by tradesmeninsights | Jun 9, 2015 | Marketing Tips
By John Sonnhalter, Rainmaker Journeyman, Sonnhalter
Long before Grainger, Fastenal, Home Depot and the thing they call the Internet, the local industrial distributor was the backbone to local manufacturers and businesses. My, how things have changed over the past several decades.
I believe the small guy still has a chance to compete on a local level, but they need to change the way they do things. They need to know what their value proposition is, and most importantly, know their customers and what they want.
Source: Industrial Distribution magazine
If they can’t add value, then what’s the point? At the recent ISA Convention in Cleveland, one of the breakout sessions, “Looking Ahead at Distribution: The Future Impact of Size and Value Content 2015,” revealed some interesting issues. Mike Hockett, Associate Editor of Industrial Distribution magazine, did a good job summarizing both the results of the study, as well as the subsequent panel discussion.
Here are some highlights:
- Service sales represented only 5% of their total sales.
- Buying groups represented the best support.
- Manufacturers relied on small local distributors for customer loyalty and technical expertise.
It’s no surprise that cutting tools and abrasives remain the top two product categories that industrial distributors sell. Both require technical knowledge to support and troubleshoot problems. The question is, are the distributors going to charge for this expertise and are their customers going to be willing to pay for it?
So what do smaller industrial distributors need to do to stay in the game? Here are some thoughts:
- Embrace Technology – get an online sell site, integrated supply services and electronic billing for customers to order easily.
- Value Proposition – need to define so they can focus on the things that matter most and where they make their money.
- Buying Groups – need to get in one or more so you can stay competitive and make more money.
- Technical/Engineering Expertise – set yourself apart from the pack.
What others can you add to the list?
If you like this post, you might want to read:
Are Independent Distributors Helping Amazon Succeed?
Manufacturers: Tips on Getting More of Your Distributors Time.
by tradesmeninsights | Feb 18, 2015 | Uncategorized
I recently read an article in Industrial Distribution Magazine by Justin Roff-Marsh that basically said that the industrial distributor field salesman, as we know it, is DOA.
I don’t know what planet he was born on, but it wasn’t this one! If he was, he would realize that to survive against the big national brands, they must have a unique selling proposition and a strong brand promise.
Granted, if you’re a general line house, your survival rate isn’t good. But most distributors today focus on either a market (Electrical, Plumbing, Construction, etc.) or in specific disciplines like power transmission, cutting tools or industrial hose and fittings. They become experts in that field and customers depend on them for not only product, but advice. This is how they can compete with the Biggies like Grainger and Fastenal.
Speaking of the big boys, who’s going to tell them to stop opening more brick and mortar stores and by all means don’t hire any salesmen!
If this guy did his homework, he’d know that in these models, a lot of their customers come to them. I bet he’d be surprised if he were to walk into a STAFDA, electrical or plumbing wholesaler between 6:30 and 9 any morning, that he’d have a pretty good chance of being run over by customers picking up stuff. And they’re not just picking up an order, they’re talking with counter people on how to solve a particular problem. What’s that worth?
Granted, the role of field salesman has changed over the years, and I don’t expect anyone makes cold calls anymore. But the seasoned field salesman is worth his weight in gold. He’s aware of his surroundings as he walks through a plant or construction site identifying opportunities for new sales. You can’t do that on a phone call or an email.
Years ago, I was making a sales call with a salesman who was called into a customer who was having some production problems with cutting tools. I was amazed as this salesman walked onto the shop floor and walked directly to the CNC machine that they were having trouble with (without even being told ) by just listening to the sound of the machine. He suggested a few adjustments to the feeds and speeds and the problem was solved. The point is, they don’t teach that in college or anywhere else. It comes from experience.
I guess the point I’m trying to make is people still like to buy from other people. If you have value and can help them do their job better, you can bet they’ll make time for you. Look at independent buying groups like Affiliated Distributors or NetPlus Alliance. Each year, they post strong sales growth despite the growing competition. I’ll bet field salesman come into that equation somewhere.
by tradesmeninsights | May 13, 2014 | Marketing Trends, Social Marketing, Traditional Marketing
Interesting question, isn’t it? Back when I started in the ad business (back in the stone ages), the full line catalog was not only your bible, but one of your largest marketing expenses. It would take months to develop, and as soon as it was printed, some items were either added or deleted from the line thus making the catalog obsolete. Sound familiar?
Of course the web changes all that, and with the advent of databases, it’s easy to keep your catalog current and for users to search for the products they need. I’d say that over the years, as companies added a digital catalog, print runs started to decrease on average of 25-30%.
Recently though (last 7-10 years), printed catalogs have been declining even more. Think of all the trees we’ve saved and the number of printers we’ve put out of business.
I recently read an article in Industrial Distribution magazine’s online edition that cited a study done by United Stationers that shows that end users preferences have changed to online.
Now you may ask what does a study by an office products company have to do with the industrial and construction market. Well let’s not forget that they also own ORS NASCO in the industrial sector and Lagasse Sweet in the Jan/San sector. I have to believe the office products trends are not so much different from the markets we play in.
The study also showed that smaller, more single-category-focused printed pieces are on the rise.
Contractors and MRO professionals – they are/were still apprehensive about giving up printed material. I think that’s changing a bit. Let me clarify my statement.
Yes, the old timers (55 and older) probably prefer a printed book. But you might be surprised, at even that age group, they want current info and aren’t afraid to go on the Internet to at least find something. Let’s face it, you don’t have to be a rocket scientist to use Google.
Now distribution might be another story. Countermen, for sure, prefer the printed piece for day-to-day inquiries. If you don’t believe me, next time you’re in a distributor look at some of them.
Most of these contractors not only have access to computers, but have tablets and smart phones on job sites where they can access info immediately. So I’d feel safe in saying that most of us have some sort of online presence.
So if you buy into my premise, here are a few things you can do:
- Create a digital strategy and fund it with the money you save from not printing all those full line catalogs.
- Create single category pieces whether they are product or market focused.
- Create good meaningful direct mail pieces that will inform and inspire your target audiences.
Do I think the print catalog is dead? No, but it’s on its last legs.
What are your thoughts?
