“Like so many others we braced ourselves for the impact of the recession in the years after 2008 and we anticipated that both the existing and potential customers would start leaning towards brands with focus on costs and discount solutions – that’s what we see in many other businesses – so why not here?” Says Ole Munch, Managing Director of Borum Industri A/S one of the worlds leading suppliers of road marking equipment.
Prepare for a marathon – not a sprint
Most companies, independent of size and type of industry, were forced to consider how they could adapt to a situation that only few of them had any prior experience with. Borum Industri A/S was no exception. But despite the grim view, they chose to stand strong and prepare for the challenge. Ole Munch explains:
“Early on we made the decision never to compromise the quality standards that we have always valued as the keystone of Borum equipment, and with that decision we prepared for the expected downturn and increased competition from less expensive solutions”.
But the downturn never came – or at least not at all to the extend Borum had feared. Much to the amazement of the Danish-based company, the decision not to discard their values to allow for cost reductions showed to be just right in order to maintain a sound business throughout the crisis.
Low-cost may well end up being expensive
The customers seem to have become even more focused on factors that Borum consider to be key values.
This trend is supported by the story of one of Borum’s loyal customers; Faced with the recession, the Belgian company De Groote A & Zoon B.V.B.A did consider that increased competition and decline in demand could lower the cost of the equipment they needed when they looked around for suppliers of road marking equipment in 2012. But fairly quickly, they made the decision to place the economic criteria further down the list of requirements that needed to be met by a new supplier:
“Our greatest concern was that the equipment we purchased was reliable and stable. Weather and traffic conditions are defining the very limited timeframe of our effective working capacity. And buying cheap could end up meaning that we would be spending half the timeframe open for road marking on debugging, correcting and repairing - and that would be an expensive saving to make,” says Lieven De Groote, owner of the company.
The bottom line
Lieven De Groote explains that the cost of the road marking equipment itself is of less influence to the service he provides to his customers in Belgium. On the other hand there are a number of other factors, that directly rubs off on his performance; such as the reliability of the equipment and the possibility of it being developed and serviced in the future:
“What I need is a professional partner that enables me to deliver a durable, well-documented result within the agreed timeframe, not just next month but in the years to come. Experimenting with a less experienced supplier would be experimenting with my reputation towards my customers - and in the end with my bottom line. And I am really not willing to take on that experiment,” states the CEO.
Lieven De Groote explains, that though it is unwise to pay too much, it's worse to pay too little; and he ends by elaborating:
“When you pay too much, you lose a little money - nothing else. When you pay too little, you sometimes lose everything, because what you bought, was not able to do what it was bought to do. If you deal with the lowest bidder, it is wise to put something on top of the risk you run, and if you do, you can afford to pay for something better”.
Back in Denmark, Managing Director for Borum Industri A/S Ole Munch is pleased in the emerging signs of a less abashed economic situation for all. Though any market fluctuations in the future may very well be met with the same steadfastness that has proved right over the past years:
“We are very pleased that we were actually marking the road through the crisis for Borum and our customers by sticking to our believes of high-quality products,” he concludes.