Big meeting coming up

[hawksfan9325]

Hey guys. I had a question from a sales stand point..

 

I am meeting with a large hospital in my area who is currently working with "Company C" for vending. I looked at their machines and they were typical AP's for snack, and Royals, DN's for soda. What struck me was the pricing of the snacks. Most chips were 0.50-0.70¢. And all candy and chocolates were basically 0.85¢. 

 

The CEO claims that she was sick of the junk food back there, and I said I can certainly offer "healthy" selections, on top of the standards. So, she invited me into a meeting. My meeting is set for Monday. This is a 200 employee account, as well as patients and visitors/family members. Heavily trafficked, gravy account. I also asked how often they see their machines get serviced. She said 2-3 times a week. This is the account we all want. 

 

 

Anyways. I am gonna be honest. I feel a bit insecure with my pricing. I simply can't sell chips and candy at those prices. I have to drive pretty far for Sam's as it is, and all my other accounts are fine with $1 candy and 0.75-90¢ for chips. Have you guys sold big accounts like this, and then charged more than the previous vendor? I guess I just need to be up front about my pricing, and perhaps emphasize meeting their needs for "healthier" options, and above average service. I am gonna offer the Keurig K cup vend idea too, which should afford me a bit of leverage. Is there anything you guys could help with, that could get me this account. I am confident that I can handle this, even though my first 2 years of vending have been a living hell, I see light at the end of the tunnel.

 

 

[mission vending]

Hey guys. I had a question from a sales stand point..

I am meeting with a large hospital in my area who is currently working with "Company C" for vending. I looked at their machines and they were typical AP's for snack, and Royals, DN's for soda. What struck me was the pricing of the snacks. Most chips were 0.50-0.70¢. And all candy and chocolates were basically 0.85¢.

The CEO claims that she was sick of the junk food back there, and I said I can certainly offer "healthy" selections, on top of the standards. So, she invited me into a meeting. My meeting is set for Monday. This is a 200 employee account, as well as patients and visitors/family members. Heavily trafficked, gravy account. I also asked how often they see their machines get serviced. She said 2-3 times a week. This is the account we all want.

Anyways. I am gonna be honest. I feel a bit insecure with my pricing. I simply can't sell chips and candy at those prices. I have to drive pretty far for Sam's as it is, and all my other accounts are fine with $1 candy and 0.75-90¢ for chips. Have you guys sold big accounts like this, and then charged more than the previous vendor? I guess I just need to be up front about my pricing, and perhaps emphasize meeting their needs for "healthier" options, and above average service. I am gonna offer the Keurig K cup vend idea too, which should afford me a bit of leverage. Is there anything you guys could help with, that could get me this account. I am confident that I can handle this, even though my first 2 years of vending have been a living hell, I see light at the end of the tunnel.

Be honest and upfront with your pricing to the decision makers. Sell them on better selection, better equipment and bettrr service. Bring a giant pile of samples, focus on items that are not currently in their machines.

Talk about healthy. Go to fitpick.org, the NAMA, sponsored website for healthy vending and learn about their recommendations for healthy vending programs.

Finally, don't try to be something you are not.

[AngryChris]

In all fairness, this may not be the account that everyone wants.  I'm not saying that it isn't, but there are big accounts that I turn down because I really don't want that big of an account until I have more medium-sized accounts to depend on.  It may sound counter-intuitive, but I always assume that I am going to lose a new account within 6 months and I will have to pay for the investment anyway.

[hawksfan9325]

In all fairness, this may not be the account that everyone wants.  I'm not saying that it isn't, but there are big accounts that I turn down because I really don't want that big of an account until I have more medium-sized accounts to depend on.  It may sound counter-intuitive, but I always assume that I am going to lose a new account within 6 months and I will have to pay for the investment anyway.

God that's smart. Big accounts are intimidating even more, when it comes to your well crafted "doomsday prediction", after 6 months.

 

How long have you been in vending? 

[AZVendor]

You're on the right track with being upfront about your pricing. You need to always charge the prices that you're comfortable with and that will ensure you stay profitable. You are already offering to meet one of the needs their current vendor isn't meeting and those products will already cost more, so don't be shy about your pricing. There is a very good chance that they've had those prices for a long time and the current vendor is afraid to keep up with his costs.

