In this episode of Trade Talk, Tommy Cue talks with Theo Stathakis from Mingledorff's. They spend time talking about their dealer meetings and how Mingledorff's manages to keep its contractor base loyal. They also get into how COVID has caused them to find different ways to adapt to the new normal.
Host: Tommy Cue, JB Warranties
Guest: Theo Stathakis, Mingledorff's
Read the Transcript:
Tommy Cue: Good morning. Tommy Cue, vice president of sales with JB Warranties. I'm here today with JBW Trade Talk with Theo from Mingledorffs. Mingledorffs is a very large distributor over in the Southeast part of the country. Theo, thanks for spending some time with us today.
Theo Stathakis: Fantastic, thanks for having me.
Tommy Cue: We've had a long partnership together. What I'd like you to do is I'd like you to do, is tell folks around the country a little bit about Mingledorff's and their history, if you don't mind.
Theo Stathakis: Yeah, absolutely. Mingledorff's history is pretty extensive going back when it was founded in 1939 by Lee Mingledorff and when it was established back then it was just a carrier contractor. So they were installing the equipment back then. And actually Lee Mingledorff, how he got started was he installed the first air conditioning unit for his father-in-law in Savannah.
Theo Stathakis: So it was first ever air conditioning installed in Savannah and obviously being down there, humid and everything, they definitely needed it. So installed that back in 1939. And actually the original compressor that was in that unit is on display in our Savannah location. And it was still running to the day it was removed in 1988. So pretty cool that the technology worked back then and continued to work until 1988. So that was installed, he did that. And then when World War II happened, like a lot of the country, a lot of businesses stopped, shut down and had to go and help out with the war. So what Lee did is he went to work for building minesweepers for the US Navy. So for a few years, while he was doing that, Mingledorff's was shut down. And then after the war, the company resumed and they became a direct distributor and contractor for carrier products after that.
Theo Stathakis: So you could say that we're born to thrive in chaos. We've done a lot of things especially with the pandemic right now, we do a lot to help out those who need it and especially our customers. So during the war we helped out of the US Navy and now we're helping out our customers and partnering with them and making sure that we're doing all those things right for them, taking care of them. When the residential demand grew for air conditioning, back in the forties and fifties, a lot of direct distributors and contractors out there were competing. So Carrier recognized that the distributor contractors were competing with regular contractors and decided to literally flip a coin to decide what these contractors or distributors were going to do and Mingledorff's got the distribution side of things.
Theo Stathakis: So we got the rights to distribute Carrier products in Georgia, some of South Carolina and a little bit of Alabama, near the Columbus area. So in the sixties, we did a lot of aggressive advertising and that was pioneered by Bob Kesterson our past president and helped grow the brand and the dealers. One of the things that we generally tell our customers is that we want to brand the dealers. The dealers are the people in the neighborhood that the people know and really want to make sure that we highlight them. So that was something that we started doing back in the sixties. And then we grew and grew and grew and in 1985, Bud Mingledorff who we all know very well, became the president and that was around nine distribution centers at the time. And we moved our headquarters up to Peachtree Corners just a little bit North of Atlanta, where we are now.
Theo Stathakis: So as Bud progressed through, we got the rights for Bryant distribution in 1990 in that current footprint that we were in. And then in 2008, David Kesterson, our current president takeover, and he took over 21 distribution centers. And in 2009, just a year afterwards we purchased Equipment Sales Corporation. So that was a distributor down out of the Gulf Coast. So we got the rights for Carrier and Bryant in lower Alabama, the Gulf Coast and parts of Mississippi. And then in the North Alabama Birmingham area, we got the rights to sell Bryant equipment.
Tommy Cue: How many locations are you currently operating out of?
Theo Stathakis: So that was my next thing is, we have 35 distribution centers that are open to direct customers throughout all of Georgia, Alabama, the Gulf Coast and a little bit of Mississippi and South Carolina.
