Mention succession planning at Dallas-based Pepco Sales & Marketing, and you won’t just hear about how President and General Manager Charlie Parham worked his way up from moving boxes in the warehouse to inside sales to accounting to outside sales and eventually into executive management. You’ll hear about the company’s S/MOT program (Sales/Management Opportunity Training) where the company’s next sales leaders are shaped. And at Pepco, it’s not about the experience — it’s about the fit.
“We don’t think of succession planning as just the next group of people leading the organization,” Parham states. “We think about succession all the way down to a territory level — building our bench and grooming new leaders. I want to see the next person who’s going to cover Houston or the Dallas/Fort Worth area because that’s important, too. With the amount of experience our sales leaders have right now, if we’re not thinking now about who is going to come in behind them, we’ll be in trouble down the road.”
CEO Mike Parham, Charlie’s father, agrees: “We’re always looking for future leaders, regardless of last name. Pepco offers many opportunities for self-improvement and growth. Charlie and Rob Still, our customer service manager, developed the S/MOT program, which has brought in sharp young people to help build our business.”
But with the oldest child in the fourth generation of Parhams at four years old, the company must look internally for its leaders. Pepco encourages its staff to participate in industry emerging leader events through the Association of Independent Manufacturers’ Representatives (AIM/R), the American Supply Association and the Heating, Air-conditioning & Refrigeration Distributors International (HARDI).
These leadership capabilities, as well as its commitment to providing the best training and support to plumbing and mechanical contractors, are why Plumbing & Mechanical selected Pepco Sales and Marketing its 2015 Rep of the Year. (Sister publication Supply House Times selected Pepco its Rep of the Year in 2010.)
The S/MOT program is paying off for Pepco Sales as it diversifies its salesforce. Younger members of the team with little or no experience benefit from the training the company provides at its Pepco Academy classes as well as learning the complexities of the business from those who have been in the industry 20 or more years.
“I believe it helps to have a diverse talent pool and use it to achieve your goals,” Mike Parham explains. “You have to have rapport with people and be able to solve their problems by offering solutions. The diversity at Pepco not only allows us to learn from each other every day, but gives us the best options when offering possible solutions.”
With such a diverse salesforce, Pepco Sales & Marketing is able to build lasting relationships with plumbing and mechanical contractors.
“Everyone wants to work with people who are like them, it’s human nature,” notes Charlie Parham, a recent selection to the 2015 Supply House Times’ Young Execs 20 list, which annually highlights 20 up-and-comingyoung executives working in the PHCP-PVF distribution industry. “When you share a generation with someone, you share a common set of experiences that allows you to better communicate with that individual. I believe our age diversity is a big benefit to working with contractors who are becoming much more diverse as well.”
He adds that Pepco also has multiple Spanish-speaking staff members who are helpful during contractor training classes.
Nick Jones, outside sales in fire protection and waterworks,agrees: “If a younger person walks into a contractor’s office who also has younger people on staff, it’s much easier to develop that relationship. You become more reliant on each other as you get older. The trust is there.”
Pepco Sales and Marketing lives with its E3 philosophy — exceeding expectations every day.
“Everyone here, from outside sales to the truck drivers, is expected to apply the highest level of performance to exceed customer expectations every day, whether that person is on the phone, at the back door picking up products or in the field,” says Steve Good, vice president of sales and HVAC sales manager.
It has become a part of the company culture to not only exceed customer expectations, but the expectations of others within the company.
“Every interaction has a customer in it. If a salesperson asks me for help, then he becomes my customer in that scenario and I must exceed his expectations,” Charlie Parham explains. “In practice, we use it to congratulate great performances or train for behavior that we’d prefer to see.”
The sales team’s weekly Monday Morning Drill is an opportunity to share wins from the prior week, goals for the next week and E3 moments, Mike Parham says.
“It’s almost liberating as a business owner when you have a cultural philosophy such as E3 that the entire team rallies around,” Charlie Parham notes.
