Somewhere, somehow the electrical market affects everyone. A homeowner turns off a porch light after saying good night to a visiting neighbor. A utility crew repairs a downed power line during an ice storm. A baker in a small town turns on an oven at 3 a.m. to get ready for the early-morning rush.
Before you even wake up in the morning, thousands of the products you sell have somehow affected someone in the world. By lunch, you could count a million more examples. Most of the thousands of different products you sell are quietly and efficiently doing their jobs behind building walls, in ceilings, crawl spaces or attics, or buried underground without most people ever noticing.
You notice. Every electrical or electronic product or system in use results from a successful sale. Someone, somewhere, somehow sold that product or system to a person whose company installed it or had it installed for them. The salesperson's old battle cry, “Nothing happens until somebody sells something,” rings true in the electrical business, too, although it could be modified to say, “Nothing turns on, lights up, moves, or gets manufactured unless an electrical system is doing its job.”
That concept makes pretty heady stuff for an electrical marketer hungry for another sale. Major sales opportunities exist here — building, repairing and renovating the entire electrical infrastructure of the civilized world. Electrical distributors supply products for the electrical systems powering houses, apartments, strip shopping centers, Main Street America, offices, factories, churches, schools, universities, utilities, sports stadiums, roadways, parking lots and dozens of other applications.
In any building and on any street you find electrical products sold by a salesperson for some electrical distributor. You live in this world. It's a market worth billions of dollars in products alone. In the United States almost 80 percent of it gets sold through electrical distributors, according to EC&M magazine's most recent Brand Preference Study. That statistic may surprise some people. Home Depot and Lowe's seem to be moving onto every suburban highway retail strip. You hear cries about the demise of the wholesale-distributor function because of the wonders of electronic commerce. Others worry about the occasional manufacturer that decides to market its electrical product line direct. Yet, electrical distributors are still the primary channel to market.
Distributors of electrical supplies will sell over $72-billion plus worth of electrical materials in 2002 through an estimated 8,000 branch locations to electrical contractors, facilities maintenance personnel, utilities, other commercial, industrial and institutional customers, and to a lesser degree, homeowners.
That's a big and steadily growing market. Want a bigger piece of it? Read on. Beginning with this issue and continuing each month in 2003, the “SalesSurvival Guide” will help salespeople new to the electrical market and industry veterans who want to brush up on the basics and polish their sales skills. In this new EW series, you will learn about all facets of the sales game, including mining a database for new customers, making more effective cold calls, overcoming price objections, launching new products and making joint calls with manufacturers and reps.
This month's article offers an overview of the team that works at a typical electrical supply house. It's pretty basic stuff, but it sets the scene for this series because it shows how salespeople fit into the big picture at an electrical distributorship.
A WALK THROUGH A DISTRIBUTOR
Let's take a look at the most common job functions at a typical electrical supply house.
You will meet counter workers first when you walk through the door of the typical electrical distributor. A distributor's counter workers often spend more time with customers than any other employee, and in this role they influence customers' buying decisions.
A counter worker's job compares in many ways to that of the sales clerk at your favorite hardware store. You probably go to the hardware store when you want to solve a problem on your “honey-do” list and then move on to something more entertaining. When you find the product by yourself, the sales clerk simply rings you up. But he or she can answer questions or give advice on which product will do the job for you, if you need it.
Counter workers do pretty much the same thing in the electrical market. Much of the time customers know exactly what they need. But when a customer has a question or problem, good counter workers know how to listen to the problem, size up the situation and make a recommendation on the product that will do the job. That requires an encyclopedia-like knowledge. Good counter workers know which manufacturer's products will work in an application or can be substituted for another vendor's product; which new products may fit the bill; and they know a ton of other product- and application-specific information regarding the stocked product lines.
These employees also check stock, availability and pricing of products, as well as pull orders from the warehouse. Counter workers may also maintain point-of-purchase (POP) displays in the counter area.
