Loyalty is a two-way street
Both sides should promote the principle of brand loyalty
By Sevan Demirdogen -- Industrial Distribution, 9/1/1999
WITH ALL THE CONSOLIDATION OCCURRING throughout the industrial marketplace, it seems all too easy for past loyalties and commitments to be lost in the shuffle. In today's changing business climate, distributors and manufacturers alike must maintain the basic principles that have made them successful in the past.One of the primary reasons for our success has been the mutually beneficial association with industrial distribution. This partnership has grown stronger over time and we see no reason to change that strategy.
Our commitment to distributors remains as strong today as it did 45 years ago.
Even with the advent of the Internet and other channels some firms are trying to market through, we have stayed the course with industrial distributors for our core lines. We view and treat our distributors as business partners rather than customers.
Similarly, we believe distributors should view their suppliers as an integral part of their business rather than a simple commodity.
Our company first developed a network of independent distributors in the mid-1950s. With little more than a verbal agreement and a handshake, we partnered with regional distributors across the country. By then, demand for our core metal-filled epoxies and adhesives was increasing exponentially in industrial markets, and distributors needed little incentive to stock the product.
Our founder, Albert Morton Creighton, wanted these new distributor alliances to be as strong as the chemical bonds he manufactured. Subsequently, he took measures to ensure that the manufacturer-distributor ties would endure.
We worked closely with both end users and distributors to establish a viable, profitable sales structure. Our basic philosophy was simple: provide quality products and service through quality sales channels. The arrangement was mutually beneficial from the start, and this business strategy has been the cornerstone of our success in the marketplace.
We strongly encourage after-hours training in product knowledge for distributors, which enables them to identify and understand opportunities. We conduct "modular" training, concentrating on one product group or industry at a time. Rather than try to make them all experts, we emphasize training on increasing their ability to identify opportunities. We do as many joint calls as time permits to reinforce the training provided. This two-pronged approach increases the independence of the distributor field salespeople and their ability to sell our products.
Manufacturers invest considerable sums of money into building brand loyalty and creating a "need" for the products. The distributors are there to fulfill this need. The basic principle is at times lost due to the lure of integrated supply and the end user's ability to leverage purchases from the distributor. Non-commodity items cannot be treated as commodity items; someone has to identify the opportunity, specify a product, train the customer and provide the service. All these actions require an investment of resources and time. Leveraging purchases does not develop new business, it merely reduces the return on investment on existing business.
Distributors must continue to work with manufacturers to add value to the "value chain." Having the right brand available in stock at a reasonable price is a competitive advantage that distributors cannot take for granted.
The partnership distributors have with manufacturers is a two-way street: the role each party plays in the other's success is greatly dependent on loyalty, trust and mutual respect.
Sevan Demirdogen is general manager of ITW Devcon.
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