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Sticking to the plan

Distributors need a consistent plan to sell to customers, or both they, and their manufacturers' products, look unreliable

By Kevin McCloskey -- Industrial Distribution, 5/1/2003

Whether you're a distributor or a manufacturer, a key part of planning your business is focus, self-knowledge and a willingness to learn from your customers what they need. As distributors, we are dependent on our manufacturers to tell us how they're positioning product in the marketplace. Given the amount of time to get people to accept a change, it's very difficult— particularly for a small distributor — when the plan rotates annually, or even more frequently. Manufacturers, heed this advice: Once you've decided on a plan, stick to it.

Many plans require a significant investment on our part, whether we need to employ specialists, put our people through specialized training, hold specialized inventory or do specialized marketing. If we commit resources in a certain direction, we need to know that the direction won't change before we have a chance to recoup our costs.

In return for consistency, those manufacturers that stick to a plan keep us dedicated to their cause and get a stronger piece of distributor mind share. Failure to stick to the plan undermines their credibility and makes us more skeptical. Every time we need to decide whether to make additional investments in supporting a manufacturer and their product line, we're looking at past experience to determine whether it's worthwhile.

For the customer, the payoff is a steady message. Customers want the best value, but with so many voices in the marketplace, they're spending time and money sorting through the clamor.

When we stick to a small number of key suppliers and work them consistently in the marketplace, customers know that we are the dependable experts on that product or brand. Customers know that we have a solid relationship with our key suppliers.

We received a call from a large municipal utility authority that has been having significant difficulties with a 20-year-old system. Various suppliers have sold them off-brand replacements, none of which have alleviated their underlying problem.

The utility came to us because they knew our reputation for technical savvy and expertise with this product line. We looked it over, sat down with our supplier, and then went to the customer. The customer agreed to take two new products from the manufacturer's line, and we installed test units that solved their problems. We were able to put together a final solution for the customer, rather than another Band-Aid.

Because the manufacturer had put a market plan in place that allowed us to sell competitively, we were able to win the contract for the full system replacement. As a result, the customer reduced his costs, we've maintained our image with the customer and the manufacturer has acquired a consistent customer. In addition, we've gained more than $150,000 in new business and created new opportunities for our supplier with the municipality.

Staying on a plan gives our suppliers and ourselves a consistent profile in the marketplace. Know the plan and stick to it; know who your good partners are and stick with them.


Author Information
Kevin McCloskey is vice president of Dodge-Newark Supply Co., Inc. in Fairfield, N.J. Dodge-Newark Supply Co. is a member of the Power Transmission Distributors Assn. PTDA is an association of industrial distributors and manufacturers dedicated to providing solutions to customer needs. This is the second in an occasional series of PTDA's Best Practice Case Studies.

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