By: Irwin Rapoport
Contractors And Distributors Depend On One Another For Survival: Contractors Know That Having A Good Distributor On Their Side Is Invaluable, While Distributors Know That Having Satisfied Clients Generates Loyalty And Repeat Business. Here, Distributors Discuss How They Are Playing Their Part To The Fullest.
1. Keeping Promises
The notion that a successful business is one that keeps its word isn’t new, but it is just as important as ever.
“This is important for everybody in every business capacity,” said Mike Romme, vice president of vendor relations and marketing at Stanion Wholsale Electric in Pratt, Kan. “Our customers need to be able to rely on what our people tell them.”
Romme noted that making deliveries when promised is critical to the distributor/contractor relationship: “If you tell a customer that an item or shipment is going to be somewhere at a certain time, it needs to be there. If you tell a customer you are going to call him back, you need to call him back.
“We ask all of our reps to under promise and over deliver,” he continued. Another important move, added Romme: “When you make a mistake or have a crisis—and it will happen utilize all of your resources to make it right with the customer as soon as possible.”
2. Selling More than Products
In an age of Internet shopping (think Google Shopping for Suppliers and Amazon Supply), it’s more critical than ever that electrical distributors bring more to the table than product.
Mike Carroll, national market manager, construction, for St. Louis-based Graybar, stressed the importance of creating opportunities for customers, rather than just focusing on selling products. “By using innovative and efficient ways to help customers order and manage their inventory, we can free up time for them to focus on their projects so they can be more profitable,” he said. “We utilize our extensive network of relationships with manufacturers to help them get products they want, rather than having them settle for limited items.
“Occasionally, we connect our customers to one another,” he added. “By working with a large number of customers and manufacturers, we can help bridge connections to create mutually beneficial business opportunities.”
3. Developing Well Trained and Educated Teams
A knowledgeable staff that is fully up to date on the latest technologies and product offerings will help to minimize both product and labor costs.
For example, Stanion Wholesale Electric works with many firms that bid on Department of Transportation projects and supplies the state of Kansas with parts and materials. This requires a staff with the expertise to help prepare successful bids for projects and year round maintenance services.
“Our quotes need to be on time and in the format that the customer expects; and our deliveries need to be on time, to the right place, and documented correctly,” said Romme. “It’s imperative that we meet all of these commitments because this type of work usually has an excessive amount of extraneous and rigid specifications. We need to be able to work through those requirements and make sure we’re covered and are specifying the right product that will fit in form and function.”
Contractors depend on Stanion’s professionals to help with bids for adherence to government rules and regulations and for contact with government officials. This also includes making additional suggestions to bids in terms of product substitutions.
Dan Gray, owner of Independent Electric Supply (IES) in Somerville, Mass., also stressed the importance of having a knowledgeable staff. IES currently has 72 employees—and essential skills include knowledge about products, putting together materials lists, and project managing jobs. In fact, several of IES’s staff started out as electricians and project managers.
“They’ve walked in the footsteps of our clients and it makes developing relationships a lot easier,” said Gray. “The criteria for employees depend on the position, but some of the basics are the ability to learn and a background in a wholesale type of business—not necessarily electrical, but a distribution business.”
4. Offering Design and Engineering Services
Design and engineering services can help with complex jobs to maximize purchases of supplies and minimize the amount of work time needed to complete the job.
Gray noted that demand for design and value-engineering services is growing and essential to provide. “It’s a differentiator,” said Gray, noting that IES has several key people who can design or redesign a building in ways that allow the end-user to maximize cost and energy savings.
“Feedback has been huge and contractors really appreciate the fact that they can break down a bill of materials and either add value or value engineer it down,” Gray said, referring to the skill of eliminating redundancies to lower the overall cost to the owner/operator.
While IES does not charge clients for engineering services, they are not offered to just anyone.
“We offer them to select customers,” said Gray. “We know that they benefit from these services and they come back to us because of it. This is a relationship-based service, and you need that trust before you can start offering this type of service.”
Dominick Cutrone is the owner of Manhattan Electrical Supply in Brooklyn, N.Y., and Carsten’s Electric Supply in Staten Island, N.Y. Also a former electrician and electrical engineer, he noted that a key service he offers is lighting design, which is greatly appreciated by small and medium-sized contractors.
“This means projects can be fully mapped in advance, which saves our clients time and money,” said Cutrone. “Value engineering definitely minimizes costs and we’ve reduced the cost of projects by nearly 30%, which enhances both our reputation and that of our contractors. They know we care about their bottom line and never let them down. Because they rely on us, we can rely on them.”
5. Helping to Meet Cost and Sustainability Goals
As facility managers are tasked with reducing not only overhead expenses, but also carbon footprints, distributors should be looking at ways they can help their contractor customers meet those goals.
Ryan Thompson, national market manager, PowerSmart, for Graybar, noted that his company’s PowerSmart program was developed to help do just that.
“This comprehensive solution increases our customers’ energy efficiency today and into the future while extending the life of their facilities and reducing maintenance costs,” said Thompson.
“Because each facility is unique and requires a customized combination of products and services to improve its energy efficiency, we work with our customers to perform individualized energy audits,” he continued. “We can then provide them with their solutions for improving energy efficiency and we can also help them navigate and utilize available utility rebate programs.”
