What about Ray? RHPs brand strategy

BY BOB MIODONSKI of CONTRACTORs staff RENO, NEV. When Alvin E. Scolari named his company Ray Heating Products and Superior Sheet Metal in 1950, he thought that the name would show his customers just how up-to-date his business was. Thats because, unlike many contracting companies, Ray was not named after its founder or a family member. Scolari named his new company after a cutting-edge product line

BY BOB MIODONSKI of CONTRACTOR’s staff

RENO, NEV. — When Alvin E. Scolari named his company Ray Heating Products and Superior Sheet Metal in 1950, he thought that the name would show his customers just how up-to-date his business was.

That’s because, unlike many contracting companies, Ray was not named after its founder or a family member. Scolari named his new company after a cutting-edge product line manufactured by Ray Burner Co. of Lancaster, Pa., and San Francisco.

“Ray was a very reliable product line of oil burners; it was new technology back then,” said Steve Scolari, president, CEO and Alvin’s son. “I don’t know if it even still exists.”

Times, customers and markets change. A name that had been chosen to demonstrate a company’s sophistication turned into a hindrance in recent years as the Reno market exploded and many of the contractor’s customers changed with it.

In fact, Ray Heating Products itself became RHP Mechanical Systems. During a strategic planning session in 1999, Steve Scolari and 10 of his top people decided that the new name better reflects the customer base that had grown beyond its residential roots to largely commercial and industrial accounts.

“Our old name was just a struggle because it didn’t complement the services we offer. Ray Heating made us sound like an out-of-the-back-of-the-truck firm,” Scolari said. “RHP Mechanical Systems is what we’re doing now. The name reflects our toolbox of services.”

Those services include HVAC, plumbing, hydronic and radiant heating, process piping, mechanical service, architectural sheet metal, building automation systems, mechanical system cleaning, design/build, professional engineering staff, and automated management and design service support. The company strives to be a single source for its customers, Scolari said.

The company maintains a fully automated sheet metal and pipe fabrication facility with more than 20,000 sq. ft. of fab shop and 25,000 sq. ft. of office and dry storage.

RHP employs 220 people including 165 commercial/industrial HVAC and piping tradesmen and four graduate mechanical engineers on staff. Its mechanical service division has a crew of 40 factory-trained techs. The company has more than 100 trucks in its fleet and does jobs within a 200-mile radius of Reno.

Today, residential new construction and service work comprises about 15% of RHP’s $27 million in annual revenue. That includes plumbing and radiant heating jobs on custom homes near Lake Tahoe, which actually are handled by the commercial division due to their size and complicated systems.

Nonresidential service makes up another 15%; architectural sheet metal and specialty fabrication account for 5%.

The remainder of the business is made up of commercial and industrial projects with 60% being design/build. The varied customer base includes hospitals, pharmaceutical companies, schools, hotels and resorts, restaurants, stadiums, bowling alleys, wine storage facilities, distribution centers, and, of course, casinos.

When Steve Scolari joined the 17-year-old company in 1967, Ray Heating Products was doing mostly residential, light commercial and school work. Favorable tax laws on stocking inventory turned Reno into a distribution hub for the Western United States. Legalized gambling meant a thriving market for casinos, which really took off in 1978 when MGM built what is now the Reno Hilton, Scolari said.

“It’s not that my dad didn’t do commercial, but he did mostly residential, which was very competitive,” he said. “Being a union contractor, opportunities came to us in the commercial and industrial markets.”

Over the years, an increasing number of out-of-town investors came into Reno in need of a mechanical contractor that could install complex systems, Scolari said. The Ray name often threw these potential customers because they thought that a company with a name like that might not be able to handle the job.

“We were constantly being questioned on our name: ‘Who’s Ray?’ ‘What happened to Ray?’ Some people referred to us as ‘Ray’s,’” Scolari said. “Our salespeople were struggling with it all the time. We finally said, let’s get rid of ‘Ray’s.’

“For the outside corporate user, RHP Mechanical Systems is more identifiable for what we do.”

Changing a company’s name, however, is not something that can be accomplished overnight. Redoing the lettering on 100 trucks as well as the signs on buildings, stationery and business cards are just part of the problem.

“Branding has been challenging because of the age of the company in residential service,” Scolari said. “Ray Heating Products was well-respected when we changed the name. Some of our older residential customers were confused when we changed and wondered if they’d get the same quality. That’s understandable because there’s trust in your heating and air conditioning guy.

“We answered the phone for two years, ‘RHP ... Ray Heating Products.’”

The name change four years ago was part of a long-term strategic plan, which also included modernization of facilities, the addition of plumbing and piping, revenue goals and training models for continuing education for people in the field.

“We’ve completed everything we set out to do,” Scolari said.

The next five-year plan, due out later this year, will address succession issues, new marketing tools, and adding more services to RHP’s toolbox for commercial and residential customers, he said.