Manufacturers: Contractors are expecting more from you. Are you delivering?

November 19, 2014

Progressive contractors, I believe, are changing the way they are interacting with their manufacturers. When I ran across this research recently, it verified in my mind that it holds true. I only wish the Electrical and Plumbing markets would do similar research.

hdlogo

HVACRBusiness recently released a new research study, “HVACR Contractors: Trends in the Adoption of Products/Systems & Management Approaches,” (for a free copy of executive summary click here), that highlights new trends on their involvement with manufacturers. I did a podcast interview with Terry Tanker, the publisher, to talk about the results of the research.

Bottom line – 70% are more likely to evaluate additional manufacturers and their products. You can’t depend on your sales rep going to see them personally to introduce a new product. By the time they get there, the contractor may be well down the selection process. Contractors, no matter what kind, are looking for good information, not a sales pitch, but information that can help them do their jobs. If you can do that, it will help keep you in the game.

Here are some highlights.

They define a “High Yield” contractor as being more active in managing their business, have substantial revenues and are experiencing significant growth. In other words, The “A” players in the field.

  • 93% get involved in the early stages of the selection process of new products.
  • Contractors have even greater expectations for products/systems than 5 years ago.
  • Contractors are expecting manufacturers to do more to help them compete and operate efficiently.
  • The selling environment has become more businesslike and competitive.

The bottom line is that these “High Yield” contractors have made significant changes in their relationships with their manufacturers and expect more out of them. Among them the top three are:

  1. Making manufacturers more accountable for their products/systems.
  2. Offer more support.
  3. Make more objective decisions about products/systems/brands.

 


Manufacturers: How’s your 2014 shaping up?

November 5, 2014

If you listen to the media, we all should be fat, dumb and happy since business is just rolling in and we can’t handle it all. I know housing starts are at an all-time high since 2008, road and bridge contracts are now being released, automotive production in this country is setting records and most industrial indicators for manufacturing are on an upward trend.

So saying all of that, how are you doing? Most of our clients (manufacturers) are having modest growth but have a hard time figuring out why (getting new business or stealing it from competition).

Would you be so kind as to take a one-question survey?


UPS B2B Purchasing Insights Very Enlightening

October 29, 2014

UPS

UPS recently released a study they did on the behaviors, preferences and perceptions of industrial supplier performance.

Industrial distribution was once dominated by family owned companies built on personal relationships. Things are changing, and now suppliers (whether they are distributors or manufacturers) need to be not only aware of, but be a part of the online movement.

The UPS study surveyed 1501 online. The respondents were either sole/joint decision makers and the survey included only stock only products (no special orders). Annual spends ranged from under $50,000 to over $250,000.

Here are some insights from the study that I found interesting:

  • 40% of those surveyed were only on the job for less than a year.
  • 23% were on the job less than 5 years.
  • 50% of purchasers say having a catalog and sales rep are important in making a decision.
  • More that 50% are making purchases online.
  • 33% of purchasers spend most of their budget online.
  • 34% say they go outside their existing supply base to make an online purchase with a new vendor.
  • Preferred research methods for new products were websites and search engines.

Are you still with me? So what does that me for you? It’s an opportunity for you to keep the business you have and expand outside your normal trading areas. Yes, buyers are concerned about quality, availability, price and delivery. But they are also interested in an integrated system that makes the buying process easy — from picking a product to making hassle-free returns.

Suggested action items from the survey:

  • Online selling is changing they way people buy things — embrace e-commerce (but not exclusively)
  • Continually improve the customer experience — make it easy for them to purchase from you
  • Be in the right place at the right time — utilize SEO (search engine optimization) and SEM (search engine marketing) to make sure people find you when they are looking

Care to share what you’re doing online?


Customer Loyalty: Does it Exist Anymore?

October 15, 2014

I know we all want to have customers that only call us and never quibble about price. I guess we need to wake up. Years ago you could build customer loyalty, but today I really wonder if it holds true anymore.

If you’re a manufacturer who sells through distribution, you have a double challenge—to keep both the distributor and user happy. The question is, where do you spend your time, the distributors or users? I guess the answer to that question will be different for all of us, but I think we all agree we need to spend the time building loyalty where it will make the biggest impact on sales.

My guess is for those who are looking to get to the professional tradesman, the best way to do that is to have a strong relationship with the distributors, who in turn have customer loyalty with the tradesman.

Yes, there are some iconic brands that have a great end-user preference, and hats off to those that have. But those numbers are a small percentage of the total. These folks, while we will envy them now, will, I believe, have a similar issue down the road when all the oldies (50 plus) get out of the business and the younger generation doesn’t value the loyalty card as much as the older generations.

