An Educated Customer Is The Best Customer

Distributor training programs can be a profitable niche market.

By James M. Earlbeck

Training is one of the best investments a company makes, but it's important to realize that an educated customer is just as important as well-trained staff. Providing training and certification programs has served Earlbeck Gases and Technologies in countless ways over the past few decades, as we have benefited from skilled staff, informed customers and a program that performs well in slow economic times.

Each booth is equipped with a manifold system, tool board, welding machine and wire feeder. The metal fixture on the right draws smoke into the ventilation system.

Our company was founded with the belief that an educated customer is the best customer, so we've always had a technical view toward sales. Having a mechanical engineering background, the business model that embraced technical sales just seemed to make sense to me. So when I took over the business in 1977, we immediately began to enhance the technical side of our welding sales business.

However, getting into the training business wasn't a revelation or an overnight decision. It started because we realized our customers were not getting the training they needed to remain competitive in the marketplace. A customer would sometimes buy a power source from us that would increase his productivity, then come back in a couple of weeks for more instructions because he couldn't figure out how to master the machine. Eventually, we realized that in order to sell the more sophisticated machines, we had to train the customer, or his level of satisfaction would be low.

We also realized that we were providing this training for free just to keep the machines sold. This was not an acceptable situation given the margins on the machine sales.

Training Site Specifics
We originally set up two booths for welder certification; after seven years we expanded to five, and about five years ago we grew to occupy a 12-booth, 4,500 sq. ft. dedicated training facility. Currently, that facility operates five days and four nights per week. The booths are large, self-sufficient and self-contained, and each is outfitted with its own welding and cutting equipment. Ten feature 350mpi power sources capable of DC SMAW, GMAW and GTAW, and two feature HA252 power sources capable of AC/DC GTAW and SMAW. All the booths are serviced by gas manifolds that provide various shielding gases, oxygen and acetylene. This safety feature helps by keeping the hazards of cylinder storage and movement away from the student. There is a demo area in the center of the training facility. The 800 sq. ft. classroom lecture area is set up to handle 18 students and houses a complete library.

Twelve self-sufficient and self-contained training booths are in the technical center. All training booths are equipped for MIG, TIG and stick welding.

The director of our Engineering Department, Jerry Cramblett, is a degreed welding engineer. His department includes two full time and two part time staff members. The engineering department provides three areas of service—welder and procedure certification, weld engineering consultation and welder training. Our most popular training program is “Fundamentals of Welding,” an 84-hour course that introduces the most popular welding processes and the associated topics to those processes, i.e. welding symbols, distortion control, inspection and basic metallurgy.

Our certification service has continued to grow every year due to increased consumer demand for quality and a litigation-focused society. Since starting our certification program in the late 1960s, we've certified over 12,000 people.

On the Road
In May 2002, we began to offer instruction in a mobile training facility consisting of a dedicated Ford F-550 truck and a

40 ft. trailer housing eight booths. Each booth has its own fume exhaust system and contains a Miller XMT 304 CC/CV power source and wire feeder. A manifold supplies all the shielding gases for both GTAW and GMAW. The truck holds the gas cylinders and a 70 KVA three-phase generator. The entire operation is self-contained and can be operational within a half hour once it is on site. Currently, it's on the road four days of the week, spending two days at each job site.

The training center's 800 sq. ft. classroom, equipped with state-of-the-art AV equipment, can seat up to 90 people.

For now, the mobile training facility is used to fulfill our training contract with a state highway administration. However, once that contract is up, we will be using the training trailer with other highway administrations and current customers who have expressed an interest. The program has been so successful that we're considering putting more of these mobile facilities on the road.

Right now, Earlbeck Gases and Technologies' training classes are available only to industrial clients, which provides us with students who are guaranteed to be motivated. Typically these students will see a financial reward immediately after graduating the course because their employers have promised them new, higher-paid positions once they pass. This motivation makes them easier for us to train and adds to our success rate. Starting in the spring of 2004, we will be partnering with Anne Arundel Community College in Arnold, Maryland, which will open our courses to a broader audience. The college hopes eventually to use these courses as a basis for an associate's degree program in welding technology.

Benefits for the Distributor
With the popularity of our training programs, the engineering department is a stand-alone profit center for us. However, there are several benefits to the distribution side of the business. For example, before a contractor can start to build something, he has to get his welders certified. So if we suddenly see a lot of welder certifications for one company, it serves as an indicator that they probably have a new contract. That lead goes to our sales force, and sometimes that advance notification is enough to win the sale, because we have an edge on the competition as to where the need is going to be.

A Ford F-550 truck and a 40 ft. aluminum trailer containing eight welding booths serve as a mobile training facility. An MQ-powered 70 KVA generator and gas cylinders are mounted on the truck bed.

All Earlbeck Gases and Technologies staff go through welding training classes. Our philosophy is that everybody on staff is a salesperson. That includes everyone from people who work the counter to truck drivers to warehouse personnel. In order to be a salesperson, though, you need to know how the product is used. By including all of the staff in our training programs, we increase their knowledge of the industry. This not only helps to reduce the error rate on product shipped, it also provides us with “backdoor salespeople” on every front. Truck drivers become not just people to drop off product. They become a source of information on what our customers are doing and thus what their potential needs might be. All of our staff members have enough knowledge to be able to make suggestions to improve customers' productivity, and this adds value to the sale.

Important Considerations
There are many considerations that come with offering training programs. For one, there are high costs associated with establishing training facilities. Our mobile training facility costs in the six figures to produce, and has high operational costs. However, manufacturers often provide assistance. They want to get their equipment into schools, since a student usually develops an affection for the machine he learns on. You never forget your first girlfriend, your first car, or your first welder!

The additional business activity that comes with training programs requires additional insurance, but it is just slightly at a premium compared to our general liability, and not really prohibitive when compared to the insurance load for handling gases.

An efficient smoke removal system with a 10,000 cfm blower keeps the booths ventilated.

Another consideration is whether to become an AWS certified lab, a program the American Welding Society began about five years ago. There is additional expense involved, but it can benefit a certification program, especially in terms of marketing potential.

Looking at Margins
In the current business environment, with margins decreasing on capital equipment and even consumables, training can be much more lucrative from a profit margin standpoint. But more important, we've found that training acts as a flywheel for our business. In a slow economy, people invest in training and education because they have the time and want to prepare for the economic recovery. So even though capital equipment sales have been down and consumables have been soft, our training activity is up, which has really helped during this recent recession.

By emphasizing our training programs, we've tapped into a niche market that has benefited the company in many ways. Wholesale distribution is our core business, but we are looking to be more than just another place to buy some stuff in a box.

Engineering programs help keep us focused on the customers' needs and underscore our role as a trusted consultant. We want to educate our customers as much as possible and help keep their businesses viable. This, in turn, keeps them in the market to buy our welding equipment and supplies.

When it's done right, everyone benefits.