When Electrical Wholesaling's editors decided to survey thousands of electrical contractors and other end users about the state of distributor-customer relations, we expected a nice, tidy little research project that would offer a current snapshot of what's really hacking-off their customers these days. What we didn't expect was a deluge of rants, raves and well-thought-out suggestions from more than 400 electrical contractors and other end users. The survey also offers some real-world insight into just how concerned end users are about the still-horrendous state of the construction business in many regional markets, and shows electrical contractors and other end users are looking hard at renewable energy and other emerging green technologies. You will be able to learn from their responses and can use them to fine-tune your company's customer service.
Business prospects for 2011. A solid majority (66 percent) of the survey's early respondents are expecting 2011 business conditions to be either flat (37 percent) or show single-digit growth (29 percent). No overwhelming regional patterns in end users' 2011 business forecasts were apparent in the survey's 427 responses. For instance, 10 respondents from California expected double-digit increases in business in 2011, while four respondents forecast double-digit declines. One of these California electrical contractors, Matt Stewart, Harris Electric, Fresno, Calif., sounded pretty frustrated with the Golden State's economy, and said he didn't see any big construction projects breaking ground in his market area. He responded, “In California we have elected nothing but idiots. Our environmental laws will kill us all. Are you accepting applications?”
The second chart on page 17 offers a glimpse into the types of new technologies that respondents believe will offer the best opportunities for new growth in 2011 and beyond. As you can see in this chart, lighting retrofits were particularly popular. The second part of this article, to be published in EW's February issue, will offer more insight into new projects scheduled to break ground in 2011, big lighting retrofit jobs, and new projects in the solar, wind and geothermal areas.
Service basics. You might think that in a rough economy all customers care about is getting the lowest possible price, but respondents to this survey said they value product availability more than pricing, and that ease of doing business is also really important. As you can see in the top chart to the right, the respondents' focus on what should be some pretty basic aspects of customer service comes through loud and clear. For instance, while it would seem like something salespeople at any distributor's counter area would learn during their first day on the job, many respondents said they are frustrated with how long it takes them to simply pick up an order. In today's economic climate, time is money, and contractors said they can't afford to waste time catching up on local industry gossip, kibitzing about last night's game or munching on free donuts.
When asked, “If you had all of the electrical distributors in your market sitting in the same room for 20 minutes, what would you like to tell them about how they could do a better job of providing electrical products or services to your company?” an Ohio electrical contractor who requested anonymity summarized many of the customer-service concerns respondents have with electrical distributors. He hates it when he is told over the phone that a product is available and has a worker drive to the branch only to be told the product is out-of-stock. “That BS does not work for me or my customers,” he said. “Price is important, but not everything. Treat us fairly and provide prompt service. And when I place a next-day air order, place it immediately. I know it costs more, but I'm willing to pay for that. Your delay in placing a special order makes my commercial or industrial customer lose a lot of money.
“Some guys like myself will try out a new distributor and get charged retail or ‘happy homeowner’ prices. That's not how to earn my business. And when it's busy send extra help to the counter. I do not deal with two low-priced distributors in my area because I can't afford to stand waiting for a counter guy for 45 minutes. They cost me much more than their lower prices.”
Some respondents took a long-term view on the changes they see in their relationships with electrical distributors. Oftentimes, these changes apparently haven't been for the better. Said Robert Funk, Funk Enterprises Inc., Lake Elsinore, Calif., “Communication, organization and pricing seem to be missing in the last 10 years. Sales forces have gotten sloppy and managers seem to have lost their edge. It used to be that when a problem occurred, I could ask the manager for some assistance. Now it seems that the manager doesn't have the pull they used to.
“Quit trying to be our friends and get to work. If we end up being friends, it's because I don't have to watch everything you do and don't need to check your prices every month against another competitor. It would be nice to know you're not looking for every opportunity to take advantage of this horrible market by making 50 percent on small items, justifying it because you only make five percent on the large-ticket items. Sooner or later all of my business is going to go to the people who can make me most comfortable with them.”
