It seems to me that instead of the incessant chatter blaming or praising the economy as the reason sales and profits are up or down, not enough people are talking about the opportunities and trends presented by challenging times and specifically what they are doing about them.
Things have been really good for a very long time — and we haven’t had to work as hard to be successful. It almost seemed too easy. The present reality has us at a crossroads; waiting for the recovery to raise all ships isn’t prudent.
The economy is what it is, so the question is, what are you doing differently to secure your own future? The government isn’t the answer and never has been. Some companies will come out of this stronger, and some may not survive.
Wholesale distribution is a function and a vital link in the supply chain. Distribution connects manufacturers and end-users. Tough times propel both groups to focus on measuring the relevancy of their relationship.
The economy and its attendant consequences create fear and a reevaluation of the value proposition. When your key manufacturers start referring to you as a channel, ask yourself how important you are as one of the various channels they have chosen.
For example, the Internet is an increasingly important channel and opportunity. Many manufacturers adopted a policy that if your customer finds their websites through a Google search, they will accept the order direct, albeit at a higher price. That’s comforting!
Catalog houses are adept at using their online catalogs and leveraging the Internet as their channel to your customer; a virtual wholesaler. Manufacturers, of course, concede access to their A items to the catalog companies because they recognize them as a legitimate channel. Storeroom management services have become another channel due to end-users’ focus on transactional cost reductions.
The latter two channels usually possess zero product or application knowledge, but manufacturers have embraced them. Why? Are they afraid of losing business, or are they lacking confidence in their traditional partners’ ability to play in this emerging channel? A bit of both?
The bottom line is you must not surrender relevancy and your value proposition to be defined for you by watching things happen. Now is the time to reflect on ensuring that your role in distribution is in synch with your customers’ and key manufacturers’ needs.
Demonstrate Your Value
Customers and manufacturers are struggling with taking costs out of the supply chain and investing their energy effectively. How we communicate, share and work together to provide mutually advantageous solutions is the opportunity.
Distributors are closest to the customer. This grassroots connection offers huge strategic and logistical advantages. Inside and outside sales forces provide frequent and valuable relationship-building and networking among all levels of the customer’s purchasing, maintenance and engineering levels.
Your customers’ supply chain professionals will be the first to identify corporate priorities such as energy savings, carbon credits, electronic data exchange, vendor-managed inventory, transaction costs, LEED certification, environmental objectives, etc. These are the contacts most open to new ideas, better use of technology, new products and a closer partnership with a shorter list of suppliers and their manufacturer partners.
The economic slowdown will provide us with a time of reflection and opportunity.
It’s time to get close to your customers and key manufacturers. Find out how relevant you are to them. Any plan that gets you’re your customers and manufacturers talking to each other about solutions will generate positive results the next time mission-specific game plans need to be developed. Has your sales team adjusted to today’s market needs? Do they know what their job is?
Yesterday’s methodology won’t work. Downsizing and the trend of remote workers have resulted in a loss of contacts, and new people surely don’t have an archived memory of what you have done for their company in the past. Their goals may not be the same. Ignorance isn’t anyone’s friend.
The distribution function is where the focus must be. The stuff is important, but the function is the conduit; it needs to be emphasized, understood and valued or you are vulnerable.
The distribution function is the channel. Your marketing must validate and define why you are the best provider of this function. Your marketing game plan must reflect that you not only understand issues but also provide dramatic solutions. Do not operate in a vacuum. In addition to your customers and manufacturers, include other distributor allies that share common customers although providing different disciplines.
Industry organizations such as IMARK, Affiliated Distributors, the American Supply Association, et al., do a fantastic job of sharing best practices, networking and developing joint marketing plans for member manufacturers and distributors in each of their member disciplines: electrical, pipe-valves-fittings, industrial, plumbing and HVAC.
Imagine sitting down with key customers with these other suppliers and offering a forum to team up and help customers achieve their priority objectives relating to supply chain issues. Think how helpful this is to demonstrate the value added. Yes, especially in this economy! This beats the heck out of a bunch of salespeople showing up willy-nilly, dropping offline cards, and hoping to coincide with an unplanned need for each other.
In this economy, the opportunity is that customers everywhere are looking for the solutions we offer. Let’s make it easy for them to find us and they willingly will pay us for our ideas. If you are important to your manufacturers and customers — act like it! And do it before your competition does.