Canadian Electrical Wholesaler

 

Dec 5, 2018

Frank HurtteBy Frank Hurtte

In setting growth plans for the coming year, one should ask, “What percentage of my customers might go away?” Some will go out of business and they stop buying. Others might be folded into a larger organization. If that organization has a relationship with a competitor, your business could be switched to another supplier. Further, some aggressive competitor could make inroads into your account through hard work and/or better relationships, by way of a valuable new service or through jaw dropping price levels. This is hard to face, but it happens. The question is, how much would any of these affect your business?

To the best of my knowledge, the only industry to truly study this phenomenon is the HVAC/R industry. Three years ago, HARDI (Heating, Air Conditioning, and Refrigeration Distributors International) hired Mike Marks and Steve Deist of Indian River Consulting Group to conduct a study that resulted in meaningful numbers. These results, which shocked the industry, were published in a book entitled Myths & Misperceptions: How markets are really made in HVACR. I recommend the book to everyone in the HVACR business and believe the points made apply to distributors in many other lines of trade. Here are a few highlights from their work:

The average small HVACR contractor switches suppliers at a rate of 4% per year with well over half of the attrition (2.5%) tied to distributor dissatisfaction. Larger and more professional contractors switch at a rate of 11% per year, with 7.8% of that tied to distributor dissatisfaction.

Another group, which lumps commercial, institutional and industrial accounts together, switches business at a rate of 29% per year. I believe this higher attrition rate may well be tied to the point that HVACR distributors tend to be geared to better serve contractors than other types of customers. Further, if the institutional portion of the mix is higher, we might assume some of those institutions are government-run organizations that base purchasing practices on price (low bid orders).

For our discussion, there are two points to consider:

1. Even the best of customers leave the fold at a rate of 4% a year with the average nearing double that number.

2. If you are planning to grow your business by 10% next year, plan on 15% growth. Losing some of your existing customers is probably in the cards.

Retention is the opposite of attrition

Nobody starts off with a plan to lose customers, but things happen. The inside sales team gets stretched a little thin and service wanes. The warehouse gets careless and the customer finds themselves facing a box with the wrong parts. Even salespeople, charged with keeping customers, forget to cover all the bases with their customers. Your top suppliers experience delivery issues and you take the brunt of the blame. The list goes on and on.

Done properly, end of year planning allows for contemplation, reflection and plans for correction. Planning allows for an objective view of the current situation and how retention might be improved going into the next year.

Have you reviewed the (hopefully short) list of customers who have stopped buying from you? 

What happened?  

• Has anybody from management done an exit interview?

• How might the situation have been different?  

What preventive measure could avoid the problem in the future?

• Are there trends? Could it be that dealing with "Danny" is toxic to customer health?

• Are there policies or procedures impacting business?  

How long did it take for you to realize something was wrong?

• Who in your organization monitors customers for significant drops in business?

Not every ex-customer can have facial warts and a bad attitude

• Did you listen to the customer’s comments without tossing out excuses?

Are there existing customers on the cusp of leaving?

• Are there early warning systems that might point to issues?

• How might management assist the team in determining ongoing customer satisfaction?

Two important thoughts for your end of year plan

First, customers are more likely to switch distributors because the incumbent distributor did something wrong than because they were sold on the new distributor. This runs contrary to the common sales think.

Second, distributor sales teams aren’t great about staying in contact with the other guy’s customer. After a short flurry of activity, which produces little or no results, they engage with existing customers and let the potential customers fall out of their mind. Most of us understand this is a mistake, but it is the reality of the situation.

Progressive distributors have established a plan for continuing outreach to their competitors’ customers. Is this in your end-of-year plan?

Frank Hurtte is the Founding Partner of River Heights Consulting. The Distributor Channel is a service of River Heights Consulting. Find out more.

       Partnering For The Next Step                                                                     

Siemens CanadaWelcome to the Digital Enterprise Virtual Summit brought to you by Siemens

How quickly can you react to changing conditions and demands in your market? How can you ensure your production will run securely at any time in the future?

Industry’s digital and technological transformation is the answer for meeting today’s and tomorrow’s challenges and market needs.

With the right digitalization and automation solutions, expertise won from practical experience, and a partnership approach that benefits all involved parties.

To explore these possibilities, we’re bringing together top-level speakers, specialists and decision-makers from various industries and experts from Siemens to the Digital Enterprise Virtual Summit under the motto “Partnering for the next step.”   

This virtual summit will be an interactive digital event featuring first-hand experiences and success stories achieved with industrial digitalization and automation solutions, and cutting-edge technologies.

Join us on July 16 and learn from customers and experts how you can respond efficiently, flexibly and safely to the changing market environment.

To cover as many different time zones as possible, we offer two almost identical live sessions – you can also watch them on demand at your convenience:

Sessions runs from :  9:30 am to 2:15 pm ET (3:30 pm to 8:15 pm CEST)


READ MORE

 

John JefkinsBy John Jefkins

In 2011, I started working in the electrical arena and quickly noticed that there was a high employee retention rate within the industry. Today, I regularly engage with Electro-Federation Canada members with 20, 30 and even 40 plus year tenures. Other industries I had worked in previously, such as telecommunications, had higher turnover rates.