The trusted advisor
Providing technical training is one of the best ways to connect with contractors, and Pepco Sales & Marketing is doing that with its Pepco Academy training facilities in Dallas and Houston, as well as with two mobile training vans.
The Houston facility added a “wet lab” in 2011 with hands-on training stations, such as for water heater and fire sprinkler training. The Dallas facility, which the company moved to in 2012, is completing its wet lab, which will consist of hydronics, backflow, fixtures and commercial water heaters, as well as a 40-seat training room.
“Once the wet lab is up and running here, we’ll be able to not only educate plumbers via classes, but provide troubleshooting and any kind of technical training that might be associated with the products we represent,” says Greg Hammer, plumbing sales manager and one of two master plumbers on staff.
The mobile vans are sent to jobsites, contractors’ shops, engineering firms and wholesaler locations. On a recent rainy spring day, Pepco outside sales personnel James Wickersham, Charlie’s brother Kevin Parham and 2015 S/MOT class member Thomas DeLeo took the mobile van to an Apex Supply open house in metro Dallas.
Wickersham, a 20-year Pepco veteran salesman, has seen many changes in the industry. “We’re calling on the end-users and engineers, and are more specialized than before,” he says. “But we know the mechanical contractors on a personal basis and when a contractor asks for your advice, you become his trusted advisor. In my opinion, that trust is as good as an order.”
Mike Parham agrees: “The rep is the trusted advisor to the trades. You must know the market, the product, the solution as well as understand your customers and the expectations of your manufacturer and distributor partners. You are the key to education and new trends. And I’m glad, because it increases the value a rep adds to the marketplace.”
That trusted advisor status is solidified when Pepco reps show up at jobsites or take an emergency call to troubleshoot a problem and work with the distributor or manufacturer to provide solutions.
“We represent some of the hot products on the market and contractors know it,” Wickersham says. “They want to know about these products and how they can make their companies more profitable.”
All the sales staff can train contractors on products, but several on the team have certain specializations: Jones, backflow and valves; Kevin Parham, commercial piping, faucets, valves and water heaters; and Jim McStravock, water heaters, piping and valves. Parham (who calls on engineers), McStravock and Gary Smith make up the company’s Special Forces team.
“Part of what we have to do is change old habits,” Jones says. “Contractors are comfortable with what they’ve always done. We have to show them how the new technologies and products from our manufacturers can save them time and money as well as increase their productivity.”
Pepco’s growing hydronics business is fueled by U.S. military facilities and homeowners moving into the area from Northern states. The company recently conducted three hydronics training classes: Dallas (training pro Kevin Parham), San Antonio (plumbing outside salesperson Brittany Moreland) and Houston (McStravock). Contractors and engineers learned how to design and install the right system for the right application.
“Our sales training at Pepco helps us provide solutions to contractors’ problems and priorities as opposed to trying to sell them the product we represent,” Moreland notes.
Michael Hanna, plumbing and HVAC outside sales, agrees: “It comes back to being that trusted advisor — we can go to a contractor and tell him this product will help his technicians perform better or add value to his customer or add more to his bottom line. That partnership is important.”
Hydronic piping is definitely growing for the company, while radiant heating is specified in a few jobs, Mike Parham says. Radiant cooling, however, could have a big impact in the future and the company has stepped up its training efforts for this market.
While Texas has pockets of geothermal heating/cooling and solar hot water system applications, demand is low because of the upfront costs, Good notes. With solar, aesthetics are part of the equation as some homeowner associations frown upon solar panels on roofs. But education of contractors and homeowners is the key to increasing this market, Moreland says.
“We have seen a rise in the demand for all our green solution products, including low-flow fixtures and high-efficiency equipment,” Moreland says. “Some of this is due to code changes as well as building owners and developers seeking LEED points.”
Drought conditions and aggressive water make water quality and water conservation big issues in Texas. Pepco offers many solutions such as whole-house filtration systems and water heater treatment products. And it is one of the few firms to offer a salt-free water-conditioning system, which uses much less water than traditional soft water systems.
