March 5th, 2020

Understanding Berkshire Hathaway

The White Whale of Enterprise Accounts & ABM

Since I first carried a quota, the white whale in enterprise technology sales has always been Berkshire Hathaway

89 year-old CEO Warren Buffett is known as one of the greatest investors in the world. By sticking to his core principles of profit and people, he has built a diverse portfolio of businesses that last week announced $254 billion in revenue for fiscal year 2019. In a Fortune 5 company like this, there is a lot of investment being made in IT and improving business processes. Unfortunately for sales and marketing professionals, Berkshire Hathaway has always been a quest of epic proportions. 

Berkshire Hathaway is a highly decentralized organization with under 30 employees in their small central office in Omaha, Nebraska. So your strategy needs to be to market directly to each individual organization - and there are many. So to get your ABM and strategic account marketing plan in place, let's take a look at ten things you might not know about Buffett's many companies: 

  1. By employee count, the largest companies in the portfolio include BNSF Railway (45,000 employees), GEICO (40,000 employees), and Fruit of the Loom (32,500).  Fruit of the Loom's #3 spot may be "brief" however, as Precision Castparts Corp (PCC) is right behind at 30,000 employees and growing fast.  
  2. Their largest company by annual revenue is McLane Company with over $49 Billion in annual sales.  McLane provides distribution services to convenience stores and retailers, with their largest customer is Walmart who makes up 22% of sales.
  3. Maryland-based insurance giant GEICO is also near the top with $26 Billion in annual revenue, executing a successful direct-sales model in 39 states. GEICO (Government Employees Insurance Company) has over 40,000 employees, and one well known lizard.
  4. Looking to decorate your home? Berkshire is the owner of four major home furnishing retailers; Nebraska Furniture Mart (NFM), Star Furniture Company, Jordan's Furniture and R.C. Willey. Collectively, this group boasts over 30 locations and almost 5 million square feet of retail space.  
  5. Berkshire Hathaway generates about $20 Billion in revenues from their building products portfolio. Brand name firms like Benjamin Moore, Clayton Homes, Acme Brick and Shaw Industries generate strong returns in both the residential and commercial construction industries.
  6. People often wonder how Buffett gets all his energy? It might be from Pacificorp, the regulated utility company he owns that serves almost 2 million customers in the Pacific northwest. Pacificorp does almost $5 Billion in annual revenue, operating over 17,000 high voltage transmission lines. Perhaps Buffett runs on batteries? Duracell has $2.8 Billion in revenue and over 3,000 employees from Bethel, Connecticut.  
  7. Like the outdoors? Check out Forest River, one of the largest manufacturers of RVs and pontoon boats who own a 33% market share in this industry generating $4 Billion in annual sales.
  8. Looking to move? Call HomeServices of America! Buffett oversees over 370 franchises across the world with over 50,000 real estate agents selling Berkshire Hathaway mortgage, insurance and relocation services.
  9. Beep Beep. Berkshire Hathaway Auto Group is one of the largest dealership groups in the country with 85 locations across 10 states.  Or if you prefer to fly, try NetJets - their 6,000 employees are ready to offer you affordable shared ownership in a Cessna plane. Treat yourself!
  10. IMC Group has over 13,000 employees in 130 subsidiaries around the world, ready to provide you with precision carbide metalworking tools - maybe as a last minute fathers day gift? 

Although Buffett handles significant capital allocation and investment activities, your sales success with Berkshire Hathaway will happen at each individual operating company. Take the time to learn about each portfolio company's top priorities and goals, which are very unique to the diverse sectors they participate in. The secret is not having one ABM message for Berkshire Hathaway, but perhaps dozens of ABM strategies to align your solutions with their top imperatives. Good luck chasing the whale!

 “It is not down on any map; true places never are.”
― Herman Melville, Moby Dick

PipelineIQ is a boutique ABM research firm dedicated to helping enterprise sales and marketing teams at large technology companies sell more strategically to challenging prospects. Contact us at sales@pipelineIQ.com or Request Info Form to learn more.