Tommy Cue: Gotcha. And employee head count roughly? Because you're a very large distributor, very large.
Theo Stathakis: We've got over 600 employees right now.
Tommy Cue: Nice. One of the things you guys have done and we've been fortunate enough to be invited to over the last several years is dealer meetings. They're somewhat legendary. How many contractors do you typically get on a normal year to your dealer meetings? Tell me a little bit about how that all works for you all.
Theo Stathakis: So generally our attendee count gets to about 350 dealer attendees that come to our dealer meetings. We have about 120 vendor attendees that come and about 50 sponsors. So overall last year I think we had over 870 attendees at our dealer meeting. Planning those dealer meetings, like you said, they're big. They're a big undertaking and we usually start over a year in advance planning those things out. So typically when we're getting ready to conduct a dealer meeting, I've already done a site visit for the dealer meeting after that. So it's a big undertaking for the marketing department. We've got a meeting planning company that helps us out and we conduct biweekly meetings that far out to see where we are, make sure we're progressing right. And then major decisions that we're making up to six months in advance before the meeting actually happens.
Tommy Cue: Wow. The last one was in Alabama, where's your next one going to be? Or do you even know yet with what's going on in our country?
Theo Stathakis: So actually the most recent one right before the pandemic hit was in Atlanta here, we had that dealer meeting. Mobile was a big hit. It was right then during Mardi Gras, which is where a lot of people don't know Mardi Gras was actually started in Mobile. Everybody thinks of New Orleans, but Mobile is actually where it came from. So we had a really fun time down there. We had the Mardi Gras parade that came by right in front of the hotel that we were staying at. So we got to have really good weather and everybody was outside having a great time. And then so we have to try and beat that every year. So it's hard to do that because everybody has such a great time.
Theo Stathakis: So this past year, our dealer meeting was actually, the night before was the night of the national championship game. And we actually rented out the Gullwing suite down at Mercedes Benz Stadium and invited our customers to come hang out in the Gullwing suite, which is field level. And we got to watch the national championship game. Obviously it wouldn't be getting played there, but we got to watch it inside this really, really cool bar area down there. So it was really a lot of fun.
Tommy Cue: That's nice. You guys have, I'm going to say thousands of contractors and you have both branded Bryant and Carrier. What keeps them so loyal to Mingledorff? Do you all have a whole dealer program That's got incentives and advertising and rebates and marketing funds? Tell me a little bit about your program and what makes you hold onto these contractors.
Theo Stathakis: So when we look at our customers we don't necessarily think of them as customers, we think of them as partners. We're really dedicated to making sure we're equipping them to succeed not only with, the pun is, with equipment we're equipping them, but also giving them the tools and things necessary to help them be successful. Our marketing and advertising programs are very extensive. We provide a lot of benefits for our customers.
Theo Stathakis: One of the big ones is an advertising program that we give our loyal dealers a discounted advertising program that's run through our agency of record, all contractor marketing. We come out, and it's actually right around now this time of year we're going to get started, but present them with specialized marketing by a company that was actually HVAC contractors at one time. So Chris and Michelle were HVAC contractors. They know the business, they've run through the business and then they moved into marketing and they've been doing that for about 15 years, but they get discounted advertising. We make sure that their customers are doing the right things and then we give them a little bit of a discount, help them pay for it throughout the year.
Tommy Cue: Nice. So not only are they a customer and a partner of yours, but you're also helping them improve their business model. You're having them focus on a marketing campaign, which most of the Chuck and the truck type guys don't do that. Right?
Theo Stathakis: Right.
Tommy Cue: So you've got yourself, you've got such an elite dealer base of what I call fad dealers. I thank Carrier for that.
Theo Stathakis: Correct.
Tommy Cue: The loyalty to the Mingledorff's company is phenomenal from your contractor base. We've been fortunate to be a partner of you, JB Warranties and Mingledorff's now going on eight years. You guys have done a fantastic job with us. Most of your contractors sell extended warranties. How do you all put that in front of a contractor to tie an extended warranty to a consumer to allow that contractor to have that consumer for 5 or 10 years? You see the value in that in some of your contractors?
