By Susan Tom
Almost lost between the state capital in Salem and the University of Oregon in Eugene is Lebanon, a small town of 12,000 people that to some would seem as forgettable as its neighbors are well known.
It’s here that Thomas Plinski, owner of Star Water Systems, grew up learning the values extolled regularly by politicians: Hard work, honesty and family.
These aren’t about living a rigid life, but rather one based on the principles of the first settlers to the southern Willamette Valley in the mid-1840s. These people hewed cabins from white oaks in the grassy flatlands adjacent to the Santiam River and used its sloughs to carve out a canal—often called a “ditch”—between Lebanon and Albany to transport goods. They hauled lumber, grew crops and established schools, churches and hospitals through harsh winters and lush summers alike.
More than a century later, the same pioneer spirit can be seen in this bedroom community of grass seed farmers, timber industry workers and service sector commuters that Plinski calls home. And it’s evident in Plinski, who proved something ivory tower academics forget: Customers don’t buy price or technology, they buy the person.
College dropout makes good
Ever since Plinski can remember, he has always worked. Whether it’s picking strawberries and beans on summer vacation or delivering newspapers in the cold rainy winters, Plinski credits his family for his strong work ethic. His dad had a small business repairing small electric motors. After several years of college at Oregon State University and Western Oregon University, Plinski realized he still hadn’t a clue as to what his life’s work should be. So he dropped out and went to work in construction a while before joining his dad’s business, Star Electric Motors.
He got married, started his own family and talked his father into adding water pumps to their line of products. When Dad, who was nearing retirement, didn’t want to expand that part of the business, Plinski took out his first and only bank loan (which he paid back within five years) and bought that piece from his father. Star Water Systems thus was born in 1977. “My education really started when I started my business,” admitted Plinski, 51.
From the beginning it was a one-man show. When he wasn’t juggling phones, doing installations, repairs and service work, or balancing the books, Plinski was flying around the country to every class and training opportunity offered by manufacturers and suppliers. Those early years were tough on his family. His wife Kathy put in long hours herself raising their two daughters; and later, when the girls were school age, she worked outside the house. Her paycheck allowed Plinski to reinvest every dollar earned back into the business.
School of hard knocks
Work was slow in the early 1980s. Oregon was in a recession, but improved later in the decade. It was during this economic rebound that Plinski expanded his staff to 11 employees, added hot tubs and opened a store in Corvallis. But high turnover and his unwillingness to delegate, he admits, doomed the enterprise. The Corvallis operation folded and since big retailers were undercutting him, he discontinued hot tub sales.
Plinski acknowledges he erred by expecting too much from employees without giving them any ownership. Today, he has five employees, including himself, his wife, daughter, son-in-law and a long-time employee.
“I decided to stay small so that I could have strong local control,” he said. “It’s a comfortable strategy.”
But Plinski took the hard lesson to heart and enrolled in a small business management program at Linn-Benton Community College. He attended classes twice a week and had his own on-site consultant through the Small Business Development Center there.“It was probably the best thing I’ve done in terms of my own business,” said Plinski, who had the service background but not a solid business foundation until then.
Since then, Plinski has developed a business style described as conservative. When he expanded the business into a new building in 1987, he did most of the construction in-house. He makes sure he doesn’t take on a project unless he has the money. All his equipment is in good repair; the office is paid off, as are the three service vans, one boon truck and a small backhoe.
‘Soft’ sell works
In an age of computer generated telemarketing calls, Star’s marketing system of referrals, word of mouth and repeat business seems old fashioned. But the “service-before-sales” approach of the business turns each installation, repair or service call into another advertising opportunity. It holds business hours Monday through Friday, with a half day on Saturdays, but the business is on call 24 hours for emergencies.
“We keep customer files, do regular service and, when they have the money, they buy,” he said. “We’ll get that customer.”
The company installs all products and tries to sell the customer on service and quality of product. “We’ll get one of every four people who call,” said Plinski proudly.
During the slow winter months, Star calls its customers to remind them that they’re due for a regular service check. “We have no service contracts, we have service contacts,” Plinski said.