Our industry faces an increasing need for talent, with new retirements and product/process innovations and modernization driving the need for specialized roles — some not even known yet.

Read More  

Digital Twin MarketA recent Markets & Markets report estimates the Digital Twin market will grow from US$3.8 billion in 2019, to US$35.8 billion per year by 2025, at a CAGR of 45.4%. Digital Twin software is already revolutionizing industries such as healthcare, architecture, aerospace, defence, and automotive and transportation.

Furthermore, the global smart infrastructure market, which includes the Digital Twin sector, is expected to thrive at a considerable CAGR between 2020 and 2025 as demand for the smart infrastructure has been a booming year on year, reports Market Research Explore - details. 

Read More

PNNL StudyBy Craig DiLouie

The U.S. Department of Energy has released the results of a study examining authentication vulnerabilities in connected lighting systems (CLS). Particularly as emerging CLS incorporate distributed intelligence, network interfaces and sensors, they can serve as data-collection platforms that enable a wide range of valuable new capabilities as well as greater energy savings in buildings and cities. However, CLS technology is currently at an early stage of development, and its increased connectivity introduces cybersecurity risks that are new to the lighting industry and must be addressed for successful integration with other systems.

Read More

David GordonBy David Gordon

COVID-19 has heightened the benefit of, and interest in, eCommerce for electrical distributors. Our second and third COVID-19 Electrical Market Sentiment Reports have shown that those with an eCommerce offering have seen online sales increases. Further, from conversations with distributors, their site activity increased. The benefit is that these companies had lower sales declines (and some increases), and were able to better serve their customers.

A further benefit is that their remote workforce had access to an online resource, other than manufacturers, for quick, easy, product research.

Read More

Changing Scene

  • Prev
 In the 6th installment of this video series, HALO MINUTE, by Cooper Lighting ...
Northern Cables announced via their social media accounts that they have broken ground on the ...
Electro-Federation Canada (EFC) and ETIM North America (NA) have entered into a strategic ...
Southwire announced that Tim King has accepted the role of President of Southwire Canada. ...
Savant Systems has announced it has signed a definitive agreement to purchase GE Lighting, a ...
EFC’s Economic Forecast Series webinar will deliver global, national, and regional economic ...
A new video featuring Sonepar’s Vice President of eCommerce and Digitalization, Gaurav Sharma, ...
Electro-Federation Canada (EFC) and its members are proud to support the next generation of leaders ...
Eletrozad has launched Electrozad Online. The same standard of service you've come to expect from ...
After more than 42 years of exemplary service at Leviton, Gabriel Massabni, Vice President ...

2020 q2 Pulse of Lighting FindingsChannel Marketing Group’s 2020 Q2 Pulse of Lighting Report projects that the lighting market, through electrical distribution, contracted by 20%.

The survey, conducted the third week in June, received responses from 164 individuals who equally represented industry stakeholders.

Distributor Performance
Very few distributors reported either flat or positive performance with over 30% reporting declines of over 30% for the quarter.

 

 

 

Read More

EikoEIKO has announced the the introdutction of EiKO Marketplace, a digital storefront, located in the EiKO Portal. Developed to market and sell promotional specials and excess inventory including generational, overstock, and niche products; the EiKO Marketplace presents an opportunity to offer high-quality lighting at incredible savings.

Due to the rapid development and generational changes of LED technologies the timing is perfect to launch the EiKO Marketplace as an outlet to sell high quality, value-priced products.

 

Read More

 

 

 

 

LevitonLeviton Canada is pleased to announce the nomination of Thomas Supinski as Sales Director for Alberta and the Prairies as of June 1st, 2020, as Julie Marineau will be moving to Montreal along with her family. Julie will be promoted to Vice-President, Retail at Leviton Canada’s head office.

Thomas has been residing in Calgary since 2003 and has a deep understanding of the regional market and its specific needs.

 

 

Read More

 

 

Peers & Profiles

  • Prev
  Sonepar is excited to introduce Anju Uddin as the new Marketing Manager for their Ontario ...
Electro-Federation Canada’s Young Professional Network (YPN) is a fantastic tool for industry ...
Sean Bernard is the Intelligent Controls Manager, Canada for Ideal Industries. Sean resides in ...
Christina Huang is a Senior Contracts Manager for Schneider Electric. She has a varied, technical ...
Jenny Ng is a Business Development Manager for the Power Solutions Division of Schneider Electric. ...
With over 60-years of experience in the lighting industry, CBC Lighting has established itself as a ...

 

Anju UddinBy Blake Marchand

Sonepar is excited to introduce Anju Uddin as the new Marketing Manager for their Ontario Region! Anju has more than 15 years of experience as a marketing expert, which includes running an independent agency working with a multitude of businesses in various industries and geographies from around the globe. 

With a passion for reinvention and finding success through a commitment to education and innovation, Anju has utilized her exceptional creativity and business acumen to engineer seamless brand experiences...

Read More

 

 

 

Looking Back

Has no content to show!

Copper $US Dollar price per pound

Kerrwil Publications Great Place to Work. Certified December 2019 - December 2020

538 Elizabeth Street, Midland,Ontario, Canada L4R2A3 +1 705 527 7666
©2020 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