very good about the future of this company. We have a group of people who understand that, five years from now, this business won’t look like it does today. We serve so many business segments that we can overcome problems if one has a bad cycle.
“Also, our market makes us a little recession proof because it is heavy in health care, education and government. I think these three market segments are pretty much recession proof. It is not that this company didn’t feel it during the recession of 2007 and 2008. We lost some customers that couldn’t survive the down economy, many were mom and pop companies. However, we still have a real good base of customers that gives us the enthusiasm to think this company is going to do really well in the future.”
Contact: Springfield Paper Company,
412 National Ave., Springfield, MO 65802.