Follow Mission's suggestions and also offer credit card readers for your machines. If you are willing to upgrade their current stack vendors to glassfront beverage machines you will be able to offer more variety at higher prices, making the card readers more cost-effective.

Good luck and keep us posted.

[hawksfan9325]

Be honest and upfront with your pricing to the decision makers. Sell them on better selection, better equipment and bettrr service. Bring a giant pile of samples, focus on items that are not currently in their machines.

Talk about healthy. Go to fitpick.org, the NAMA, sponsored website for healthy vending and learn about their recommendations for healthy vending programs.

Finally, don't try to be something you are not.

 

Yeah man. That site is great. Might just print that sheet off, bring in some samples, and let the DM kinda run the show for a bit. Then see if I can meet his needs, and provide some good service. 

[AngryChris]

God that's smart. Big accounts are intimidating even more, when it comes to your well crafted "doomsday prediction", after 6 months.

 

How long have you been in vending? 

 

I've had my own business since 2010 but I have been in the vending industry since 2006.  And I wouldn't call it a doomsday prediction as much as it is a reality.  

 

Sometimes, when a new vendor comes in and has to negotiate higher prices, the customer gets a little discouraged (because the employees might be unhappy with a price increase) but they feel optimistic if your sales pitch is good.  What can happen (but doesn't happen if your service is good) is that your service is deemed "only as good as the last guy" or "not as good as the last guy" but with higher prices.  The person who got you into the deal may feel as though they have to please their employees by going back to the other vendor that offered the cheaper prices.

 

With that said, if you offer a superior service and keep people happy, then you shouldn't have to worry about it.  I also protect myself with a large investment by demanding a contract that says I will STAY there for at least 2 years (so that I can break-even at least).

 

In almost 4 years of business, I got booted from ONE account, and that was because THEY pushed my machine up against a wall one week before a remodel and my compressor burnt up.  I had to pull the machine for the remodel anyway, but instead of getting me back in the door 3 months later, they told me that they went with another vendor.  I was upset about that one, but it wasn't a service-related issue.  In fact, they said they went with the other vendor because they offered TWO machines instead of one... even though there was no space for 2 machines until AFTER the remodel.  Talk about getting screwed.

 

I'm not trying to discourage you though, and I agree that you have to do what you have to do.  You have to negotiate higher prices because, hey, you are trying to make a profit.  I do NOT think you will lose the account in 6 months, but I would NEVER put myself in a position where a large account could cause an additional payment that I could not afford unless I kept the account.  If you can afford the equipment without risking your business, then there's no risk.  I had to turn down a 200-employee account (blue collar) because it required a $10,000 investment and they would not sign a 2-year contract.  I'm glad I did though, because they have downsized to 100-employees or less in the past 2 years.

[moondog]

I'm kind of with Chris on this deal, a  lot could go wrong here.  On the face of it. a 200 person account would be great to get but the CEO wanting to replace the standard vending fare with heathy snacks scares the hell out of me - we all know how well those sell.  The current pricing is also a problem but could be gotten around with single serve size chips and combo packs of candy bars.  Be real careful about what you sign up for here.

[TKK]

Its got its pros and cons. I just got an account like this last month. Not that big though but requires service 3 times a week.it makes about 3k a month but only with two machines a glassfront and a 5 wide. Pros is the 3k extra gross, cons is until I get an employee no week vacations for me. Ill be honest and every single location that ive gotten either by buying from someone or replacing a vendor I raised the prices alot. If ur sales pitch is good and u tell them straight up ull b fine. I usually tell them well the previous vendor wasnt making much profit hence why they couldnt offer better equipment like this or hence why they sold the business. Then I tell them if you look at walmart or colleges here a can is $1-$1.25 at. 75 you guys have a way better price than most places. You guus were used to the lower pricing but I pay sales tax, and have to do a big investment bringing you this equipment. Alsi my prices are still cheaper than the closest gas station. So why would ur employees want to take time off to get in their car, go through traffic, to overpay for the same product when they can step outside the hall and get it there. If theu r business owners theyll understand. Tell them 3 years ago I could get cans at 22 cents now I pay about 35-40 if im lucky ( including sales tax etc.) theres a million other things to say. Just be friendly and try to compare to things in their lifes. For example healthy sux. What I tell some is the way I make money is offering the best selection for tour employees. If theyd all want diet Coke and dried prunes id fill up the machines, but theres a reason why ur locap movie theatre doesnt sell UN buttered popcorn, salads, or granola bars.