Robert Butterfield, Butterfield Power Quality, Shelbyville, Ind., has been in the electrical business for 35 years. He has seen a deterioration of stocking levels and basic service, as well as order accuracy and fill rates.
“Stock more inventory at each location,” he said. “Every time I place an order even though I may be less than a block away from a branch, the distributor won't have a complete order and I'll have to wait a day or drive to the main branch.
“I'm a cash customer so I don't feel obligated to any one company. If you don't have it or its price is too high, then I'll go somewhere else. In a lot of instances Lowe's is considerably less costly for the same products. When picking up an order I have to go through it carefully due to shortages or incorrect items such as 1½-inch conduit with 1¼-inch fittings or visa-versa.
“Materials ordered not arriving when scheduled is a killer, particularly if I have to drive far to pick it up and then find out it didn't come in, even when I called ahead. I can't charge customers for time spent chasing materials that didn't arrive on time. I'm the customer and I'm not looking for excuses — I'm looking for materials. I know I'm a small commercial contractor and the larger customers get priority and better pricing, but have your company hold your paycheck for another month because of some lame excuse and see if you like it. These problems are across to board with all suppliers. Believe me, after 35 years I know. I wish I could back charge for all the time lost dealing with supply companies' problems. Maybe I could retire before I die.”
Laundry lists loaded with ideas. Several electrical contractors weren't shy about providing electrical distributors with long lists of ideas for improvement in customer service, and many of them were really insightful. Read what Greg Dart, Grider Electric Inc., Stockton, Calif., wants to see from his electrical distributors.
Form a team of contractors to advise you. Before making big changes or changing lines survey this team.
Corporately, let your local guys have more authority to choose stock selection and levels. Do not make data or accounting system changes without real-time, real-customer beta testing.
We are all under staff shortages, I understand. But suppliers like Grainger roll phone calls to a salesperson wherever available in their system seamlessly. I have had the operator at the local branch of an international wholesaler apologize that there was nobody in the office who could write an order. Develop support systems to spread the load and provide a guilt-free way to ask for help.
Sam Lloyd, an electrical contractor from Mars Hill, N.C., spoke for many electrical contractors with the list of questions he provided in his response. Here's what Lloyd wanted to ask distributors.
Can I buy your stuff online and have it delivered?
Why are there different prices for large versus the small contractors? Instead, why not have a reward system for the amount yearly purchased?
Can I have a system like a credit card and see it online so I can see my whole account and then see purchases instantly?
Why do I have to wait so long at the counter when I could help myself in a self-serve style, and then have a counter that filled the specialty items?
One electrical contractor, Darrin Bacon, Air Systems Engineering Inc., Tacoma, Wash., had a bunch of interesting observations on the state of contractor-distributor relationships and offered some common-sense solutions to improve them. Here's what Bacon had to say:
Think ahead and make suggestions for add-on items. Very often we forget the small things. Like if I purchase an LB fitting, be sure to offer the cover and gasket, etc. Don't make assumptions on materials. If a contractor asks for something, be sure you understand what he's saying. The electrical industry is filled with pet names for products. Too often our crews have been held up because an order was filled wrong. Perhaps a few inventory kiosks with intuitive cataloging for customers' use would be a good step. Then the customer could find what they need and show the counter salesman what they're looking for.
Trying to out-think a contractor is a mistake. Oftentimes a contractor may have an approach that isn't instantly understandable. When the wholesaler makes assumptions or tries to correct the contractor by filling the order with something they think is a better choice it can really hold up a job. Sometimes the smallest wrong part can be pivotal in the profitability of a job. A wholesaler needs to remember that they are a big part in a path to a profitable project. If they botch the order and it happens too often, it will greatly impact the contractors' bottom line. Eventually it will impact the wholesaler's ability to keep the doors open. Locally, there are two big-name wholesale houses that we will not do business with (unless there isn't anywhere else to go) because they are too hard to work with and make too many mistakes.