Theo Stathakis: Yeah, we absolutely do. A lot of our dealers find JB being a great value and especially the number of options that they can get to give to their homeowners and the hassle free process that you all provide for them. That's definitely something that we hear a lot from our dealers, that you all are incredibly easy to work with. And then, especially with us, you all are always engaged with us. You all are coming to all of our meetings. Will's always at our open houses hanging out, he's probably eating up all our food. But he's having a good time and we really love all the support that you all give us and our customers because our customers wouldn't use you all. One, we're very selective on who we put in front of our customers too. We don't want to put somebody that's not going to support them or help them out or not communicate with them. That's very near and dear to our hearts. And we make sure that we put those people in front of them that will do that. So you all's support is great for our customers and we really do appreciate it.
Tommy Cue: Some of your Carrier and Bryant dealers... And Will Basko our regional manager for the Southeast used to work for Mingledorff's for just a couple of years, like 15?
Will Basko: 14, 14 years.
Tommy Cue: 14 years. And some of your key contractors over there came to Will several years ago and wanted some custom made marketing material. So with Mingledorff's help with Will's help and with our marketing department, your dealers can get customized brochures, literature and so we produce all of that free of charge for your contractors. So that helps in the engagement as well.
Theo Stathakis: Mm-hmm (affirmative).
Tommy Cue: With that being said Theo, you guys have been a great partner man. You guys are just rock solid that the Carrier, Bryant brand. It is cream of the crop. The Mingledorff's personnel that we have to deal with from Mr. Kesterson, Bud, Jeff, all of them. You guys have been great partners. And I just want to thank you for the brief time this morning on the phone. Is there anything else you need to tell the world, if you will? How are you all dealing with the COVID crisis? Has it affected you in any way or business holding up good businesses?
Theo Stathakis: Business is doing very well actually. I think with the weather has been hot at least. And one thing that we've seen is that with COVID crisis, people are at home right now and they're definitely more willing to get their air conditioning fixed faster because they're sitting in it if it's broken. And people are spending a little bit of money now, too. So I think some of the stimulus coming out helped people, encourage them to spend some more money, especially on home improvements and things like that. So we're doing well.
Theo Stathakis: A lot of our stores were initially closed down and pickup only, but we've adapted, we've pivoted to make sure that our stores are now safe. We've put in some of the best IQ technology out there that we could to make sure that our stores are being cleaned through the air and then manually by hand too. So we're definitely adapting. With our upcoming dealer meeting, that's supposed to be in February in Savannah. It's still a fluid situation. We're still trying to see what's going on and what's going to happen with that.
Theo Stathakis: We've been engaging with our customers and a lot of our vendors to see what their thoughts on it will be and it's still up in the air. We're obviously going to announce once we make a decision, but right now the dealer meeting is pending February 24th, 25th of 2021 in Savannah, Georgia.
Tommy Cue: You said the key word that I've learned this year is pivot. We've got a hundred or so distributor partners across the country. Man, we have learned how to pivot.
Theo Stathakis: Definitely.
Tommy Cue: We're one of the lucky ones. We're an essential business and I get a sales staff at JB Warranties, north of 25 sales folks. And we don't make that many dealer calls anymore, but we've sure learned how to work the phones and host webinars.
Theo Stathakis: Yeah. Definitely.
Tommy Cue: It's been a changed business environment, but you're right, people are staying home. And in the Southern half of the United States, they don't go without air conditioning.
Theo Stathakis: No. You can't.
Tommy Cue: It break and they get another one.
Theo Stathakis: Yeah.
Tommy Cue: Again, thank you so much for the time. I appreciate it very much. And let us know if we can help you.
Theo Stathakis: Absolutely thank you all for having me.
Vice President of Sales at JB Warranties