[TKK]

Also u may need to buy more inventory at sams. Its easier buying enough for a whole week. I usually buy enough for 2 weeks pick it up w my dual axle trailer and have it in my garage and just fill up the box truck. If u have to do 3 more trips then it may not be as profitable as u think

[allen watson]

Win or lose, you will gain valuable experience. I you bid enough of these, you will find your "groove" and nail one sooner or later. My first big account changed everything for me. I had never even experienced a vending machine going empty in 3 weeks let alone 3 days. My wife walked in a 350 employee business, dropped off a flyer and nailed the account. They liked the idea of an ice cream machine and good service. Well, we ended up having to go there every morning a 6 am and service machines that were completely empty. They wouldn't let us add anymore machines, so we just rolled with it. Some weeks we were there twice a day. Once a week they would give every employee a free ice cream and pay us for the product and to hand them out at lunch time. The economy crunch hit them hard and they move their entire business from the west coast to the east coast. At first we were devastated. But then we found locations for all the equipment at smaller locations and ended up hardly noticing the difference in income.

 

The nice thing about many smaller accounts is that when one moves or closes, it's not the end of the world and they are not on most vending companies radar. In fact, it's just a small portion of your overall portfolio.

 

Also, when your are the lucky one that gets the big account, you have to realize that every vending company within 200 miles wants it. They will constantly bombard your account with reasons to not use you and switch to them. It's a vicious circle. Also, the company that is in there now will be right back in line to try to get the account back. Every time you service that account, you have to think just before you showed up, the boss was on the phone talking to another vending company. Always ask this, "What can I do to improve my service?" or "If you ever see something I can improve on, please tell me, I will be happy to accommodate you".

[hawksfan9325]

You're on the right track with being upfront about your pricing. You need to always charge the prices that you're comfortable with and that will ensure you stay profitable. You are already offering to meet one of the needs their current vendor isn't meeting and those products will already cost more, so don't be shy about your pricing. There is a very good chance that they've had those prices for a long time and the current vendor is afraid to keep up with his costs.

Follow Mission's suggestions and also offer credit card readers for your machines. If you are willing to upgrade their current stack vendors to glassfront beverage machines you will be able to offer more variety at higher prices, making the card readers more cost-effective.

Good luck and keep us posted.

Do you recommend card readers on both snack and glassfront? Or do the prices of the snacks truly need to justify "the swipe"?

I'm kind of with Chris on this deal, a  lot could go wrong here.  On the face of it. a 200 person account would be great to get but the CEO wanting to replace the standard vending fare with heathy snacks scares the hell out of me - we all know how well those sell.  The current pricing is also a problem but could be gotten around with single serve size chips and combo packs of candy bars.  Be real careful about what you sign up for here.

Yeah man, I agree. She want's more variety and healthy options, not so much all healthy. I just think she doesn't quite get that vending healthy is barely into the first inning. It may never get out of the first inning too. I will be upfront about all these issues regardless. 

Its got its pros and cons. I just got an account like this last month. Not that big though but requires service 3 times a week.it makes about 3k a month but only with two machines a glassfront and a 5 wide. Pros is the 3k extra gross, cons is until I get an employee no week vacations for me. Ill be honest and every single location that ive gotten either by buying from someone or replacing a vendor I raised the prices alot. If ur sales pitch is good and u tell them straight up ull b fine. I usually tell them well the previous vendor wasnt making much profit hence why they couldnt offer better equipment like this or hence why they sold the business. Then I tell them if you look at walmart or colleges here a can is $1-$1.25 at. 75 you guys have a way better price than most places. You guus were used to the lower pricing but I pay sales tax, and have to do a big investment bringing you this equipment. Alsi my prices are still cheaper than the closest gas station. So why would ur employees want to take time off to get in their car, go through traffic, to overpay for the same product when they can step outside the hall and get it there. If theu r business owners theyll understand. Tell them 3 years ago I could get cans at 22 cents now I pay about 35-40 if im lucky ( including sales tax etc.) theres a million other things to say. Just be friendly and try to compare to things in their lifes. For example healthy sux. What I tell some is the way I make money is offering the best selection for tour employees. If theyd all want diet Coke and dried prunes id fill up the machines, but theres a reason why ur locap movie theatre doesnt sell UN buttered popcorn, salads, or granola bars.