Never more than a few steps from the counter area stands a warehouse, stocked with up to 10,000 to 15,000 stock-keeping units (SKUs) from 100 to 300 different manufacturers. Warehouse workers check stock in at the receiving dock, put it away and stage orders. A common stop along the road to sales and management for many distributor employees, this job gives employees a good feel for the flow of products through the company, where they are stored, and the company's procedures for shipping or filling orders. This part of a warehouse worker's job hasn't changed much over the years, but bar-coding has changed the job descriptions of warehouse workers. Instead of enduring laborious cycle counts, where warehouse workers have to manually hand count all products in the warehouse, bar coding enables them to use a bar-code reader to simply scan a label on the product or bin location and then enter the number of products.
At the loading dock where the day's outbound orders get staged for delivery, you will meet the truck drivers. These distributor employees carry a heavy load in addition to the product in back of a truck: They personify the company slogans many distributors use to promote themselves: “Dependable service guaranteed,” or “What you need when you want it.” If truck drivers cannot live up to the delivery promises their companies make, if they deliver products damaged in shipment, if they are rude or habitually late with deliveries, they can quickly destroy their companies' reputations as dependable sources of supply.
Many distributors use a truck driver position as a rung on the ladder an employee must climb to make it to sales or management. They want employees to learn how to get to customers' facilities, how they like products delivered or packaged, and the importance of prompt delivery.
Like counter workers, truck drivers spend quite a bit of time with customers, and they have a tremendous influence on the customer's impression of a distributor. Late or incomplete deliveries, surly behavior and sloppy packaging can destroy a distributor's reputation. On the other hand, a conscientious driver on the front line who takes pride in getting orders delivered on time can be a tremendous asset to a distributor.
Now let's meet some of the key employees who work in the office at an electrical distributor. The manufacturer's field salesperson or an independent manufacturer's rep wants to meet the purchasing agent first, because he or she buys the products that the distributor stocks. It's their job to be on top of current product pricing in the market and manufacturers' special purchasing arrangements. If a distributor belongs to a buying/marketing group, that purchasing agent will take direction from company management on which vendors to buy from. Buying/marketing groups wield tremendous power in the electrical industry. They enable distributors to pool their purchasing power so they get volume discounts or rebates based on annual purchases from participating manufacturers. In addition, the buying/marketing groups help members improve marketing and management skills by providing opportunities to network with noncompeting distributors and to learn about these topics from top-flight instructors.
THE SALES TEAM
Just a shout down the hall from the purchasing department is your domain. You will find the inside salespeople, who take orders over the telephone, fax and e-mail as well as provide customers with answers to technical or applications questions and update them on order status. Many distributors team an inside salesperson with a field salesperson. In this arrangement, the inside salesperson handles the nitty-gritty details of order tracking and much of the related paperwork, while the field salesperson focuses on finding new business. In another common arrangement, inside salespeople specialize in certain product areas such as lighting, motor control or wire and cable.
Inside salespeople play an increasingly valuable role at electrical distributorships. Along with their traditional duties, more often than in the past, they have become a customer's first call and primary contact. That's because computer technology has given the inside sales force electronic access to virtually all the information needed to complete a sale: product specifications, pricing, ordering and delivery. While field salespeople will continue to be a valuable resource for customers who need or want in-person visits from a salesperson, don't be surprised if you see more end users relying on inside salespeople as their main resource in the future.
You may also meet telemarketers. They spend much of their time making cold calls to potential accounts to introduce them to the distributorship's package of products and services or servicing accounts that don't frequently buy from the company, and really don't need a salesperson calling on them in person.
If a distributor's outside salespeople are doing their jobs when you visit, you won't find them at their desks in the office — they will be out in the field calling on customers. The role of the field salesperson at a distributorship is changing fast because of new and increased customer expectations and technology. Gone are the days when a distributor's salesperson could get an order just by showing up with the gift of gab, a good shoeshine, a firm handshake and a box of donuts. Few customers these days have the time for small talk, and more often than not they don't even want to see a distributor's salesperson unless he or she can provide a solution to a problem.
