For all the talk about the intangibles that go into a successful distributorship, Jeff Haggard faces up to the fact that there is one attribute that will always be the compass by which customers will steer.

"There are three things that have affected the buyer's decisions the past few years: price, price and price," he says.

As the sales manager for Haggard & Stocking Industrial Supplies in Indianapolis, Haggard is more philosophical than frustrated by this. At the same time, he knows that what has, and will continue, to win the day for his company, is what follows price.

Haggard & Stocking's primary product focus is on perishable tooling, material handling, safety and related MRO products. Headquartered in Indianapolis with a branch in Ft. Wayne, Ind., the company is involved with integrated supply, as well, with 15 such programs in place. The two locations have more than 50 employees and an inventory of approximately 18,000 items.

Haggard knows his customers want to pay as little as possible for their materials. It's helping them lower overall costs, and not just prices, that is his company's biggest challenge.

"In a nutshell, we're going to look at what's best for the customer to reduce overall cost," he explains. "Because the more we marry into that customer, the longer we're going to be with them."

It's an approach that has been going better for Haggard & Stocking for the past year or so. "We've had some really good months back to back. And we landed some fairly large new contracts in '04, which have been good breeding ground for new business as well as catalysts to get us past some of the rough roads of the last three years," Haggard says.

Haggard knows he wasn't the only one driving down those rough roads, and he doesn't dodge the fact that the last few years were not pleasant for his company, or for many of the manufacturers with whom he's worked. Indiana was among the harder hit states in terms of losing manufacturing jobs—exemplified by a United Airlines plant that closed not far from Haggard & Stocking's Indianapolis location.

During the down times, Haggard & Stocking did what Haggard calls "a variety of things," including some layoffs—but even managed to grow a little.

"We looked to diversify. We did some cost-savings measures, employment being one of them," Haggard says.

Instead of reducing its labor force drastically, the company implemented "a small wage cut, which has since been given back in part, as well as through bonuses," he explains.

Part of the reason for the company's growth was the result of investing more in technology and improving their "electronic capabilities, B2B, e-commerce. We have our own scanning program, a bin-stocking system which can marry into a customer's operating system and their vending machines," Haggard explains. "The bottom line is a customer will buy from whom they like... You can build relationships, but you have to be able to back those relationships up with the new technology."

Today, Haggard is more upbeat about what he perceives as an uptick in the economy, but maintains perspective that comes from getting through difficult times. That United plant closing occurred in 2002, and represented a blow to the general Indiana economy as well as to Haggard & Stocking. It was painful, but "it was a catalyst for us to get into other [airline] accounts," Haggard says.

Among those accounts are two of Haggard & Stocking's more active customers today: Timco Aerospace and L3 Communications, both based in Texas—Waco and Greenville, respectively.

These aerospace industries and some medical manufacturers have been doing well, Haggard says. The company has also benefited from a shuffling of the deck in terms of its focus on automotive.

"We focused on the Tier 2 markets. The Big 3 [GM, Ford, Chrysler] have been very good customers for us over the years," he explains. "But we've been putting more focus recently on the smaller shops, for example—the ones doing the work for the [Big 3] automotive."

There is still a feeling of apprehension, though, on the part of Midwest manufacturers, Haggard says, and an overall reluctance to spend money unless necessary.

While sympathetic to a company's financial situation, Haggard and his salespeople will try to point out that spending more now could mean saving more, and making more, down the road. He uses grinding wheels as an example.

"One $10 grinding wheel can make 100 parts, for example. But if you buy the $100 wheel that can make 10,000 parts, which will truly cost you less?" Haggard asks. "If you have a customer who understands it or isn't restricted by their administration, then I think they will look at something that will last longer, [even if] it costs more."

He admits, though, that this may be easy for him to say.

"However, the cash flow for the customer comes into play. They may not have the money to buy," he admits. "Also, if the customer only has 100 pieces [to produce], then the less expensive wheel might be best."

This realistic outlook towards price and value is one that Haggard's suppliers have come to appreciate and rely upon.

"We have a number of distributors that have great sales forces, a number of whom have tremendous marketing capability," says Frank Monteleone, vice president of sales and marketing for Manchester Tool Co. "We have some distributors that have good relationships with their customers and some who are financially capable who can take advantage of Manchester's buying schemes. But in Haggard, what we have is a distributor who has all of those components."

Manchester is based in Akron, Ohio, where they've been for 53 years, and is Haggard & Stocking's number one supplier in terms of overall sales. Manchester makes indexible drills as well as cut-off grooving, face grooving and threading tools.

Manchester's regional sales manager, Brian Sponseller, is welcome at Haggard & Stocking "as an adjunct to their staff," Monteleone says. "So we're not thinking of ourselves as 'supplier-vendor.' We're thinking of ourselves as business partners."

Monteleone describes his company as "a niche-focused line, to be sure. We don't have a lot of distributors, [and] we keep our distribution network small and focused on growing sales, not defending... You got a round tool line, or an abrasive line, that [can be] a commodity, you're subject to the next guy with a sharper pencil than you. And we don't like to associate with distributors like that."

Another of Haggard & Stocking's top suppliers is Norton Abrasives. Mark Fratantonio is the account manager for Norton, whose parent company is St. Gobain Abrasives, based in Paris. Norton manufactures other brands, including Merit, Winter and Universal, all of which are handled by Haggard & Stocking, he explains, with the emphasis on the Norton brand.

"They're what we call a full-line distributor, giving them full access to all our industrial lines of products. They cover accounts that, generally speaking, can range from $1 million to $5,000," he explains. "Usually, they focus on accounts that are in that realm of $10,000–$50,000, with a few what we call 'elephants' that have integrated supply contracts."

Fratantonio also praised the Haggard & Stocking salespeople, especially their technical capability that enables them "to recognize opportunities with abrasive applications. The coverage they afford us throughout the state and their ability to land supply contracts with larger accounts... makes it a good marriage."

"[Haggard & Stocking CEO/president] Herb and Jeff, through their work in the community, have a lot of good contacts," Fratantoino praises. "And in this business, good relationships can be the strongest thing to get and land you good contracts."

"Customers want to work with you if they like you," Haggard says of his company's work and relationships with Norton officials. "We take the same approach with our vendors. It's truly a partnership."

While Haggard & Stocking looks ahead to good and even better economic times, the company is not without its concerns.

Steel and fuel prices continue to leave an impact "with just about every vendor we see," Haggard explains, referring to "price increase(s) or surcharge(s)..... Some grinding wheels, for example, go through a process where they have to be heated. And fuel drives those ovens. That's been difficult."

Haggard hears from various suppliers and steel companies who do not guarantee availability, let alone price, a sort of "you get it when you get it" arrangement, as he describes it.

Manufacturing, especially in his home state of Indiana, is improving, he says, but with limitations.

"Some manufacturers are excited about the increase in business, but aren't hiring back the [entire] workforce that they had before," Haggard says. "We've had this uptick in the economy, but everyone is cautious as to how long it will last. So they aren't hiring back to full capacity, which is causing extended lead times."

Still, he is confident that the game plan they've followed through the years will continue to allow them to prosper. For all the talk about computer speed and quick turnaround time, sometimes the whole business can come down to a few simple touches, he explains.

"We give the corporate feel with a small-town touch," Haggard says. "We're a family-run company where our customers, to us, become partners. We want them to see our guys on a daily basis. And all my guys do that. They're taught to give that small-town touch to the customers."

Jeff Haggard, sales manager at Haggard & Stocking, knows price is everything—but not the only thing.