Canadian Electrical Wholesaler

David Gordon

Ocotber 13, 2017

By David Gordon

In the electrical industry, capturing business is a fight for market share. And to win that fight you need the most effective sales organization. One that can get into “the right person at the customer” (be they and end-user, contractor or distributor) to prove your difference. At the same time companies need to do this cost effectively. There is a balance that needs to be maintained. For many manufacturers, the answer is manufacturer sales agents (reps).

To gain a perspective from someone who has “been there, done that,” we reached out to Jason Obetz who has worked for electrical manufacturers (and a distributor in another industry) in senior sales management roles. Jason is currently participating in Channel Marketing Group’s Executive-in-Residence program, sharing his expertise, while he is pursuing his next opportunity within the industry. Jason most recently was the EVP Sales for Omni Cable and prior was VP Sales for All Current.

His thoughts:

Face time with the customer is expensive and limited so your approach is critical to sustained growth. To be clear about “face time,” we are not talking about connecting with your customer on a mobile device; rather, your company’s representative physically visiting the electrical distributor or engineer. I have heard many debates on which sales force (independent agent or direct employee) is more effective in growing sales and which one protects your sales expense line on the P&L. In reality, should it be a debate or is it a function of company and market resources. Size does matter for a direct salesforce — the number of people needed to adequately cover the market times the investment as well as answering the question of, “Is there enough revenue potential in that marketplace to generate the ROI for the direct salesforce investment?”

It is estimated that 70% of electrical manufacturers employ independent sales agents to specify, demonstrate and promote their products on the path to maintaining existing sales and developing new business. And let’s be honest, there are some geographic markets that do not represent significant spend in your product category and couldn’t support a direct salesperson even if you had 100% market share.

The reality is the most effective representation generates the lower cost of sale with the greatest sustained growth.

Agents “eat what they kill” and are paid on what they sell regardless of the many costs associated with capturing the order. As a manufacturer, you can limit your upfront risk by not having a fixed sales cost that could be unproductive and ineffective resulting in a negative impact to your bottom line. Is that really true…? Is your risk mitigated because there is a wall built between your P&L and independent sales representation?

Some of you are probably nodding your head and saying yes. I can hear your thoughts now: “If my agent is not producing, my sales expense remains low. If needed, I can terminate the agent and have another agent hired in 30 days.” All of this maybe true, but what are the costs you already incurred with the time invested to have a non-productive agent? Have you measured lost sales or realized the diminished stock and support position in the channel? Both are difficult calculations to quantify that could place a value on your current representation. What if other agents already have your competitors?

The more effective approach to performance management is in this simple equation: Objectives + Performance = Results (O+P=R).

There has long been a tradition of manufacturers meeting with their agents at NEMRA, NAED and other national meetings to create a framework for developing annual plans. There are some excellent agents that have detailed account strategies, market plans and an objective road map that they will work during the year. How does your management supervise their representatives and ensure focus on your products? It’s important to have clearly defined objectives that start with understanding account potential, market availability, call frequency and the ability to convey your value proposition.

Next, a written sales strategy created by the agent that depicts their intended route to success. The strategy is a methodical plan of the customers, projects and products that will deliver the intended results. In addition, the strategy should include any additional costs to serve, marketing and promotions, incentive agreements and manufacturer participation costs. Lastly, a monthly check-up on progress and  quarterly review are needed to ensure the annual plan is being followed and achieved. Yes, this cadence of follow-up and review with the agent takes organization and discipline. Perhaps the manager can plan the review during one of their drop-ins and very expensive “ride along.” This is not to suggest the manager should not conduct visits with his agent. Rather, a planned visit by both the manager and agent that is agenda specific and focused on achieving the annual objectives.

In the end, your agent typically offers a lower variable cost upfront. There are potential hidden costs and a clear financial downside to an underperforming agent. The keys to success in any sales organization is having clearly defined objectives, a logical sales strategy and a consistent review process of the performance.

Whether you are a distributor or manufacturer, what is your formula for effectively managing your sales organization?

If you are a salesperson, what are the traits you most desire (respect) in a sales manager? What “support” / management and performance metrics do you want from your sales management?

Companies that are the most successful have a compassionate metric management culture. One where everyone clearly understands what is important, what key metrics are, and can openly discuss initiatives to achieve common goals. Sounds simple. Unfortunately ,challenging for many.