The world of e-mail, pagers and laptops has also changed life for distributors' salespeople. Customers may not want to see salespeople as often as in the past, but when they need answers from them, they want those answers immediately. The salesperson must remain accessible to customers 24-hours-a-day — and have the right answers when customers need them.
Not all of the field salespeople in the electrical industry carry laptops, and the people equipped with them don't always use them as effectively as they could. But few people would argue that a laptop loaded with communications software, a contact-management database and some product application software can help a salesperson become more productive. Laptops can help salespeople provide quick, accurate answers to customers' questions on order status and technical product applications.
Not far from the sales and purchasing departments you will find the branch manager. Some distributors put their branch managers' offices near the counter area so they can greet important customers when they come in.
The branch manager at an electrical supply house plays a role like the coach of a baseball team. He or she manages the players at all of the key positions, such as inside and outside sales, credit and collections, warehouse, and other types of sales support.
Whether it's a four-employee “twig” location fed with products and information from the company's headquarters or a monster branch with several dozen employees, the branch manager ensures that the location operates smoothly.
Some distributors also believe that as the person closest to a local market's economic cycles and customers' unique product preferences, the branch manager should decide which product lines to stock and how much inventory of those products to carry. Other companies prefer to make these decisions at headquarters. The branch manager can then focus on servicing customer needs and managing the branch personnel. Many companies offer their branch managers special incentives to keep operational costs down and to hit specific net profit and sales targets. That's one of the reasons some electrical distributors call branch managers profit-center managers.
Credit and collections personnel are key players at a branch, too. They provide the branch manager with the vital information he or she needs to keep the branch running profitably. Good credit managers spot the red flags at accounts before they develop into major problems.
Depending on the size of a distributor, it may or may not employ some other key employees. As a distributor grows more sophisticated in its business operations, it may invest in a marketing director. In the past, “marketing” at an electrical supply house amounted to a part-time job handled by an administrative assistant, college kid home on summer break, or someone else the boss decided had some extra time on his or her hands.
Today, it's a full-time position. An electrical distributor's marketing director promotes the company in the local community; organizes counter days, trade shows and other special activities; gets cooperative advertising dollars from manufacturers; does market planning; and, if the company belongs to a buying/marketing group, works with it on promotional or marketing programs.
In the mid-1990s, some distributors began employing a quality officer. If a distributor commits to improving its business practices through the Quality Process or by obtaining ISO certification, someone with this title on his or her business card probably works at the company.
The Quality Process first became popular in the electrical business in the late 1980s. The concept behind it: To improve service and reduce transaction costs by breaking down the workflow into a series of definable, measurable steps, then finding ways to eliminate errors or otherwise improve the process.
A quality officer may also prepare the company for ISO certification. ISO focuses on a company's written quality policies and how those policies are implemented in day-to-day business. It requires the company to have methods to control its various processes — such as purchasing, order entry and shipping and that those methods be understood, documented and followed by everyone in the process.
Customers in the industrial market often look for ISO-certified distributors because they believe this certification cuts down on the potential for errors in shipments and proves a distributor embraces solid management practices.
Not all distributors may have the MIS or computer systems manager as a full-time position. In the past, distributors tended to give the job to the person at the company who seemed the most computer-literate, or to a son, daughter or other relation who had a knack for all things technical.
It's not that easy any more, particularly for a large distributor. More likely than not, the MIS manager at a large distributor maintains the computer link between branches and the main computer, monitors the usual computer crashes and other daily computer crisises, keeps the sales forces' laptops on the same software releases, gets the company running on EDI, ensures that the bar coding system is working and maintains the company's Web site.
Editor's note: Much of the material for this month's article was excerpted from “The Electrical Marketer's Survival Guide,” published by Primedia Business Directories and Books. For more information on this publication, check out www.buyprism.com.