Marketing - What Services Should Distributors Be Offering Today?

What Services Should Distributors Be Offering Today?

By Stan Rydzynski

The economy is terrible.
I need to reduce my cost of doing business.
I would like to offer new services to expand my business offerings.
My customers are requiring faster turnaround time on quotes.

Are these some of your issues? Would you like to know what other contractors are thinking?

Recently Channel Marketing Group conducted a national survey to determine what services distributors should offer to support contractors. The research report, entitled 2010 Contractor Insights, asked contractors throughout the country a number of questions about where they saw business opportunities and what they needed to help them be more successful. Over 200 contractors responded to the survey and we interviewed another 55 contractors.

Two of the areas we inquired about were “What services do/should distributors offer contractors?” and “What marketing services/tools do/should distributors offer to you?” We thought you’d be interested in your fellow contractors’ responses.

When asked “What services do/should distributors offer contractors?” in order of interest, contractors responded:

Recycling programs
File energy rebates for me and my customers
Tool rentals
Conduct Arc Flash training for me
Product Training
Provide staff product/application experts or engineers
Product Staging
Keep me updated on new products & market opportunities
Project layouts & takeoffs
Conduct lighting audits on our behalf
Sub assemblies & kitting
Storeroom/ job site management (for inventory management)
Conduct arc flash audits on our behalf
Conduct safety audits on your behalf

Do you know all of the services that your distributors can offer you? Are some of these on your list to help you grow your business? Is it time to ask your distributors if they offer all or some of them?

Additionally, we asked contractors, “What marketing services/tools do/should distributors offer you?” The results from highest to lowest for the top mentions were:

Online training
Long term volume discount (rebate) programs
Print / .PDF catalogs
Product training seminars
Business training seminars
Distributor frequent buyer program ( like the airline or credit card programs)
Bookmarks to your favorite products on their e-catalog
E-catalogs
Volume discounts for purchases in specific product categories
E-newsletters to keep you informed of new products, provide case studies and share other relevant information (i.e. pending supplier price increases)

And we asked, “What are the most important reasons for a contractor to consider purchasing from a distributor over the long term?” While this information has been printed in many industry magazines over the years, with the changes in the marketplace we sensed a change in purchasing decision-drivers. The answers with the highest ratings first were:

Price competitiveness
Ability to deliver material when requested
Invoice accuracy
Product availability
Order fill rate
Distributor salesperson relationship
The brands the distributor carries
Timeliness of receiving credit returned material
Access to credit
Project expediting service

The increased importance in price competitiveness, coupled with the decline in the influence of the distributor salesperson relationship was revealing. Historically, price is usually #3 or #4 in the decision criteria with relationship being higher. This tells us that relationships based upon socializing are giving way to relationships based upon performance. As a contractor, this then suggests that measuring a distributor’s performance could be an effective purchasing tool for you.

We hope this information will helps you either plan better or motivates you to ask your distributor (s) for services you require to succeed in your business. To purchase a copy of the 37 page report, go to www.Electricaltrends.com and click on Research Reports.

Stan Rydzynski, Executive V.P., Channel Marketing Group, has over 35 years of experience in marketing/sales/product excellence in the electrical industry. The Channel Marketing Group provides strategic planning, marketing planning and market research for contractors, manufacturers and distributors with a focus on growth initiatives to accelerate performance. If you have a marketing/strategic planning question, you can contact Stan for a FREE consult at srydzynski@channelmkt.com or 516-319-1191. In addition, Stan conducts a 2-3 hour marketing/planning contractor seminar covering basic marketing concepts as well as teaching how to write an effective contractor marketing plan. Contact your local IEC, NECA chapters and/or your local distributor to arrange for him to conduct his highly effective and informative seminars.