Distributors can certainly achieve success working alone, but the ones who embrace the opportunity to work jointly with manufacturers’ reps to leverage each other’s strengths and serve their customers’ best interests can move mountains.
Is your company simply threading the needle or are you actually moving it by driving joint activities with manufacturers’ reps that forge relationships, add value, grow sales and enhance profits? Below, our expert panel of industry sales veterans share insights on the joint sales efforts that they’ve found to work best, those that don’t and how distributors and manufacturers’ reps can best align for mutual benefit and success.
Current Areas of Responsibility
Greg Sundberg, United Electric (Jessup, Maryland): I started at United Electric as a sales trainee, and this is my 18th year with the company. I’m currently responsible for the sales and profitability of the region while directing and coordinating the outside sales team as it relates to the different product groups. Among other functions, I develop objectives and programs for sales and marketing activities while overseeing our project teams.
Bowen Welsh, Parrish-Hare (Irving, Texas): I’ve been at Parrish-Hare for 27 years and currently manage our outside sales team, oversee the inside sales team and work alongside our branch managers to ensure that the branches are successful.
Greg O’Brien, Denney Electric (Ambler, Pennsylvania): I’ve been in the industry for over 40 years, and this is my seventh year with Denney Electric. The vast majority of my career has been spent with independent distribution, but I also spent a year as a control sales engineer with a very large manufacturer, which was an experience that gave me much-needed insight into how manufacturers operate. My first job out of college was actually working in a warehouse position for a rep agency in Philadelphia, where I learned about electrical products, inventory control and shipping and receiving.
Dan Korthauer, Gordon Electric (Mokena, Illinois): I have 35 years of industry experience and have spent the last 20 years at Gordon Electric, where I oversee our organization’s sales and operations.
The State of Activities Pre- and Post-Pandemic
O’Brien: Since the beginning of and through the downside of the pandemic, most every aspect of our business was significantly affected. Denney Electric Supply learned how to adapt and not only survived but flourished. At the outset of the pandemic, it felt like all aspects of in-person engagement, whether with suppliers or customers, had come to a screeching halt, but over the last two years, we’ve seemed to get back to a sense of normalcy that’s similar to what we’d seen prior to the pandemic.
The market is craving a professional sales team that communicates well and is thinking about the customer’s business.”
Korthauer: At this point, our sales and marketing activities are at pre-pandemic conditions and both our internal and external personal engagement activities are back to normal.
Sundberg: From what we see, small and medium-sized contractors are mostly back to operating like they did pre-pandemic. Many of the largest contractors have a hybrid model or have many project managers working remotely. Customers want a good reason to spend time in person; health care facilities and other institutions are requiring more appointments than pre-COVID and Teams calls to resolve issues are much more common and accepted overall.
Welsh: Prior to March 2020, we believed that building true partnerships with vendors, manufacturers and contractors was the best way to go to market. Although we’ve had to make some changes relative to how we build and maintain those relationships, we still hold true to that belief during this post-pandemic period. During the pandemic, we maintained constant contact with vendors, manufacturers and contractors via Zoom meetings, conference calls and mail-outs, and our personnel in management, outside sales and inside sales continuously reached out to our customer base via phone calls, texts and email. We felt that it was imperative to remain relevant during such trying times. As some projects slowed or even shut down, we opened our doors to contractors, allowing materials to be shipped to and stored in our logistics facility until the materials could be transferred to the contractors’ jobsites. While our warehouse never shut down or missed a beat, all office staff who were working from home are now back working from our workplace. Our doors have been opened up for some time now to vendors and manufacturers and our goal in 2023 is to get back to conducting more new product training sessions in our branches and resuming joint sales calls with vendors to introduce new and labor-saving products.
The Benefits of Strong Joint Relationships and Conditions that Can Undermine Them
Welsh: The thing that gets in the way of joint calls being productive most of the time is poor communication—e.g., jointly pushing a product that’s not stocked or making commitments on such things as lead times, pricing, inventory levels, etc. prior to having a discussion.
O’Brien: Once you establish respect, honesty and open dialogue, it invites many growth opportunities and mutually beneficial relationships. The flip side of this is when you know that you’re not necessarily getting all of the information you need to be competitive (this would include higher prices than your competitors in an equally competitive situation) or bringing an opportunity to a rep and unfortunately finding out that they used your competitive information to potentially direct business to another competitor. I’ve seen this happen in the reverse as well.
Korthauer: A vendor with strong product knowledge and application expertise is an excellent resource for helping distributors close business. Bringing solutions to customers is very important to them and they’ll make buying decisions based on labor savings—a positive step which removes the opportunity for decisions based solely on the lowest price. Distributors and vendors who plan their calls with a desired outcome will be more likely to earn and foster mutual respect. Joint calls can get side-tracked, however, when vendor reps lose sight of the desired outcome and/or promote products that the distributor doesn’t represent.
Sundberg: A trusting and strong joint relationship between manufacturers and distributors allows for a more efficient resolution of problems and allows both parties to focus on what’s good for the customer. Without trust, salespeople can be hesitant to share all that they know about the accounts or future opportunities. I see this the most when large manufacturers’ rep agencies have a mix of products that aren’t aligned with what the distributor is stocking.