Star also has strong roots in the community. A former school board member when his daughters were students, Plinski is a member of numerous local, state and industry associations, including the Lebanon Chamber of Commerce, Oregon Water Well Association, Oregon Board of Contractors, National Water Well Association and Water Quality Association.
He also sponsors youth and adult softball teams and walks into the local coffee shop at 6 a.m. each workday. “I’ve lived here for 45 years,” he said. “I know most customers by name.”
Plinski also has good working relationships with local businesses and industry suppliers. He has shared leads with another nearby business, Nugent Well Drilling, for about 20 years, and he still works with Star Electric Motors, now run by his brothers. Although Star keeps up to 50 pumps and 25 filtration systems in stock, the business gets deliveries almost on a daily basis being in such close proximity to Interstate 5.
Going beyond business
Star has a steady and strong customer base of 5,500 that includes Lebanon and Linn County residents within a 30-mile area. Thus, Plinski’s not too worried about the Wal-Mart across the street or the Culligan outlet in Albany, which lies about 12 miles to the northwest.
The business’s future is in equipment service rather than equipment sales, an area that giant retailers dominate. While Culligan focuses on sales and uses telemarketing, direct marketing and a host of other expensive measures, Star focuses on service and offers free water samples to build a rapport with customers that goes beyond business to friendship.
So what does Star fear if not competition? Figuring how to interpret and comply with state regulations and local requirements while trying to remain competitive with businesses that don’t is what poses the biggest challenge for Plinski. It’s not unusual to need several permits just to complete one job, he said, and the onslaught of consumer information sheets and notifications has become staggering.
Growth attribution
Plinksi has built a successful business catering to the entire range of homeowners in an industry where customers have traditionally been those who owned high end houses. He attributes the increased demand for water conditioning systems to environmental awareness, repeat businesses and population growth.
Oregon is a state that leads the nation in strict land use laws. The result: As more people moved into the Willamette Valley, the land supply dwindled, reducing the need for wells in rural areas. Lebanon is on municipal water, and the only complaint about city water is chlorine, a problem that’s easily solved with a carbon filter. Linn County uses well water that, except for some hydrogen sulfide, iron and a low pH, is generally considered pretty good. “I think sometimes water pollution is oversold,” Plinski said.
Star added water conditioning and filtration systems in 1981, selling the MacCLEAN line, and added WaterSoft products in 1988. That segment of the business grew at a nice 10 percent a year clip until the late 1980s and early 1990s, when it leveled off at 5 percent a year. Today, Star’s business is about 90 percent residential customers. Service accounts for 30 percent of his revenues, while sales make up about 70 percent. Star also installs 85 percent of the equipment it sells.
Family matters
No matter how strong the family, working day in and day out with them can be trying at times. But those times have been rare, largely because Plinski makes sure each family member has responsibilities in different areas.
Kathy, who joined the business 15 years ago, does the books and the office. Tedi, his daughter, started part-time five years ago, handling the accounting, water tests and the phones. Tedi’s husband, Jason Grizzle, works service, repair and installation jobs. All agree to leave work at the office and be professional while on the job.
Since Kathy trained Tedi on the job—the two work different days—both do things the same way and can easily cover for the other when necessary. Everyone is cross-trained so they can help out in a pinch.
Conclusion
While the fate of the industry may lie in constant pressure pumps and chlorine generators, according to Plinski, Star’s future lies in its roots: “We take care of the local business and take care of local calls the same day.”
He’s looking to slow down in about five years; but until then, make no mistake—when it comes to executive decisions about the business, he’s the boss. “I make the decisions, and when it’s time to transfer the business then I will let that person do it,” he said.
About the author
Susan Tom is a newspaper reporter at the Statesman Journal in Salem, Ore. She also has written for the Pensacola News Journal and Pensacola Magazine, both in Florida.
Star Water Systems Inc.
250 Market Street
Lebanon, Ore. 97355-2366
(541) 451-3298
Owner: Thomas and Kathy Plinski
Year founded: 1977
Annual sales: $600,000
Customer base: 5,500 accounts
Business: Mostly residential sales, installation, repair and service of water pumps, well pumps, water pressure tanks, and water conditioning systems.
Key to success: Strong service
Quotables: “We don’t have service contracts, we have service contacts.”—Thomas Plinski