Thompson also noted that sharing knowledge of energy-efficiency solutions for new construction and facility management is an important way to demonstrate value to customers.
6. Understanding and Anticipating Needs
By implementing measures and services to better anticipate the purchase of equipment and materials, distributors can go a long way toward a better understanding of the needs of individual clients.
Gray noted that IES does this by helping contractors with logistics and inventory. “This is a priority and no easy task, especially when contractors put forward a big list of materials for a job and want it at a specific price but can’t take all of it immediately,” he noted.
This is where the relationship between the distributor and the manufacturer benefits the contractor.
“With some manufacturers we can set up a series of releases so that the customer gets a portion on the first day [for a month or two] and then more as the job progresses,” said Gray. “We go to the contractor to learn what they will require, and we have the ability to manage the releases and ship them right to the jobsite. We certainly don’t want all this material sitting in our warehouse waiting for them to draw off it.”
Gray noted that not all manufacturers embrace this arrangement, however, so it must be done with those with which the distributor has very good trading practices. “This is something we’ve been doing for a long time and we’ve only just gotten proficient at it,” said Gray. “The bottom line is you need to perform and be willing to adapt and make changes to service your customers’ needs to be successful.”
Cutrone noted that storage space is expensive in the Greater New York City area and he does his best to provide equipment and materials when contractors need it. “By helping to engineer projects, we have sufficient lead time to source materials and arrange for ‘as needed’ deliveries whenever possible,” he explained. “This reduces the size of our inventory and has honed our abilities to secure materials and delivery options.”
He added that many contractors appreciate the heads up he provides on purchasing copper wire at optimum prices: “We let them know when they should stock up and we’ll hold it for them until needed. It all comes back to offering sought-after services and logically extending them to everything we do.”
7. Developing Solutions to Support Their Business Objectives
To help customers improve the safety and efficiency of their processes through e-commerce and ensure that contractors know they are valued clients regardless of the amount of their purchases, distributors should ask customers about their business objectives and help develop solutions to support those objectives.
“One of our slogans is ‘Listen, Connect, Deliver,’” said Dave Moeller, national market manager, institutional, for Graybar. “We listen to understand our customers’ needs and expectations and we respond with solutions that work and deliver on our word. We match our customers with quality products from leading manufacturers and provide value-added services to help them work smarter and more profitably. By providing services and solutions, we create long-term, valuable relationships with our customers.
“For example, I often work with hospitals, but I know that each hospital requires individualized service,” he continued. “Although the objectives are often similar, our team must strive to make the product, technology, and service solution address each customer’s requirements.”
8. Nurturing Relationships
Take the necessary steps to develop a relationship in which the contractor has absolute trust in his or her distributor partner.
It’s a given at Stanion that the customer needs to feel that the company is looking after his or her best interests.
“If you want to be the ‘A’ distributor for a contractor, this is critical,” said Romme, who pointed out that while all clients receive the same level of respect, levels of service vary based on the loyalty and commitment of the customer. “You are going to bend over backward a little further for the contractor who is buttering your bread, making you the first call every time.”
The ability to interact with contractors is also essential and includes understanding and anticipating needs.
“We’re very particular about who we bring into the ‘family business’; it has to be a good fit for not only the company, but also the employees,” said Gray. “Without a doubt, feedback from contractors is important, and that is something that comes from relationships.”
Romme also stressed the need to learn how clients want to be communicated with—whether telephone calls, text messages, emails, or a combination of all three.
“Some want somebody to talk to at 7 p.m. and some at 6 a.m.,” explained Romme. “The best thing you can do is learn how to meet their individual needs. We serve more then 1,000 contractors, and the primary role of our salespeople is to figure out how to develop those relationships. If a contractor prefers to speak during nonbusiness hours, the salespeople need to be willing to do that.”
“So much of business is relationship driven,” agreed Steve Blazer, president and co-owner of Blazer Electric Supply in Colorado Springs, Colo. “People want to do business with people they like and trust and feel have their best interests in mind.”
Blazer noted that this includes offering a variety of credit and payment extension plans for firms that are experiencing temporary cash flow issues and are in the midst of expansion.
“We’re more flexible with credit terms than some of our competitors,” said Blazer. “When we restarted the business [Steve Blazer and his brother, Mike, operated their company from 1984 to 1999 and reestablished it in2011], customers told us, ‘20 years ago when I first started in the business, you guys helped me through some difficult times; we appreciate that and we’re going to stick with you.’”
Blazer added that extending credit may affect short-term cash flow, but when dealing with established and profitable customers, doing so proves the axiom that most people remember a good deed which translates into contractors telling good stories about the distributor.
This was demonstrated in 2010 when Blazer’s customer Hamlin Electric, which was working on a project to upgrade most of the buildings at the U.S. Air Force Academy, needed to subcontract the work to Lenz Electric. Hamlin asked Lenz to continue purchasing material and parts from Blazer—a request that was granted.
“Although Lenz was already doing business with us, we weren’t its exclusive supplier,” said Blazer. “Hamlin told Lenz we are doing a pretty good job for them and now we are getting pretty much 100% of the purchases for this project.”
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