We’ve got some new programs there that we have visibility to that have not yet hit the P&L, but that we expected some — a little bit of the choppiness there on the top line, and that doesn’t bother us at all. And another thing that I mentioned is that part of the tension that we’ve had, we’re trying to drive EBITDA margin and EBITDA, the profitability and then just even like salesforce productivity with Lawson has been trying to make sure that we’re focused on profitable, good revenue growth as opposed to — so we’ve had to be disciplined about either walking some customers, as I alluded to earlier and being disciplined around pricing that in a more robust economic backdrop would be kind of blended or buried. But in an environment where you’ve got some choppiness that is coming through in different end markets, it probably leaves us a little bit more to have to explain when we walk away from a customer and takes a little bit more of a test and measurement decrease in top line, but with the objective of having more discipline around margins and pricing and ultimately our EBITDA objectives that we put out there.
So.
Kevin Steinke: Great. That’s all really good color and sight. I appreciate that. The performance in the Lawson business was impressive as you noted with the 18% increase in sales rep productivity. So as I look back about 18 months ago, it looks like the salesforce headcount is down a bit, but as you noted, productivity up significantly. So maybe you can just refresh us or walk us through the steps that you’ve taken to really drive productivity in there and how that’s been playing out for you?
Bryan King: I’d love to answer that question, because I get excited about it, but Ron lives it every day. Since he’s been at Lawson overall these years. So Ron, why don’t you jump in on it first, and then I’ll follow up even though it’s a topic we enjoy.
Ron Knutson: Yeah. For sure. So yeah, Kevin, you’ve tracked for quite a few years, what we’ve been doing on the sales side and the field sales reps in terms of productivity. And to your point, I mean we’re really pleased with the progress that we’ve been able to achieve at Lawson going from kind of high single digit EBITDA to now pretty steady 13% to 14% range. But as we think about the field sales reps for us, we are clearly making investments into those team members, and they are a critical, critical piece of our overall success and bang it out every single day in terms of visiting our customers. And so when we — what we really have tried to do is to really supplement and provide them some additional resources. For example, we’re investing in a much more sophisticated CRM tool that will be rolled out here in the first quarter.
We have built up some support roles, anywhere from service reps to inside sales reps as well in order to be able to expand our channel, selling channels. And for us, it’s all about really trying to be able to help them become more productive and provide them a more defined territory and a more repeatable type of revenue. So you’re right. Headcount — field headcount is down versus where we were a year ago. And it’s not so much a headcount number for us that’s important. It’s really more about finding those territories that are really, really — can be really, really successful in providing our sales reps the customers and the leads that allow them to be successful and ultimately make more commission dollars as well. So I would say that 18% growth is a combination of a lot of effort over the last months to help redefine some of the territories, provide some new revenue avenues.
Strategic accounts, we’ve talked about that a little bit in the past, continue to have really strong growth in that piece of our business, very sticky customers and really bring to the sales rep kind of a sweet spot in terms of the size of the location that they can service day-in and day-out and service them very well. So anyway, so I’ll pause there. But yeah, we’re really excited about the productivity side and certainly expanding our channel reach out to our customers as well.
Bryan King: Just because it’s a favorite topic for us to really dig into, Kevin, to add to Ron’s comments. There was a decision this year to make a significant investment in additional resources to support the outside salesforce. And if we go back and use kind of the lens of history, many of us were conditioned over the last eight or so years, 10 years that I’ve been involved in Lawson, that we really needed to grow our outside kind of street sellers or street salesforce to try and grow revenue, to try and get leverage through their efforts at the street level, which really required more feet on the street to get the EBITDA margins to start moving our direction and lifting. And I think that our lens has evolved and there’s — what we’ve learned is that, one, we think that there’s a lot of efficiency gains that we can help our salesforce with by giving them more tools and more support resources back in the home office and even in some cases, more support resources at the customer location.
So it support technician that’s there to help them refill the bins to go buy so that the salesperson can be looking for ways to grow revenue or to call on more customers or — and to really serve the customer better, where we’ve identified that there’s a growth opportunity with the customer versus the amount of time that maybe our salesforce was spending with some of the customers that were harder to grow or resetting the bins and organizing the parts on site. The support on the technical side I mean, we’ve added technical experts back and we’re going to add some more back at the home office so that there’s more technical expertise that the field sales force can lean on. And there’s ultimately an objective of significantly slow down what the historic turnover had been with the Lawson field salesforce.
And so the productivity is a result of having our sellers have more time to look for revenue growth opportunities. Over the last year, our strategic accounts revenue growth is up over 20% year-over-year. I think it’s 23% right, Ron?
Ron Knutson: Yeah.
Bryan King: And so that part of our business obviously has been where our funnel, our pipeline that has been helped some by being part of DSG and a very focused approach to trying to sell to some of those larger accounts where we can grow with them has been a priority. The street business, the smaller accounts, which have been largely flat or slightly down, I think down 1% or thereabouts. It has been an area where we’ve tried to drive sensitivity out of our salespeople in terms of how they are — how much time they are spending at a site and making sure that they’re hunting to try and grow their revenue, because we want them to make more money. We think that their compensation or the opportunity that they’ve got to drive their compensation higher through being more efficient and growing their productivity and us helping them on that and then us looking at ways to make sure that they can be rewarded more by their productivity growth is going to slow down that turnover.