On Working Together to Jointly Grow Sales
Korthauer: I think that a strong vendor relationship is crucial to strong sales growth and that there are tremendous opportunities for distributors and reps to capitalize on that relationship for mutual benefit.
Sundberg: The market is craving a professional sales team that communicates well and is thinking about the customer’s business.
Welsh: In the Texas/north Texas market, there are endless opportunities for distributors and reps to jointly grow sales. When our customers think of products, especially IMARK products, we want them to associate those quality products with Parrish-Hare and for our name to be the first one to pop into their heads. The best way to accomplish this is through joint sales calls with reps and manufacturers.
O’Brien: There always have been, and will continue to be, ways that distributors and reps can positively interact and work well together. Most of this is based on trust, long-term relationships and familiarity.
The Most Important and Effective Joint Activities
O’Brien: From our experience, the most significant joint activity involves making in-person sales calls with a trusted and respected rep agency salesperson because it allows for a common bond to be established—not only between the individuals, but between their two companies as well. Denney Electric is very invested in ongoing training for our employees, so the second most valuable activity on our list would be training for our sales team offered by a manufacturer and/or rep agency. In general, promos, spiffs and counter days must be well organized and monitored/monetized for results, as no one wants to waste time or money (marketing funds) without positive results.
Sundberg: Joint calls are most effective at changing or reinforcing customer behavior. A highly aligned distributor and manufacturer combination sends a strong message to the customer that their needs will be taken care of and that any issues will be resolved quickly and professionally. Joint calls at jobsites give everyone a good opportunity to identify business that’s mutually beneficial while gaining access to and establishing relationships with future leaders within the customer’s company. United Electric doesn’t participate in spiffs, as we have a highly directed sales team and prefer to have sales management direct the sales effort. Counter days are mostly a thing of the past, as customers see less value in having their employees out of the field for an extended time. The best return on time invested comes from a targeted strategic plan being executed and adjusted as necessary along the way.
Welsh: Joint calls and training tend to be the best and most productive joint activities we offer; anytime we can be seen and heard along with our vendor partners, the more our customers associate us with that product line, which in turn generates calls and emails. Promos/spiffs and counter days are good ways to promote our partners and their products, but these can be costly and can easily fail if not planned and marketed well. In fact, even some of the best-planned and best-marketed counter days fail, as you can’t control the weather or other external elements that might draw attention away from these events.
Korthauer: We’ve had great success with an annual vendor trade show we run that’s geared around an Oktoberfest theme, which both our vendors and customers look forward to each year. While we didn’t hold the trade show in 2020 during the pandemic for safety reasons, we had record attendance in 2022. During this event, we encourage chosen vendors to promote and demonstrate energy- and labor-saving products, and vendors who attend are able to visit with many decision-makers within a two-hour window. Their return on investment is outstanding and we in turn will add specific products to our inventory based on vendor and customer recommendations.
The Most Effective Ways of Working Together
Welsh: Prior to working jointly, the vendor should know the contractor’s needs as well as the distributor’s capabilities, and any pricing or discounts should be discussed prior to any meetings, training or lunch & learn events. It’s also imperative that the vendor rep is knowledgeable about the product being discussed as well as its availability, origination
and shipping point. I generally like to do an in-house training session or lunch & learn with our inside and outside sales team, make any adjustments as needed with the vendor and then take our message to the contractor.
Korthauer: Vendors/reps that schedule distributor calls, come prepared with an agenda and offer a guaranteed sale on new products are far more likely to have a successful visit. Since the pandemic, vendors that practice a “milk route” strategy or drop in and say “Hi, I was in the area” are often given little or no time, so that’s a definite don’t.
O’Brien: In order for any relationship to be effective, you need to have an open and honest dialogue and trust in one another. Quite simply, there’s not a lot of wiggle room outside of a good and honest relationship.
Sundberg: I’d advise reps to think about new and innovative products that specifically apply to the customer’s business and measure labor savings so that you can quantify the value of the product offering. Share targets with the distributor where the manufacturer may be struggling so that we can work on their behalf and be up-front and transparent about existing relationships so that we can work in a way that truly grows market share.
Reasons to Invest in Joint Sales Relationships
Sundberg: Distribution salespeople are closer to the customers and can more quickly identify opportunities. We focus on reducing the customer’s risk, making their life easier and increasing their profitability and competitive advantage. If manufacturers have an offering that fits into these core purchasing drivers, we can leverage our customers’ trust and advanced logistics to drive market share growth.
Welsh: The strongest tool in our tool belt is our relationships with our customers, vendors and manufacturers. If we leave our strongest tool in our tool pouch, we’re doing ourselves and our business partners a terrible injustice. Parrish-Hare takes pride in the fact that we provide only the highest-quality materials purchased through top-line manufacturers and reps and we look forward to a year of action in 2023 with all of our partners.
O’Brien: At the end of the day, relationships matter, but since this is a sales and profit-driven business, there has to be a benefit for both parties. Nothing more, nothing less.
Korthauer: Distributors who invest time with vendors and do it smartly and efficiently will be rewarded with product, support and technical service—three keys to sales growth and success.