When it comes to penetrating new markets, service and knowledge are the surest ways to make an impact. Just ask Dick Schmid, vice president of marketing for Crescent Electric Supply, an electrical distributorship that made a name for itself selling to electrical contractors throughout the Midwest in the early to mid-20th century. When Crescent decided to tackle the industrial automation and control market in the 1980s, its managers knew that hands-on service and technical know-how were prerequisites for success. So they did their homework and came prepared.

“This business is not about products; it's about solutions,” says Schmid, whose grandfather, Titus Schmid, founded Crescent Electric Supply in Dubuque, Iowa, in 1919. “When you look at what we offer, we're really reaching out, being proactive and collaborative. We're in at the beginning, making suggestions rather than just reacting to a question.”

That represented a change from the way Crescent Electric served its traditional contractor base, which tended to be a more reactive business in those days, Schmid and his colleagues Dick Cody, Louie Scheiderer and Dan Hill agree. So the company set out to gather the products, people and services required to deliver solutions to industrial customers, which today include the automotive, agriculture and machine tool industries. Crescent Electric offers engineering assistance, application support, plant energy audits, safety audits and training on everything from machine safety to equipment use.

“Customers don't buy products, they buy solutions,” Schmid emphasizes. “Our ultimate goal is to make our customers successful, productive and profitable.”

“We really strive to become part of our customers' team,” adds Scheiderer, Crescent Electric's director of industrial/OEM sales. “The bottom line is their issues are our issues.”

Crescent Electric's business is split 60-40 between traditional electrical accounts—contractors, utilities and government—and industrial OEM/MRO business. The latter portion has seen strong growth lately, helped by Crescent's 2003 purchase of Northwest Controls, an Ohio distributor of automation and control products. Crescent Electric has been growing by acquisition since its inception 90 years ago and was especially active on the M&A front in the 1970s. The company has grown from one location in 1919 to 126 locations in 26 states today, with roughly 1,700 employees.

Crescent Electric supplier Jack Nehlig says the Northwest Controls acquisition was a turning point in the distributor's industrial business. Nehlig is president of Phoenix Contact USA, a manufacturer of terminal blocks and automation and control solutions for industrial markets. Phoenix Contact had been supplying products to Northwest Controls for years, Nehlig says, and knew Crescent Electric Supply by reputation.

“We knew Crescent was a well-respected company, so when they bought [Northwest Controls], we were very optimistic,” Nehlig says, pointing to the financial, technological and marketing resources Crescent brought to the table. “What was really exciting was that Crescent embraced the automation and control business. They wanted to use Northwest's platform as a vehicle for growth.”

And they have. Crescent Electric has been one of Phoenix Contact's strongest growing distributors in the last three years.

“They're doing really well,” Nehlig says, adding that service and knowledge are what set the distributor apart. “Crescent seems to be a wonderful company that's backing the people with the resources and the management support to go through with their strategies.”

“Our customers truly need assistance in selecting the right products,” says Crescent Electric's Ohio district manager Dan Hill. “They also need our assurance that we're there to help after the sale.”

To that end, Crescent Electric has hired engineers and technically trained salespeople to help customers design and implement automation and control systems for their manufacturing facilities. Field sales engineers are backed up by application engineers who provide pre- and post-sale service. Crescent is also adding product specialists as a third layer of support.

“Our industrial business is different because of the product mix and the required technical skills to support it,” says Scheiderer. “We create demand for what we sell. We educate customers on new technologies, codes and standards. We offer seminars, product demonstrations and customized training.

“We're solving problems, eliminating waste, reducing start-up time, reducing design and engineering time—and in many cases eliminating labor and increasing throughput.”

All of that requires knowledge—knowledge that Crescent Electric customer Jim Clark has experienced first hand. Clark is vice president of Atlas Industries of Fremont, Ohio, a maker of precision machine parts and a Crescent Electric customer for five years.

“They give us all kinds of support beyond what we have [in house]—and we're pretty steep in knowledge,” says Clark, whose staff works closely with Crescent Electric's engineers to develop automation systems for its three Ohio manufacturing facilities. “That includes [engineering assistance] and recommendations of what kind of equipment to use. They hit the nail on the head every time.”

Atlas Industries also takes advantages of Crescent's training programs, plant safety audits and its bin stocking program, in which Crescent manages customers' small consumable parts. Crescent's safety audits often identify unsafe conditions in a plant and can uncover potential OSHA violations. The plant safety audit Crescent did for Atlas was so successful, Clark says he's going to schedule an energy audit, which identifies ways customers can save on energy costs.

“We learned that we're not as good as we thought we were,” on safety issues, Clark explains. “It helped us ward off fines from OSHA inspections.

“They keep coming up with more new programs, they keep adding more technical programs and we keep utilizing everything they put out there for us—because everything they bring to the table works.”

Like most companies serving the manufacturing industry, Crescent Electric is concerned about the stability of the U.S. economy. Slow growth in manufacturing coupled with continued high energy and raw materials costs could put capital expenditures on hold indefinitely, and that would hurt, says vice president of sales Dick Cody. At the same time, he says Crescent is diversified enough to sustain some blows over the long haul.

Schmid looks at the issue from his customers' perspective.

“Candidly, the biggest issue for us is the long-term success of our customers,” he says. “Competition is global and can literally pop up from anywhere. We need to work very hard to ensure the long-term success of our customers.”

That's where automation solutions, training, inventory management and being a one-stop shop for electrical and industrial needs makes a difference, Schmid says. Such capabilities help customers reduce costs and become more efficient—and that's the key to the long-term survival of U.S. manufacturing, he and his colleagues agree.

“We truly believe that [manufacturing] business will come back to the United States,” says Schmid. “And one thing we can do to help that happen is make our U.S. customers more profitable.”