What kind of account is this? Do you wish you had more machines? It appears the volume is too much for the current machines? This current account has like 3 or 4 soda machines? I always wondered why accounts did that? I mean is it because they might have 3rd party bottlers, or is the volume so much that they really need 3 soda machines, all of which have a different soda company on them? 

[hawksfan9325]

Win or lose, you will gain valuable experience. I you bid enough of these, you will find your "groove" and nail one sooner or later. My first big account changed everything for me. I had never even experienced a vending machine going empty in 3 weeks let alone 3 days. My wife walked in a 350 employee business, dropped off a flyer and nailed the account. They liked the idea of an ice cream machine and good service. Well, we ended up having to go there every morning a 6 am and service machines that were completely empty. They wouldn't let us add anymore machines, so we just rolled with it. Some weeks we were there twice a day. Once a week they would give every employee a free ice cream and pay us for the product and to hand them out at lunch time. The economy crunch hit them hard and they move their entire business from the west coast to the east coast. At first we were devastated. But then we found locations for all the equipment at smaller locations and ended up hardly noticing the difference in income.

 

The nice thing about many smaller accounts is that when one moves or closes, it's not the end of the world and they are not on most vending companies radar. In fact, it's just a small portion of your overall portfolio.

 

Also, when your are the lucky one that gets the big account, you have to realize that every vending company within 200 miles wants it. They will constantly bombard your account with reasons to not use you and switch to them. It's a vicious circle. Also, the company that is in there now will be right back in line to try to get the account back. Every time you service that account, you have to think just before you showed up, the boss was on the phone talking to another vending company. Always ask this, "What can I do to improve my service?" or "If you ever see something I can improve on, please tell me, I will be happy to accommodate you".

Yeah. I mean I think sometimes the big accounts are for "professional use only". It kind of does the account a disservice for a newbie to come in, and "learn as he goes". However, I have learned a TON, and there is no harm in meeting with the CEO, and seeing what opportunities we can find. She may know other CEO's too. Who knows. Your last paragraph is too real, lol. I agree, you come in, and immediately think, how can I improve this service, how can I stay ahead of the competition? What are my competitors doing to get ahead of me. Large accounts are insanely complex. I have never done one, and to think people say vending is easy. If they only knew..

[AZVendor]

Credit card readers are most economical (if that's possible) or most cost effective (that sounds better) if your vend prices are over $1.00.  The higher your prices the more useful the card reader becomes as customers don't always have enough cash for the higher priced items.  If you can do the glassfront beverage machine then you can put higher priced drinks in it that they haven't seen before (hence the higher prices).

 

If they have a central breakroom that the machines are in, then you only need two, maybe just one, soda machines and one snack.  I would then put card readers on both machines as an account this size should support them very well.  I think you'll be surprised how much of your vending revenue will be from the card readers.  Hopefully you won't have to duplicate the machines in another breakroom, because then you are diluting your revenue and the card readers become a double expense to use.

[TKK]

Card readers seem like a great idea, however I know it sounds stupid but all my current accounts I have them at a perfect service schedule, if I added card readers that would increase sales and mess up my schedule. For now I rather make a bit less and service less...once I get a full time employee then card readers will come...

[AZVendor]

Card readers will generally, at most, increase your sales by 20%, but that's on the high end.  If you don't want any kind of sales lift then you're crazy.  It's no different than if your account added more employees to create the same increased sales.  I think it's short sighted to not use card readers where they make sense as they can also save you time by converting some of your cash sales to card sales, leaving you less cash to count.

