Canadian Electrical Wholesaler

Jan 11, 2019

David GordonBy David Gordon


As we turn the page into 2019, welcome to new opportunities, new challenges, new initiatives and perhaps some new ways of doing business or serving your customers to ensure a record 2019… whatever your goals may be.

While we thought about making predictions, we decided to leave those to others and share some channel dynamics that we’ve been observing that we feel are significantly impacting the electrical distribution channel.

These include:

1. Whose brand is valuable?

In an age of eCommerce, price comparisons, channel convergence and fragmentation, as well as sourcing and more, whose brand is important to customers, and why? Does the manufacturer brand matter to the end-user? To the contractor? To the electrician in the field? To the distributor principal? To their salespeople? Or does the distributor brand matter to a contractor? To their staff? To maintenance staff or engineers? Understanding and “living” your value proposition as well as adequately funding the communication of it will be critical to revenue goal achievement moving forward… and if you don’t, prepare to compete on price and defer margin growth.

2. Size matters

Size influences strategy. It impacts the ability to negotiate (leverage). It determines the flexibility to spend on people, technology, training, infrastructure, and more. But it doesn’t mean that “small(er)” can’t compete. Fitting your strategy and execution abilities into your resources can require creativity. Much depends on “what do you want to be?”

3. Manufacturers support channels, but you?

Manufacturers are supporting more sales and distribution channels than ever before in the pursuit of sales growth. They consider where is the customer buying and then have a fiduciary responsibility to consider being available to wherever the end-customer decides to purchase. At the same time, more distributors (in other channels) seek to identify how to increase their share of spend of their customers, hence they diversify their product offerings (especially those serving industrial and MRO environments). And they support many electrical distributors in your marketplace (in most cases). So the question becomes, why should they support you? What is your value proposition to them that justifies why they/their sales force should support you disproportionately? Or perhaps you don’t really need additional or incremental support from them other than access to material at a competitive price? Manufacturers will chase revenue; distributors should consider their needs beyond material.

4. Products or customer? What do you sell? What is your focus?

Many companies in the pursuit of “sell something” become product focused and consider that every account has opportunities. And, quite honestly, there are companies who produce or source products with the sole strategy being “sell to earn share (sales) at distribution.” These companies are affectionately called commodities… their products are interchangeable with competitors; they compete on price, ease of doing business or relationships; and are challenged with thinking of, or spending money on, marketing and creating demand. A few live on their brand legacy. And then there are companies that consider who their customer is and seek to develop products and offerings and then create a reason for customers to want to prefer, or purchase, their products. Some are successful, many are “talk.” Distributors also have the same challenge and differentiators become their ability or willingness to market (to differentiate themselves as well as their suppliers or offerings), the various services they offer (value-added, fee-based and expected) and the quality of their sales resources. Both parties should evaluate themselves as well as their customers and suppliers… and a healthy mix, by market, of product-focused and customer-focused suppliers and distributors is needed. The questions become, “What do you want to be (and then, are you willing to resource/manage it?)” and “What is your partner?”

5. Reaching/driving influencers

This is about demand generation. Who is responsible for creating preference for a product as well as for where the product is purchased. Manufacturer? Distributor? Marketing? Sales? And then the more challenging question of “How”? Consummating the order isn’t too difficult. The customer knows where the product can be procured and has their decision criteria. They can call, fax, email, visit a branch or order online. The key questions are what to order and why order from you. Manufacturers, are you investing to influence or leaving it to a distributor to sell? To accept an order (or “pull you from the shelf”)? Distributors, are you dependent on your sales organization to wait for “your” contractor to place the order with you? How you consider this can impact 2019 and beyond sales.

6. Digital divide from the top, through the channel

Much talk, growing investment in eCommerce as well as the broader eBusiness arena. In discussions with manufacturers we’re seeing more considering strategies (sometimes pilot initiatives) with distributors on targeted eBusiness / eCommerce initiatives. Creativity counts here, and manufacturers are testing models to determine how they can differentiate (partner?) with distributors. Adoption of “e” as an organizational mindset as well as a sales/marketing imperative may create more of a distribution divide than solely revenues. Ability to share ideas with senior manufacturing management can be key to gaining visibility… and then sharing results. The creative or open-minded can wind as manufacturers seek differentiation and revenue.

7. Defining service(s)

Distributors, and some manufacturers, offer many services. Unfortunately, they’ve done a poor job of cataloguing their services, and determining what is chargeable and what should be communicated. Every distributor can outperform Amazon, and for free, but customers take it for granted. Few charge for services due to sales conviction and defined pricing models. Some are changing this. Some have unrealistic goals of services being 10-25% of sales (feasible in rare cases). Distribution can compete with eCommerce players for many reasons, but defining your services leads to differentiation… for distributors and manufacturers (as, if manufacturers don’t determine “why them”, then share will continue to shift to lower priced manufacturers as most products are commodities).