Because of this need, Texas plumbers have an opportunity to dominate the water treatment market by educating their customers on the right systems for their homes and businesses. And Pepco can provide the training they need to succeed.
Various staff members are on the boards of industry groups, such as local Plumbing-Heating-Cooling Contractors associations, American Society of Plumbing Engineers and American Society of Heating, Refrigerating and Air-Conditioning Engineers.
“Association involvement is a huge way to connect. We require this from our salespeople and practice it as leaders,” Charlie Parham explains.
“You have to interact with people on social media,” Charlie Parham says. “If you’re just broadcasting, you’re not going to get anyone’s attention. People want you to interact with them, ask them questions. How you do that on social media can have a big impact on how you’re perceived. It’s all about customer touches. If they see your name out there, that’s what they’re going to remember.”
Connection isn’t all about business; activities outside the office can help build relationships, too. Pepco takessmall groups of its contractor clients on fishing trips, hunting trips, various sporting events and factory trips to cement the bond between rep and contractor.
Not only is Pepco proactive in pulling young people into its business, it is looking to improve the image of the trades.
“Our industry has an image problem — people still believe a college education is the way to go and working in the trades isn’t,” Mike Parham says. “I vehemently disagree with that thinking. Few careers allow you to take a high-school education and, with some extra training, turn it into a $100 million business. But you can do that in the plumbing and mechanical trades.
“We, as an industry, can do a better job of telling people in our local communities what a great industry this is. We need to get more money out of college prep and into trade prep.”
50 years young
In 2015, Pepco Sales and Marketing marks its 50th anniversary. Company founder Phil E. Parham moved his family from New Jersey to Irving, Texas, in 1965 when the fiber pipe manufacturer he worked for wanted to transfer him to upstate New York. Recognizing the business opportunities in Texas, Parham knew it was the place to fulfill his dream of building his own rep firm.
Pepco was created in the family’s garage with a few plumbing and hardware wholesale accounts. As the business grew, so did the need for space and the company moved several times. In 1989, the elder Parham retired and left the running of the business to his sons, Mike Parham and Phil Parham Jr., who is now vice president of the company. Mike joined the firm in 1980 and Phil Jr. in 1985.
The second-generation Parhams added the HVAC segment of the business in the 1990s, which was a time of change for manufacturers reps.
“Big boxes, mergers, buyouts — all changed the model of the rep,” Mike Parham explains. “Manufacturers wanted pull-through control of the business and away we went, working diligently to support distribution partners and our manufacturers in the plumbing secondary markets.”
Mike Parham credits the company’s membership in AIM/R, as well as Charlie Parham’s passion for the company, as the catalysts that propelled Pepco forward in the early 2000s.
With AIM/R, the Parhams and other staff members gained valuable business knowledge networking with their peers and studying professional sales techniques. This enabled Pepco to increase its scope by purchasing several rep firms, including Good’s company, and incorporating them into the Pepco corporate culture.
This was a time of technology revolution in the construction industry, of which Pepco took full advantage under Charlie Parham’s leadership — such as customer relationship management systems, job take-offs and tracking technology.
“Charlie has been the driver of all the technology and the majority of the processes we now have,” Mike Parham notes. “His high level of expectations for the team is enjoyable to watch as it develops. He has a real passion for the business.”
The Great Recession brought more changes to the company as it added commercial plumbing lines and expanded its training facilities.
To celebrate the company’s golden anniversary, Pepco is continuing with its annual Super Trip — this year to Mexico’s Playa del Carmen — for qualified wholesale customers. In January, the company began its Promotion of the Month, where each customer who places a qualified order receives some Pepco 50th anniversary swag. From those orders, a winner is drawn each month to receive a Brute cooler and a chance to go on the Mexico trip.
Of course, a big anniversary deserves a big party. Pepco is planning an open house in mid-September — roughly the same week that Phil Parham Sr. started the business in 1965 — for customers, friends and family at its Dallas headquarters.
View additional photos in the digital edition and at http://www.pmmag.com/digital_editions.