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Each issue of CMO Close-up features an interview with a CMO, as well as other marketing executives answering that issue's "Big Question."
This week's feature:
Close-up with Laura Howard, CMO, ECI Telecom
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A new market out of thin air
Airgas' campaign for Reklaim program creates fresh sales opportunities
Christopher Hosford
Story posted: April 6, 2009 - 6:01 am EDT
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Finding sales opportunities where none previously existed is an art, but not a magical one—it involves producing a product efficiently and economically, and marketing it compellingly.
For Airgas Specialty Products, the country's largest distributor of industrial, medical and specialty gases, the introduction of its new Reklaim refrigerant recycling initiative a year ago also required overturning entrenched industry norms.
Airgas saw an opportunity in collecting, cleaning and reselling R-22 refrigerant gas, which had been used in many older refrigeration systems. These systems will gradually lose their supply of new refrigerant when the production of R-22 is phased out beginning next year due to its impact on atmospheric ozone.
But recycled R-22 will remain legal. In response, Airgas, in conjunction with Atlanta-based MLT Creative, fashioned the Reklaim brand to resell used R-22 gas collected through a new network of wholesalers.
“There are hundreds of thousands of dollars worth of capital equipment out there using R-22,” said Jodi Crawford, business development manager at Airgas. “And R-22 makes up 80% of the refrigerant in the U.S. We have 15 years of R-22 in front of us even as the production of new gas declines.”
Of Airgas' marketing plan for the used R-22 gas, Crawford said, “The economy couldn't converge better for Reklaim. As R-22 gets scarcer, the price will increase.”
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CREATING SUPPLY, DEMAND
Airgas' essential challenge was to change the way the gas recycling business worked. Following the repair of units, mechanical contractors usually have to pay a fee to return used gas to wholesalers. That disincentive often results in the illegal release of refrigerant gas into the atmosphere.
In contrast, Airgas' Reklaim initiative pays mechanical contractors for returning the gas to wholesale supply houses. Airgas then buys back the used gas, cleans it and sells it again in turn to wholesalers, who can sell it to the mechanical contractors at cheaper-than-new prices.
The marketing campaign was intended to persuade mechanical contractors to return used gas (a necessity for creating product supply) as well as to sign up a network of wholesale supply houses to serve as collection and resale points.
The program included direct mail outreach to mechanical contractors and print ads in an industry publication, “Air Conditioning, Heating & Refrigeration News,” read by both mechanical contractors and wholesale supply house owners. The program also placed at wholesale locations such point-of-purchase materials as counter mats, easel backs and posters, encouraging the AC repair people to bring in (and be paid for) old gas.
“We were stuck with a dilemma,” said Vann Morris, account executive with MLT. “We had to get mechanical contractors to return used gas to a Reklaim location, but we had no locations to accept the gas.”
The print campaign also encouraged wholesale supply houses to participate in the program, which would provide them with a continuing supply of product to sell as the production of new R-22 is phased out.
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PLACING ADS NEAR WHOLESALERS
Morris said the program's direct mail component targeted mechanical contractors within 50 miles of likely wholesale supply houses. Promotional notepads with pressure and temperature charts also were distributed to the contractors, and the message was carried as well to appropriate trade shows.
Meanwhile, the marketing carried an explicitly green message.
“The goal of the Reklaim was to create a reputable brand that says, first, that Airgas will lead the industry in incentivizing people to do business with us,” said Crawford. “And second, that we'll handle the R-22 in the right way.”
A year after it was rolled out, Airgas' Reklaim brand boasts impressive results. From zero collection centers, the company has signed up more than 250 wholesale supply houses to serve as recycling conduits. Further, the company has increased profits in its gas recycling business by 15%, according to Crawford.
“We changed how we went to market, to grow the market,” she said. “We have enjoyed significantly positive ROI and continue to invest in it.” M
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