[TKK]

Well to top it off usat has been pretty crappy...ive called them a couple of Times and its always diferent stuff saying the g8s are discontinued and that id have to get g9s and theyve given me diferent pricing twice who cares about using your phone to pay I have.never seen that used here

[AZVendor]

I don't doubt that you've had trouble getting USAT people to be on the same page.  You do have to realize though that they have just recently discontinued the Edge and G8 readers and released the G9.  They're not forcing you to use the NFC capabilities they are just telling you that they exist in the card reader.  It only makes sense to have a reader that any customer can use, and if it's the only one they are selling then that's what you'd have to use. 

 

I'm not surprised that you've had different price quotes as they are constantly doing different promotions, extending them, etc., and they have different programs depending on how many readers you get, to further confuse the issue.  You need to take notes when you talk to them so you can keep all their offers straight. 

[TKK]

Some places could do very well w the card readers and not mess with my service schedule, and some would really mess it up. Like that place have to.fill every 3 days. W a card reader probably every 2 days. I rather not right now, I value my time as well...my buddy got a huge account 18 machined service twice a day. Makes 30-40k a month. He had to hire a guy full time to service.it every day. The guy quit and now hes servicing it, he cant even have a cook out without getting a call about filling it up

[AngryChris]

I would love to have that problem.

[hawksfan9325]

I guess it depends on whether the additional work involved with CC acceptance is worth it. There is the added revenue, and people mention it's typically in addition to cash sales, not replacing cash sales. I think it adds a sense of legitimacy to you're business. And shoot, if it doesn't work out, you could probably sell the CC units at least. I will definitely pitch them on CC readers for at least the glass front bottles. 

[mission vending]

I guess it depends on whether the additional work involved with CC acceptance is worth it. There is the added revenue, and people mention it's typically in addition to cash sales, not replacing cash sales. I think it adds a sense of legitimacy to you're business. And shoot, if it doesn't work out, you could probably sell the CC units at least. I will definitely pitch them on CC readers for at least the glass front bottles.

If the other guys are not offering it then it can play a significant role in separating you from the pack. Don't underestimate the benefit of simply securing the account by offering this upgrade.

[hawksfan9325]

If the other guys are not offering it then it can play a significant role in separating you from the pack. Don't underestimate the benefit of simply securing the account by offering this upgrade.

Hell yes. It's good that we can recognize little things that can give us HUGE leverage when it comes to selling an account. 

[allen watson]

I'm getting ready to add my first card reader to an AP 123 and a Vendo drink machine. Right now I am clueless to the whole enchilada. Any suggestions would be helpful. The machines are in a jammin' hotel that has been completely remodeled and is super busy every day. They bring people in by the bus load. I'm thinking that when people travel they tend to rely more on debit/credit cards than cash, so card readers seem to make sense in this situation. Recently the hotel put in an ATM machine and they said it dispenses $20 to $30K per month with a $3 fee. Maybe I'm in the wrong business?

[hawksfan9325]

I'm getting ready to add my first card reader to an AP 123 and a Vendo drink machine. Right now I am clueless to the whole enchilada. Any suggestions would be helpful. The machines are in a jammin' hotel that has been completely remodeled and is super busy every day. They bring people in by the bus load. I'm thinking that when people travel they tend to rely more on debit/credit cards than cash, so card readers seem to make sense in this situation. Recently the hotel put in an ATM machine and they said it dispenses $20 to $30K per month with a $3 fee. Maybe I'm in the wrong business?

That's a mad busy hotel. I would get on the card readers asap. This is what I know. Others can chime in..

 

1. Monthly maintenance fee per unit/machine $10-$13 a month

2. Per card transaction fee

3. Need upgraded MDB

4. Main company is USA Technologies 

5. I believe that the signal to transmit the transaction/POS, takes place through an existing cellphone network. Not quite "through the cloud" but sort of like wirelessly relying on decent cell tower coverage

6. Card Reader Units themselves are $350 or so

 

I am not 100% certain on this info, but it is what I have generally been told to believe.  How many machines does your hotel have? If you are pushing 8-10 machines, you may only want card readers on your top 3-4, and see how that works?