Publisher Terry Tanker met with Lynn Piller, the president and third-generation owner of the O'Connor Company Inc., an award-winning distributor of residential and commercial HVACR equipment and products. They discussed guitars, the new and reshaping business landscape, and growth areas for contractors.

1. I understand you're a musician. Do you have a band?

Actually, I play guitar and steel guitar in two bands.

2. Is this a few guys in a garage, or do you really perform?

We perform regularly — on average we play about twice a month. We play a few local clubs and at the studio of an artist we know.

3. One of the most popular video games is Guitar Hero. Have you played?

No, I'm terrible at video and computer games. Since I can really play, I don't need to pretend.

4. Have you seen any signs that things in your distribution areas are picking up?

Yes, it is due to seasonal demand now — even though it has not gotten very hot yet in our territory. We are seeing consumers willing to replace versus just "repair" which is very encouraging. Parts sales are strong, and commercial is holding its own. Our territory did not boom as much as other parts of the country, so even though things slowed down, it was not as dramatic as in other parts of the country.

5. What are your customers struggling with?

Getting leads, cash flow, finding financing for their customers and just making money in tougher economic times.

6. How does O'Connor Company provide help and support?

We provide a lot of education on business skills, company development, and sales. We try to help our customers be better at the retail side of their business as well as the contracting side, so that means we help them with advertising and marketing as well. Our equipment territory managers work very closely with their customers to help them be more successful.

7. What part of your business have you had to reshape or give special attention to this year?

We have not laid-off employees or reduced hours so far. We are tuned into managing our assets and cash flow. Accounts receivable has been a challenge this year and we've tried to have some flexibilty with our customers where it seems prudent. We have increased our frequency of communication with our bank.

8. What is your business mix?

We are about 80 percent residential and 20 percent commercial.

9. Your operation spans five states. What specific challenges does that present, and how do you address those?

The population density is pretty low in a lot of our territory, so our approach is to have large branches in the major cities. We ship directly to the branches from the manufacturers. We have centralized some functions over the past few years so the branches are not quite as autonomous as they used to be, but the branches still tend to have their own character.

10. What type of training do you find contractors need the most help with?

I think the biggest challenge for our customers is to be better at business management, retailing, and sales.

11. What differentiates the O'Connor Company from competitors?

We are a smaller, family-owned business as opposed to a manufacturer-owned or national distributor, and I think that has appeal to our customers.

12. What type of marketing do you do to attract new customers?

The consumer advertising we do in our markets in support of the brands we represent attracts potential customers. We also have events in the branches where we invite potential new customers in to meet the people they would be doing business with and familiarize them with the products we sell. We also put out a catalog twice a year that showcases our products and our company to contractors.

13. What are your most successful customers doing now to attract business?

Our most successful customers are retailoriented. They have annual plans for their businesses. They market to their existing customers and work to get referrals for new business.

14. What have been the keys to the growth and expansion of your company?

Businesses are nothing but groups of people working together to accomplish something. So, of course, it is the good people who work at O'Connor Company and the skills and attitudes they bring to their jobs.

15. In your opinion are contractors making better use of the Internet?

Some are. As more young people who have been raised on computers come of age and become contractors and consumers this medium will really grow.

16. Can contractors buy on-line from you?

We made a large IT investment this year and although we don't have the capability currently we will. We recognize that this is an important capability to have and it is in "the plan".

17. As the economy begins to shift where are the growth areas for contractors?

Energy efficiency has really come to everyone's attention with the Federal tax credits that are available now. IAQ has received the most marketing industry wide so consumers know there are products that can help address real needs they have always had. There is much more interest in geothermal systems now.

18. How do you keep co-workers on the same page, and motivated given the large geography and multiple office locations?

It is a challenge to keep everyone on the same page. Communication is so important. We listen to employees in the branches and try to address their needs and make them feel part of the process. We have centralized some functions and this has helped. Personally traveling to the branches is very important as well.

19. How will government regulations impact the HVACR industry in the next three to five years?

It appears that more regulations will be coming down with respect to energy efficiency and refrigerants. This really puts pressure on the manufacturers to keep product development in the forefront. It will be nice to have the R22 transition behind us by the end of this year.

20. O'Connor Company recently won American Standard's Pinnacle Award for distributors. Can you discuss what that means for your company?

It is an honor to be recognized by American Standard — they are very good to work with. It is something that everyone in our organization worked hard to achieve, and we are proud of the accomplishment.