No matter what avenue you choose to foster loyalty, there are some basic guidelines that need to be considered:

  • They need to know, like and trust you - Without that, you will have an uphill battle, and it will take time.
  • Make them your top priority – Back it up by having someone treat them like a key account that they are.
  • Spend time with them belly button to belly button - You can build a relationship via emails.
  • Not everything you’ll do results in a sale - Help them out whether it’s tech support or customer visits. Make them look like a hero.
  • Under promise and over deliver - Folks remember those that go the actual extra mile.
  • Show them you do care – Customers stop doing business with people because they have the perception of indifference. Send them a handwritten note or a copy of an industry article that would be relevant.

I’d be curious, for those who sell through a distribution channel, where do you focus your efforts? At distribution or the end-user?


Manufacturers: Are You Missing Out On Video Opportunities?

October 14, 2014

Video is one of the most powerful tools in your marketing toolbox. Why aren’t you focusing more on them?

A recent study from eMarketer showed that even though consumers wanted more video, 75% of U.S. marketers said videos are not a priority, and nearly half said they had no plans on increased efforts this year.

According to eMarketer, consumer-branded video increased over 16% from January to June 2014 to almost 3 billion views a quarter.

We’re a visual society with a 30-second sound bite mentality. Why not use video to deliver your message in a different way? In today’s world with the use of smart phones and desktop editing suites, compiling a video isn’t hard or expensive anymore.

The more successful videos have to do with a single subject and usually run under 2 minutes in length. And, if appropriate, add a little humor (everyone likes to laugh). Manufacturers have plenty of options for using video. Instructional how-to videos, training sales/reps, new product intros and testimonials to name a few.

Next to Google, YouTube is the second biggest search engine. Let potentials find you. Obviously the demand is there. Don’t be left on the sidelines.

If you like this, you may want to read:

Have Your Videos Gone Viral?

Why Videos are Such an Important Way to Reach the Professional Tradesman.

B-to-B Marketers: Are you Taking Advantage of Online Videos?


Manufacturers: Are You Buying Into Alibaba?

October 7, 2014

alibaba

I know we’ve talked in the past on manufacturers using the likes of Amazon Supply to make your product available through another distribution option. Many of our clients are using Amazon Supply along with their traditional distribution, but until a few weeks ago, I never heard of Alibaba until they started trading on the NYSE.

For those of you who may not know who Alibaba is, it’s a giant e-commerce site started in China and has received traction worldwide. Its model is to build relationships between manufacturers and their customers. Its model is not to sell anything, but to just hook up the right user with the right manufacturer. They get paid by the manufacturers to coach them on how to be more attractive online to potential buyers. As they grow in this country, it will be essential that manufacturers get on the bandwagon because of the size of their network.

I recently read an article by Bridget Bergin, associate editor of Manufacturing.net, Amazon’s Involvement with Manufacturing: Is it too much? where she talks about Amazon testing some new models that will get them closer to the consumer.

One is Vendor Flex (where they are setting up shop in P&G facilities and ship direct out of there) and AmazonFresh (where they set up a program with food producers to deliver items directly to consumers).

I think the key point Bridget is trying to make is that both Alibaba and Amazon want to take over the customer relationship. Where will that leave you? Where does that leave your current distribution model? I certainly am not saying that all power transmission parts are going to be purchased online, but all signs are pointing to more and more purchases, even in the industrial sector, being done on the internet.

Who will have the ultimate power of the purse? Down the road, when someone buys a hydraulic fitting from a supplier, Amazon may pop up and say people who buy this normally buy hose too. If you’re a hose maker, will it be yours they are pushing? This should be interesting.

As a point of reference, before reading this article, did you know what Alibaba was?

Please answer these quick questions below.

Thank you!


We’ve Always Done it That Way!

September 9, 2014

OutsidetheBox

I cringe when I hear someone say that phrase. Past actions will not ensure future success. Manufacturers who have this mindset are missing out on many opportunities. You literally need to think outside the box.

In today’s market, there are so many other options to consider. Some may not be appropriate for you, but you have to evaluate and pick the ones that might be useful for you. One basic change we all need to make is change how we reach out to potentials. If you’re trying to sell features/benefits to a prospect, you’re going to disappointed.

Here are some tips to consider:

  • Take a different approach - Instead of talking about you, help your customer solve a problem. Always answer the question from your customer’s perspective of  “What’s in it for me?”
  • Friendly website - If you count on your website as a way of selling your brand, come at it from a customer’s perspective and make sure that your site is responsive (have different versions for smart phones and tablets). Make it easy to find what they are looking for.
  • Limited social media - Most manufacturers don’t need to utilize all the options that are available to you. You should focus on those areas that will bring you the most bang for the time you have. You already may have existing things like how-to videos (YouTube) or Power Point presentations (SlideShare) on the best way to solve a particular problem. If you’re in specific market segments, join and participate in the conversations (LinkedIn). If you have the resources, starting a blog would be an ideal way of setting you apart from your competitors and putting you out as an industry expert. Places like Facebook and Twitter, for the most part, are not ways to communicate with contractors and professional tradesman.

The key is to do something different, and as I’ve shown you here, in most cases you don’t have to reinvent the wheel. You have valuable info and insights on how to solve your customer’s problems. Don’t keep to yourself – share it.


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