David Gordon is President of Channel Marketing Group. Channel Marketing Group develops market share and growth strategies for manufacturers and distributors and develops market research. CMG’s specialty is the electrical industry. He also authors an electrical industry blog, www.electricaltrends.com. He can be reached at 919-488-8635 or This email address is being protected from spambots. You need JavaScript enabled to view it..

Study

Technological change has often been the cause for major market disruption. Consumers tend to benefit from these kinds of disruptions through improved service levels or radically lower prices. Wholesalers and distributors, however, have fewer means to drive changes themselves.

 

Here in Part 3: successfully operating in added-value market segments. This requires applying a number of different levers, usually at each step of their sales channels. . . Read more 

 

 

 


By Shoynear Morrison

The importance of using the right tone within communications and marketing can be easily underestimated. Within these fields words are used to convey specific messages and meaning regarding a brand.

What does the word tone mean and how can understanding its meaning allow you to apply this literacy device?

Well... The Merriam-Webster Dictionary defines the word tone as an “accent or inflection expressive of a mood or emotion, the pitch of a word often used to express differences of meaning.” Aka… tone, is the way we say something and creates emotion. 

 

Read more...

 

 

 

Changing Scene

  • Prev
Do you know an industry member who has greatly contributed to the Canadian electrical industry and ...
Kendra Smith will be joining the company’s Nationals Accounts team as the Key Accounts ...
Flextherm Celebrates 25 Years With a Big Bang PHOTO: EIN-37/CEW-18-CS-Flextherm-400.jpg The floor ...
Electro-Federation Canada’s 6th Annual Future Forum, Thinking Smarter — Channel Products, Energy, ...
Blueway has been added as a division within Sonepar Ontario, reporting directly to Sonepar Ontario ...
Pilz Canada has added Marcus Graham to its family. Marcus is now serving a wide base of customers ...
Christopher Balleine has been appointed Stelpro’s Sales Representative, Maritimes, ...
Based in Ottawa, Lafontaine will be responsible for building on Schneider Electric’s ...
Bill Smith from Electrozad Supply Company Limited has been selected as this year’s recipient ...
Effective April 24, 2017, Dave Syer will report directly to CEO Roger Little, and will be a member ...

Peers & Profiles

  • Prev
  Laura Dempsey has been working as an outside sales representative for E.B. Horsman & ...
Michael Gentile, President and CEO of Philips Lighting Canada, has had a long and distinguished ...
Gordon MacDonald is a cheerful, driven individual who loves to be challenged, a trait that suits ...
  Jordan Prins is an account manager at Wesco Distribution in Abbotsford, British Columbia. ...
Mike Marsh, President and CEO of SaskPower, has been a leading figure in Saskatchewan’s electricity ...
I didn’t wake up one day and go, “I want to work for my dad!” Actually, it was ...
    Ouellet Canada is celebrating 50 years in the Electrical Heating ...
  On February 27th Lumen opened their 36th branch in Ottawa, Ontario. ...
John Baron is President of Elec-Tech Sales Ltd., a manufacturing agent with headquarters in ...
  In September 1957, Ken Gerrie opened a storefront electrical supply counter in the growing ...

Looking Back

  • Prev
The resource-based industries of the Maritimes are looking to electronics to make their operations ...
  Electrical distributors must remain in both the electronic and electrical ends of the ...
  The public’s strong interest in energy-saving products should continue in the ...
  Even in a principally agricultural province like Saskatchewan, the impact of electronics ...
Electrical distribution companies operating in British Columbia will continue to get larger while ...
Golden anniversaries are celebrated by the mature, and our industry is allowed to celebrate ...
The last 50 years have been exciting ones for the electrical industry but they won’t compare to ...
The ceiling that had been placed on membership fees remained a point of contention among ...
The year 1982 started on a relatively good note for electrical distributors. Sales in the first ...
An $80,000 deficit from 1979 greeted the CEDA members at the 1980 Annual General Meeting...   ...

Canadian Electrical Wholesaler is surveying Canadian Electrical Industry Businesses. This short survey (5 multiple choice questions) will aid in determining the the state of Canadian electrical businesses and provide valuable insight into industry shifts. 

We thank you for your time in filling out this survey.

Take survey here: https://www.surveymonkey.com/r/CEWbusinesssurvey

 

Copper $US Dollar price per pound

Kerrwil Publications

538 Elizabeth Street, Midland,Ontario, Canada L4R2A3 +1 705 527 7666
2016 All rights reserved

Use of this Site constitutes acceptance of our Privacy Policy (effective 1.1.2016)
The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Kerrwil