8. Easy to do business with… more than omnichannel

There are many choices within the market… for anything. A key differentiator for customers is who is easier to do business with, especially if all else is equally or relatively equal. So, the question is, “How easy are you to do business with?” Ask your salespeople 1) how they view your company, and 2) how they think their customers view the company. And then ask your customers. Take away unnecessary barriers, become easier, and communicate the differences. Companies who achieve this gain customer preference, loyalty and advocacy.

9. Metric management

With growth tightening and gross margins eroding, metric management is becoming more important. As a friend once said, “People respect what is inspected.” Scorecards are nice but you need the right KPIs to drive each department and your company. Not too many so that they become watered down and your staff/salespeople become confused and therefore indifferent. Every department/role can be measured. Identify what are the keys to each area’s success to drive performance… and the performance of your trading partners. Metrics can drive sales and profits. Consider the steps to success, not solely the end goal.

10. Sales management drives culture

For distributors, sales (and hence salespeople) have been the thing. Many aspired to be in these roles as they are the marquee roles — the people who are respected, listened to or have the ability to break the rules. In essence, your sales organization and your sales management team, as well as the drive for sales, have defined the culture of most distributorships. While this can infer “customer focused”, the question becomes, “is the culture of yesteryear the culture you want to evolve to for tomorrow?” There may be elements to retain, perhaps many qualities should be timeliness, but people change, companies change and business models are unfolding that may make you consider a more inclusive approach. A culture to follow sales or a culture to generate sales?

And some marketing concepts that we believe will enable companies to accelerate growth:

    • Distributors who offer frequent buyer, loyalty, or customer retention programs and evolve these programs into value-based initiatives will outperform those who think that offering points solely for merchandise makes a difference.

    • Customer and contact segmentation and messaging will add value.


    • Integrative messaging adds value. Not everyone wants or reads everything on email. Breaking through the clutter is important.

    • CRM is gaining adoption as companies recognize that they need more contacts per account.

    • Sales is a team sport… but many salespeople haven’t realized this. As this cultural evolution occurs, compensation models will evolve (starting with new hires as well as new or enhanced sales models). eCommerce is only a minor element of this. Changing customer behaviours as well as generational issues, employment longevity, product training and more are redefining sales models.

    • Distributors need at least 3 levels of marketing interaction: key customers, growers who are underperforming assigned accounts and “overachieving” unassigned accounts, and branding and differentiation initiatives

    • Develop exception marketing reporting tools

    • Implementation of eCommerce / eMarketing initiatives that not only serve existing accounts and be of service to those who are “disconnected” from your company but companies with creative eCommerce staff can create alternative channels if their company is strong operationally.

Just some thoughts to stimulate discussion to get your year started. Perhaps for your management meetings; perhaps topics for your sales meetings.

What are you seeing as additional channel dynamics (beyond product-driven issues) that will impact your 2019?

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..

 

Westburne WOWLed by Divisional Lighting Manager Salma Siddiqui, the initiative will focus on making Westburne the workplace of choice in the electrical industry and beyond.

Results from research conducted by Westburne found that the electrical industry has a ratio of 3:1 of male vs. female employees. “Realizing these stats are the industry norm has made our eyes open and realize we need to make a change and showcase our women who work for us and at the same time make Westburne the place women would love to work for,” the company says.



Read More

 

 

 

Westburne and RockwellThe Authorized Service Provider designation enables Westburne to deliver Rockwell Automation services through their factory trained team of specialists. These services include installed base evaluation, network assessment, arc flash assessment, lockout/tag-out assessment, and start-up of variable frequency drives.

According to Steve Roy, Regional Sales Manager for Rockwell Automation Canada, “Customer expectations continue to evolve. Aging infrastructure, workforce gaps, global competition and an explosion of new technology provide endless opportunities for customers to improve their businesses.

Read More

 

IdeaIDEA plans to introduce an online learning management tool, the IDEA Learning Portal, to train customers on the new IDEA Connector, which will launch in late September. This portal will contain comprehensive training information and documentation on the IDEA Connector, a master data management (MDM) platform that enables distributors to securely access accurate and timely product and pricing data directly from manufacturers.

To complement the portal, there will be four training session devoted to manufacturers and distributors at eBiz. These training sessions will dive deeper into specific content to ensure a complete understanding of important functionality.

Read More

LFI Innovation AwardsThe celebrated LFI Innovation Awards marked the opening this week of the 2019 Lightfair International Trade Show and Conference with a dramatic showcasing of the industry’s most innovative products and designs introduced during the last 12 months.

The 2019 awards and trade show opening mark the 30th anniversary of the world’s largest annual lighting and technology event. The 2019 awards saw entries spanning 14 categories, with each submission judged by an independent panel of lighting professionals. Winning entries exemplified the best in innovative design and thinking. 

