Veteran distributor maintains customer loyalty through warranties

Arizona-based Mac Tools distributor John Ozenich makes his business successful by focusing on the best advice he has received: "Honor the warranty."


In the December 2009 issue of Professional Distributor, John Ozenich maintained that the key to his successful business was to ensure the customers know that he truly cares about them and their ability to do their jobs. From the basics of personable conversation and customer relationships to the over-and-above tasks of on-the-spot tool repair, this Phoenix-based Mac Tools distributor continues to persevere.

When asked about his most important advice for new distributors, he said, “The best advice that I’ve been giving for years is: Honor the warranty. If you honor the warranty, people will come back and they’ll bring their friends. If you don’t honor the warranty, you can watch your business dissolve.” 

As a technician turned tool distributor, Ozenich performs tool repairs to honor warranties. This isn’t generally a task that distributors look forward to. It doesn’t bring immediate revenue and it may be difficult and time-consuming depending on the specific tool needing repair. But, this is something that has helped him build customer relations over the past ten years.

“I do tool repair on-the-spot. I try to warranty as much as I can right there without having to order stuff. It’s really kept people loyal and helped drive my business for ten years. It’s a key that I think works.”

And work, it does. Nearly 25 percent of his customers have stayed with him his entire tenure, another 50 to 70 percent have been with him between two and five years and another 10 to 20 percent are new or revolving customers.

Even though he has seen success, there are always challenges when running a business. As a distributor, there’s always a chance that a customer will skip out with—or not pay for—a tool.

“The problem with this business model is that we basically give out credit to strangers, if you will. So, you always have the chance of getting skipped somewhere, of giving a guy a couple-hundred bucks worth of tools at 40 bucks a week, and he makes a few payments and gets fired or either bails out on you,” Ozenich said.

He has been able to combat this offset by utilizing his personal relationships with shop owners and foremen to stay a step ahead. 

“I try to keep new customers’ credit limits low for the first 60 to 90 days until I can get a feel, but the other thing is that you’ve got to have a good relationship with the shop foreman or the business owner. They’ll give you their best feel on whether someone’s going to perform long-run.”

 

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