Laundry specialist seeks to make a mark
Laundry and catering equipment supplier JLA plans to double in size over the next five years following the launch of a commercial heating division promising fast response times.
H&V News, Ian Valley reports
With high-profile business failures hitting the headlines because of over-diversification to the detriment of their core business - the most notable recent example being Carillion - it might seem a bold move for a company to launch a division. on the face of it outside its traditional areas of influence.
However, Graham Latta, group business development director of JLA, firmly rejects the comparison. His company, best known for its laundry and catering operations, last year began a move into commercial heating; for Mr Latta, this fits perfectly with JLA's business model: "Our core business is the service of critical assets.That is what we do well. If you look at our track record, when we have added additional asset classes we have continued to expand the business year on year, [achieve] double digit growth, with excellent rates of retention and customer feedback."
There are two further factors that convince Mr Latta that JLA's decision to enter the heating market is a smart move: "First, we have done a lot of research prior to making this move [which confirms that it is a popular move with the company's customers] and, secondly, we have invested in dedicated expertise so we're not just trying to make do with what we've already got."
JLA's move into the heating sector involves what it describes as a 'total care package', which provides its customers with commercial boilers backed by breakdown cover and maintenance support, all for a monthly fee.
Among the heat generators the company is offering are wall-hung and floor-standing boilers, water cylinders and water storage heaters. It commits to buy these, install them and give a service commitment, all at its own cost, so there is no capital outlay for the customer.
JLA has invested around £2m in operational expenditure on its heating division so far, but is also in advanced discussions to acquire a number of heating businesses, so its likely to spend additional sums in due course.
"We received a lot of requests for JLA to extend our services into the boiler room"
Founded in 1973, the JLA Group has traditionally distributed, rented and serviced commercial laundry equipment, commercial dishwashers and regulatory compliance tools. The company is also involved in distributing catering equipment in the UK. So what prompted it to enter the heating arena?
Mr Latta explains:"I think, first and foremost, it resulted from a request from our customers. Obviously, we did our market research, but we have more than 270 engineers in the business so, both directly from our customers when we spoke to them and indirectly through our engineers, we received a lot of requests for JLA to extend our services into the boiler room."
The first stage of the company's move into heating involved its development team conducting customer-led market research to understand the competitive landscape. So it examined what the new division would look like, what customers were experiencing in the market, and what, ultimately, they wanted to see from JLA.
Mr Latta again: "It was all about understanding how we could adopt a winning formula that would resonate with our existing customer base. A lot of our customers across multiple markets are SMEs so we homed in on them to make sure we hit the right notes."
JLA's business was all about looking at its customers' critical assets (laundry and catering equipment) and it identified an opportunity to service another critical asset - the boiler, which provides hot water and heating.
Defining the proposition, and working with its service and manufacturing partners to facilitate delivery, was the second stage of the process.
Mr Latta explains the proposition: "Effectively, for a monthly rental subscription, we offer our customers a blended heating solution for no capital outlay. So, essentially, we are saying to the customer: 'For your monthly fee we will install the boiler, provide you with a service commitment [a national four-hour response] and guarantee that we will not leave you without heating and hot water - if we have been unable to provide a fix within 24 hours, we will put in temporary heating.'
He summarises the appeal: "Basically, we provide our customers with peace of mind for a monthly payment."
The third stage involved going out and talking to customers about the proposition, he says. "It is all about talking to customers - getting salespeople in front of customers and talking through the solution: `Here's the offer, here's what it looks like, here's the commercial side of it' -all that stuff, to get a true sense of market feedback.
"That's a fairly short stage - three or four months.What you are doing at that point is satisfying yourself that what you've got is something that is going to resonate really well in the market because you've done all the desktop research and are out talking to customers at the coalface and it should be positive. Therefore, at that point, you scale it up and invest significantly, which is where we are now in terms of engineers, marketing people, customer-support and no on."
When JLA invests in a new division, it puts dedicated people on it, Mr Latta promises.
So JLA is in the investment phase of an ongoing process, but future plans include building out the `total care' aspect of the investment, Mr Latta says. In three or four years, he plans for the heating division to grow to around 150 people, comprising 100 engineers, with the rest as support staff.
- Article published by H&V News March 2018 Edition. For the full article follow this link: http://digitalissues.hvnplus.co.uk/2018/Mar/index.html