When the going gets tough, the tough get going," looks to be the motto for fastener distributors striving to maintain market share and even growth through the current economic slump. To do it, they're beefing up sales forces, cranking up cold calling programs, enticing current customers to place larger orders and doing everything they can to add value to every order.

Curious about how fastener distributors are attracting new customers and growing in this challenging economy, Industrial Distribution spoke with several fastener distributors to find out exactly how they're doing it. Some of their strategies were already part of their companies' long-range growth plans, although most were created in response to shifting customer bases and the current economy. Here's a look at some of the best strategies fastener distributors are using right now:

President

Hub City Industrial Supply, Lake City, Fla.

Last year, we saw 5 percent growth and this year we're at about 10 to 12 percent, despite the fact that we haven't seen any improvements in the economy in the last 18 months. To do it, we've hit the streets hard in search of new markets. We're making cold calls, putting more salespeople in the field and sending regular surveys to customers to find out how we can improve and win more of their business. Just last week we sent a survey to 300 customers and have already received 100 responses back. In the surveys, we ask: how is the outside sales rep performing? How is the inside salesman performing? How is our shipping and fill rate? Are questions answered quickly? We then use the responses to make changes in our business processes — sometimes immediately. For example, we recently switched to faxing invoices and found out from a survey that a few customers didn't like it. For them, we instantly went back to mailing invoices. We have sales reps that are out there beating the bushes every day, and it might take them three years to get that new customer. The last thing we want to do is lose them once we get them, because then they might never get them back. Another way we're finding new markets is through membership in groups like Industrial Buyers Consortium, which has led us to new markets. Soon, IBC will be going after national accounts in the industrial market, and we're looking forward to being a part of that. That could be big stuff.

President

ProFast Supply, Inc.

Orlando, Fla.

We've seen our business become much more price-sensitive in the last two to three years as prices have eroded. Because our primary focus is on the housing market — a sector that's remained strong — we haven't been hit as hard as some other distributors. However, we've still had to use creative strategies to keep growing. For example, we constantly try to "drill down" and sell more to our existing customer base. It's more economical than going out to look for new customers, although we do a lot of that, too. By doing more volume with existing customers and targeting specific, potential customers, we've managed to keep growing while others have backpedaled. We've done it by targeting and focusing our business on certain accounts, then selling deeper into them and picking up some targeted industrial accounts, and it appears to be working: for the second quarter of 2002, we wound up with a double-digit increase over the year prior.

President

Levac Supply

Kingston, Ontario

In general, customers are looking for any way that a distributor can help them save money, and the current economy has emphasized that even more. In Canada we haven't been hit as hard as the U.S., although we're certainly down from where we were a few years ago. To get new customers and keep those that we have, we've gone past just selling fasteners, and started organizing and maintaining fastener inventories for customers, who typically have nuts and bolts spread all over the place. For example, we were recently awarded a contract to go in and reorganize an entire storeroom. By helping them get their house in order, we're able to not only supply the product, but also provide the value-added services that the customer needs. We've also seen and tapped opportunities in the specialty fastener arena, which can pay off, but does require some extra researching and sourcing on the distributor's part. A lot of end users get their specialty fasteners from OEMs or from other sources, such as the companies that sold them the machinery or equipment. Then, they keep reordering from the same companies without realizing that those parts could easily be converted to a distributor that can supply the parts in a much more cost-effective manner.

General manager

ET Fasteners

Tyler, Texas

Times are a bit flat right now, so independent distributors like ourselves are getting back to the basics by delivering great products and quality service. These two strategies are necessary during any economy, but when times are flat they become even more critical. To increase our customer base, we're relying on technology to search out and find specific niche markets on both an international and national basis. We've also used technology to increase communication with our customers, through the Web, e-mail and Internet. In today's markets, industrial consumers of the products we sell are inundated with information coming at them from many different directions — even more than they were five years ago. To keep up, independent distributors have to do the same.

Senior vice president

Endries International

Brillion, Wis.

Despite the economy, we're continuing to see growth in our business, mainly due to capitalization of market share, although we have seen softness in many industry segments. A few years ago we adopted an aggressive growth stance, then put the infrastructure in place to support it. This was in place before the recession, and the results are starting to pay off right now. For example, we implemented a more aggressive sales focus and have landed some additional business as a result. We also positioned ourselves geographically, and have been able to move forward with that type of growth as well. Another way we've managed to buck the faltering economy is by selling to an extremely diverse customer base that covers many different SIC codes. Because of this, the downturn hasn't hit us as hard as those distributors that are concentrated in core sectors. Diversification has definitely played a major role in shielding us from that downturn.

One of the strategies that we've been quite successful with — due to the fact that we have an expansive geographic presence combined with consistent processes and procedures — is with corporate-type agreements with customers who want to consolidate or leverage their purchases. Many times, these corporate agreements apply not only domestically or in North America, but also come into play in the other parts of the world where we already have a presence.