Bill McCleave of W.R. McCleave & Associates, a leading consultant in the distribution industry, posed an interesting question during his keynote presentation at the recent Fluid Power Distributors Assn. convention. "Look back five years ago at who your customers were then and look at who they are today. Is there an opportunity for now finding new customers?" he asked.

The session was on "Business Intelligence" and it raised some important points for distributors to consider. How has your business changed? Are you selling different products than you were five years ago? What about your customer's business? How has it changed and who exactly are their customers?

On the surface, the questions seem simple enough. But with the pressing need to sell products on a daily basis and meet projected revenue goals, most distributors don't have the time nor the inclination to engage in some sort of strategic planning to determine exactly how to position their businesses for the future.

Yet ultimately, it is critical to your success. McCleave recommended that distributors look at specific customers and determine what they're buying now and what they might be buying in the future. "Ask yourself, 'Should I add another product line to my existing customer base or should I enter new markets with the products I have?'"

Several weeks ago, I talked to a distributor at the meeting of The Assn. for Hose & Accessories Distribution who told me his customer base had changed markedly in the past year. He also had a new customer, a computer company that needed specialized belting for its production process. He ended up carrying a new line and generated a substantial amount of business.

Another distributor told me recently he had increased his business by adding a newly trained employee who was now using a mobile van to conduct repair services at customers' sites. It was an investment that has paid off.

The distribution business has changed markedly in the past decade. The traditional big smokestack industries, in many cases, are no longer as prominent as they were years ago. But what has emerged are new customers who need new products and more solutions. The more you know about your customers and their own customers, the better off you will be to compete. You'll be much more pro-active rather than reactive.

And it all starts with business/market intelligence.

jkeough@reedbusiness.com