Maytag enters appliance repair business
Thursday, November 6th 2003, 12:00 am
By: News On 6
DES MOINES, Iowa (AP) _ When any of Susan Podgorski's appliances break, she calls just one repair service _ she has a contract with Sears to fix all her appliances, including the Maytag refrigerator she bought three years ago.
But Maytag Corp. is betting that customers like Podgorski who have confidence in the company's appliances will learn to trust its repair workers to fix other brands too. Maytag announced in August plans to create a new repair division that, like Sears, will provide service technicians to work on home appliances of any major brand.
The company that has capitalized off its ``lonely Maytag repairman'' ads for decades wants to increase business for its actual repair workers.
``What they want to do is capitalize on what is an extremely well-known name, that is the Maytag repairman, and use that tremendous goodwill and brand name recognition to likewise service and repair other people's stuff,'' said Anthony Sabino, associate business professor at the Peter J. Tobin Business School at St. John's University in New York.
It may take time for some customers to accept the idea. Podgorski said she has confidence in the Sears repair service but is unsure whether a Maytag repairman could fix a General Electric appliance.
``Sears I think of as an overall place with all different types,'' she said. ``For Maytag it's one brand name fixing another brand. That would be my question _ would they know the other products.''
Maytag decided to expand its repair business after market studies showed a lack of trained technicians to care for what are increasingly complex appliances.
``We had seen indications that the historical service base was eroding,'' said Steve Benton, a Maytag vice president and general manager of Maytag Services. ``Technicians were aging and leaving the industry and there wasn't sufficient activity in the industry to bring new talent in.''
He said they found consumers were being underserved.
The market studies also indicated that consumers had confidence in the Maytag brand.
Maytag is looking to the repair division to bring in new revenue. The company has seen sales soften in some parts of its business amid a highly competitive home appliance market.
``Everyone is trying very hard to wring out costs and to basically make some kind of profit let alone prosper,'' Sabino said. ``Maytag is seeking to expand its line of business and its bottom line profit-wise by going into what could be the very lucrative area of service.''
The company is launching the division in the Washington, D.C., area because it had a sizable number of repair workers there with experience handling other brands. The idea worked and it was expanded to Baltimore, some Virginia markets and into Boston, Benton said.
A few months ago, Maytag workers in Atlanta and some Florida cities began servicing other brands.
``In the past year there have been some early indicators of success,'' Benton said. ``It's too early to project a date when we would, or would not, roll it out nationally.''
Sears began its repair service the 1980s. Its product repair services group, which made 14.5 million service calls last year, brought in $2.2 billion of the company's $41 billion revenue, said spokesman Bill Masterson. That included sales of parts and installation of heating and air conditioning products.
The need for more technicians is increasing as consumers move to more sophisticated appliances loaded with features and find less time for repair calls in their busy schedules.
``Time is of the utmost importance. Meeting the customer's expectations is more than fixing the appliance but being there when they want us there,'' said Mark Good, general manager of Sears Product Repair Services group.
Benton said Maytag intends to invest significant resources into hiring and training technicians and support staff and ``obtaining the necessary technology to run the best-in-class services business.''
The pilot projects are using Maytag employees but Benton said in some markets the company may enter contracts with independent technicians to do repairs.
Dennis Anderson, director of the Center for Manufacturing Excellence, a service technician training center at Carl Sandburg College in Galesburg, Ill., said the new service division could help take some of the sting out of the increasing number of factory layoffs.
He said he's seen many former factory workers register for courses to be certified as repair technicians.
``They understand that service is big,'' he said. ``Assembly lines are diminishing, the shop floors are getting smaller and they're anticipating retraining themselves to hopefully get jobs in other markets.''