Read More

 

Automation LabourforceBy: Thomas Donato, Rockwell Automation

We all are consumers. We all have expectations of quality and service.

When I talk to our customers, I do so with that experience and mindset. If we don’t deliver – we lose. Maybe not immediately, but eventually. It’s as simple as that.

I just lived through a great example of this. Every morning I use our blender. One of the parts broke, and the manufacturer made it quite difficult and cumbersome to get a replacement.

Read More

Changing Scene

  • Prev
At Electro-Federation Canada’s recent Annual General Meeting in Quebec City, the Nominating ...
Pilz Canada officially opened their Canadian Facility surrounded by Industry Partners, colleagues ...
Dr. Jayson Meyers, CEO of NGen — Next Generation Manufacturing Canada — will present on the topic ...
Last week, over 540 industry members and guests gathered at the EFC Conference in Quebec City, ...
Cree, Inc. has completed the sale of its Lighting Products business unit, Cree Lighting, to Ideal ...
Kelly Hanson has joined Ryan and Chris Maguire as agency Principal. Kelly has an extensive sales ...
AD, the contractor and industrial products wholesale buying/marketing group, reported a 7% increase ...
Legrand has promoted Scott Bausch to Vice President/General Manager for the Wiremold product ...
  The OmniCable Toronto branch recently completed its first customer order after opening ...
The Hannover Messe Trade Fair in Germany, held this year at the beginning of April, is the world’s ...

Eric TeacherLiteline Corporation is pleased to announce the promotion of Eric Teacher to National Specification Manager for Canada.

Eric Joined Liteline in February as Regional Manager - Specifications for Ontario, Canada and quickly became an indispensable resource to the Sales, Marketing and Product Development teams. Eric has extensive experience in the Lighting and Controls industry.

 

 

Read More

 

 

Customer Service Leadership SummitAt the one day Customer Service Leadership Summit, pick up expert insights, advice and tips on how to grow your business, engage team members, and make price less relevant.

Here are four reasons you and your leadership team should attend.

1. Make price less relevant


You already know that in today’s commoditized marketplace, your #1 competitive advantage is your team’s service. And it’s one of the few things you have total control over.

Read More

 

ABB Showcases Its Vision of Leadership in Digital Industries at ABB Customer World 2019

Show ReportBy Line Goyette

Leaders and innovators from business, government and the education sector gathered for this ABB premier collaboration event. More than 11,000 delegates attended the bi-annual ABB Customer World Houston 2019 from March 4 to 7 in Houston, Texas. ABB’s latest pioneering technologies were displayed over 150,000 sq ft of a colourful, buzzy display of futuristic conveyor belts and robots, an ABB Formula E Generation 2 car, and much more groundbreaking technology.

Read More

 

 

Peers & Profiles

  • Prev
OmniCable was founded in 1977 by partners with deep experience in the US electrical marketplace. ...
On a regular basis, our publications profile members of our industry through their responses to a ...
First and foremost, sitting down with Susan Uthayakumar feels more like sitting down and conversing ...
Sales of electrical supplies from full-line electrical distributors capture the geographic ...
Laura Dempsey has been working as an outside sales representative for E.B. Horsman & Son for ...
Michael Gentile, President and CEO of Philips Lighting Canada, has had a long and distinguished ...

 

OmnicableOmniCable was founded in 1977 by partners with deep experience in the US electrical marketplace. With their clear understanding of the industry, they were able to identify an opportunity for the founding of a unique company. At the time, there was a disconnect between electrical distributors and electrical wire and cable manufacturers due to a growing demand that needed to be fulfilled under strict timelines.

The nature of the industry required a wide range of product types and configurations on a “just-in-time” basis. As a result, distributors were unable to stock enough cable products to meet the demands of their customers. 

Read More

 

 

 

BritechBritech Corp, one of Canadas largest heating cable companies has signed a formal agreement with Heat Trace Limited, of Cheshire, England. Heat Trace, founded in England in 1974, Heat Trace is one of the world’s leading industrial heat trace cable manufacturers.

The company is known mainly for innovative solutions in self-regulating high temperature heat tracing cables up to 275°C, their exclusive high temperature, 425°C, cut to length, industrial, in the field replacement for mineral insulated cables, and their high temperature Long Line heating cables that can be installed on pipes in one length up to 10 kilometers long.

Read More

Looking Back

  • Prev
The best memory I keep from CEDA is the way that they accepted me when I came into the business. ...
In the 1930s to 1940s, CEDA’s Western Canada membership was very stable with old line independent ...
Prior to the late 1950s there was little if any involvement in CEDA by the so-called “national ...
  As 2017 marks the 150th anniversary of Confederation, we take a look back at an aspect of ...

Copper $US Dollar price per pound

Kerrwil Publications

538 Elizabeth Street, Midland,Ontario, Canada L4R2A3 +1 705 527 7666
©2019 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