04/09/2012

Leadership Q&A: Richard Freeh, President & COO, RG Group

FPDA In Motion recently spoke with Richard Freeh, president & COO of RG Group about his company, opportunities for growth and the value of FPDA. Freeh is the FPDA Convention Chair.

FPDA: How would you describe RG Group and what services and products does it provide?

Richard Freeh: We're a privately held company headquartered in York, PA. We're in two businesses, as I like to tell customers. We're in the motion and control business, and we're in the fluid handling and process business. The motion control business is hydraulics, pneumatics and electro-mechanical. The fluid processing and handling is more about connection filtration, measurement and control devices. We've been in business since roughly 1955 and providing distribution services for major manufacturers for well over 50 years.

Let me talk about our business model. We're trying to move from a component-based business model to more of a service-based business model. We think that in today's environment customers have many choices, so it's truly not about the product anymore. It's about how you deliver the product and the services you wrap around that product. We're focused on providing that end customer with a great customer experience.

FPDA: What are the company's main markets?

Freeh: We do everything from hydraulics to automation and instrumentation. Our markets are very diverse. The key ones for us today are PowerGen, energy extraction — because we sit on Marcellus shale — food and beverage, commercial marine applications, defense markets and semiconductors. There are a fair amount of OEMs we supply products to.

FPDA: Can you talk more about how the company is working to provide great customer service?

Freeh: We call it staying focused on the customer experience. What we're doing is multi-faceted, but it begins with the way we're structured. We have a retail and wholesale side of the business. We have 11 mini-branches customers can walk into and have an on-demand solution. With the wholesale side, we stay focused on customer service by doing internal and external surveys. Every month we talk to our customers and rate ourselves. If we're not close to 100 percent on the customer experience, we go back and ask our customers: "What was it like doing business with the RG Group, and would you do it again?" We're very focused on customer retention.

FPDA: How was this year for RG Group?

Freeh: Our fiscal year ends in July, so we're three-quarters of the way through. Our plan was double-digit growth and we're exceeding that number now. I'm a little nervous about what the next year will bring, but business is strong now.

FPDA: Can you share the company's long-term plans?

Freeh: We have a five-year strategic plan we update every year. The key thing for us is acquisitions. We closed an acquisition in February of a company in central Pennsylvania called Weaver Fluid Power. We will continue to open mini-branch locations. We feel like having a footprint in the local environment is important especially for the MRO business. Ultimately, our focus is on those end-markets we think are here to stay — that will not be offshored. We're also focused on increasing value for our customers. We're doing that by moving up the value chain and getting away from component-based sales to more of a subsystem or an engineered system. We have a manufacturing business that takes off-the-shelf components and turns them into one-of-a-kind solutions. That's a big part of our strategy.

FPDA: How did you get into the industry?

Freeh: I was a professional musician — a drummer — and when I decided I couldn't make a living doing that, I got serious and went back into my first profession, which was sales. I've been in the industry for about 32 years. I've been with the RG Group for over 25 years. I've found a home here. I'm pretty excited about what we do and the culture here is great.

FPDA: Why did you join FPDA and what benefits have you gained from membership?

Freeh: We've been an FPDA member for about 15 years and I've been attending FPDA meetings for over 10 years. I believe the FPDA’s role is to facilitate those shared areas of challenges and opportunities so that individual companies and members don't have to go it alone. I found it to be a great pleasure to not only learn but make friends.

FPDA: What future goals would you like to see FPDA achieve?

Freeh: I'm working with the FPDA task force on trying to improve the metrics process. We are also working with other associations to continue to improve the benchmarking process. FPDA is one of the few places you can go and really get that type of information and have it be accurate, meaningful and actionable. I'm on the board of directors now and it's my third year. It's been a great experience.