The strategy will focus on Paperlinx creating a "unified account management team" so that customers will have one point of contact for Howard Smith Paper Group, PaperCo and Robert Horne's outside sales force. The proposed changes will come into effect early next year.
To support the change, the company will also create a flatter management structure. Where in the past there was a divisional sales director for each merchant, in the future there will be one sales director and a sales operations director across the three. The company will also create a six-strong team dedicated to developing "new strategic customers", which will report to the sales director.
"I think that the vast majority of our customers will see that this makes sense, but if any say that they want to continue dealing with separate contacts then we will look at that sympathetically," said Paperlinx UK commercial director Ian Hunt.
The new strategy follows last week’s announcement that the company was looking to cut 370 jobs across its European operations, including 12.5% of its UK workforce. 200 UK staff are currently under a 30-day consultation.
Paperlinx employs around 1,600 staff across the UK, including 600 within The Delivery Co. Across its three commercial merchanting operations the company says it controls 50% of the market, generating around 75% of Paperlinx UK’s revenue.
As well as creating a single point of contact for customers, the initiative will quickly evolve into the three companies having a common product range and price list.
"Customers look at us now and say they don’t really get this. They know that they can phone Robert Horne and get one price and then phone Howard Smith and play one off against the other. We realise that we have to be price competitive with our rivals... ...but we don’t want to be played off against ourselves."
This latest move is a continuation of the initiative that led to the closure of Robert Horne’s seven remaining commercial print regional sales offices and the creation of a national customer service centre (CSC) last year.
However, Hunt stressed that there were no plans at this stage for further changes to the remaining network of 14 PaperCo and Howard Smith regional branches. He added that the outside sales changes would be supported by an undisclosed investment in training, infrastructure and technology, but he said the company had already invested heavily in CRM so that it already had a centralised customer database.
On the thorny subject of merging Howard Smith, PaperCo and Robert Horne into one merchanting brand, something Paperlinx has historically shied away from; Hunt said it was a possibility in the future.
"I think if you look at the reality of the marketplace then at some point in the future, whether it’s five or ten years then there will be one brand, but we have to get there in a way that our customers understand and buy in to," he said.
"It’s something that we are looking at, but we’re not going to rush into anything."
According to Hunt, of Paperlinx’s 6,000 commercial print customers, 80% of its revenue sat with customers that bought from more than one of its three operating companies. With around 700 customers buying from all three.
"[However,] 60% of our customers only buy from one of our operations. So, for a lot of our customers there won’t actually be much change."
Hunt said that the strategy would benefit customers in a number of ways, including them being able to make the most of Paperlinx’s two lines of credit for customers (one line of credit sits with Howard Smith and Robert Horne and another with PaperCo). It will also improve the efficiency of product delivery.
"Of course there was a sense of shock within the business when we announced the proposed changes and cuts. But I think people understand it. They recognise that while it’s going to be painful for the affected individuals, the upside is that they can see the benefits for Paperlinx insofar as changing our fortunes in the market place," said Hunt.
"In the past we’ve been so slow to respond to customer opportunities [because of the separate sales structures], what we’re doing is untying our sales teams' hands and allowing them to get out there and compete."