Learn how to accept responsibility for the order and customer satisfaction. Each person should feel deeply responsible and accountable for their customers' orders. Learn how to accept responsibility for problems and what to do to fix it. Most wholesale employees and managers need to go through regular customer management training that teaches them proper language, body language and dialogue to serve their customers better. I'm sure a lot of wholesalers think that the “good old boy” approach is best. Most contractors don't have time or money to spend on labor for BS. Stay on task, be polite and interested, but stay on task. Ask questions for clarity and get the sale over with accuracy. Sidelining the process with discussions about the next hunting trip and last weekend's party will likely slow down the visit and cause something to be filled wrong.”
The need for online pricing, product and delivery information. The many requests in the survey for online purchasing were interesting because it reflects a market conundrum. The majority of respondents said they purchased less than 10 percent of all products online, but one has to wonder if that relatively low percentage is more of a reflection of the fact that so few electrical distributors offer online purchasing than it is a lack of demand from end users for online purchasing. Judging from these survey results, end users want online purchasing and they are already doing it with the competitors of full-line distributors that do offer it, including Home Depot, Grainger and Lowe's.
Said Patrick Murray, Murray's Electrical Service, a small electrical contractor based in Elk Grove, Calif., “Would you please get up to date on current technology? Online pricing and account info is only offered by one of my suppliers. Even Home Depot offers online purchasing information whether you have an account or not. Home Depot has 90 percent of what I use daily with better pricing, more locations and quicker service than any wholesale house I have an account with.”
Martin Hutchinson, Ramco Electrical Co. Los Angeles, Calif., had a related concern. He wants electrical distributors to use modern warehouse technology to cut down on wait time at the counter. “When I get to the wholesale house, I'm generally short on time and waiting for service or waiting for them to tally up the cost of the order takes too long,” he said. “Why can't the UPC system be used so when they pull the stock, they use a portable scanner, scan the bar code that has been placed on the bin, add the quantity and download it to the register. I verify, pay or sign and I'm on to my next job. What seems to be lost at most wholesale houses is the fact that I'm losing money waiting there.”
Summary. One Kansas electrical contractor did a really nice job of summarizing many of the customer-service lessons learned in this survey when he said he would love to have a distributor who had the best qualities of all the electrical supply houses from whom he buys. “They all have unique qualities that make them effective. One has a great website and inside sales staff. One has great prices and convenient location. One has a great staff, excellent delivery and good prices. I would like to be able to get one that has all of those qualities.
Next month's article will cover end user interest in new markets, trends in online purchasing and other critical aspects of the distributor-contractor relationship.
Your Customers Speak Out
While some of these topics have already been discussed in the main text of this article, the verbatim responses from electrical contractors and other end users on them are priceless. They also provide Electrical Wholesaling's readers with a real-world roadmap of feedback from distributors' customers on how they want to be serviced.
Low Prices aren't Always Paramount
“If my order is wrong or incomplete it costs me far more in lost labor than the actual cost of the parts.” — Aaron Lane, Fresno's Best Industrial Electric, Fresno, Calif.
“Price isn't always why I buy a particular item. I like to use quality products so I don't have warranty problems. It doesn't matter if you saved $100 dollars if you have to return and replace a defective item for free.” — Louis Nowicki, All Lighting ‘N’ Electric, Granada Hills, Calif.
Don't Make Customers Wait at the Counter
“Expedite my employees in and out of your facility as quickly as possible - no time wasted. Forget the doughnuts, etc…I would prefer other priorities for your resources.” - Duane Du Puy, Quality Wiring Service, LLC, Hubertus, Wis.
“Sometimes when I go to pick up an order I feel I might as well pack a lunch because I spend so much time at the counter. Speed it up!” — Jeff Miller, Jeff Miller Electric & Refrigeration, Yonkers, N.Y.
“Get me in and out and don't let the counter help start talking about things unrelated to getting me in and out. Make sure you have enough counter staff at the busy times so I can be in and out in 20 minutes — not one-to-two hours. I don't want to be your friend when I am working. I may be your friend after work but during work time I have to work.” — An electrical contractor from Colorado Springs, Colo.
“I find it frustrating to go into a distributor and stand around waiting, particularly when interrupted by another customer on the phone. It's convenient to be able to pick things up in the aisle myself. I can be doing this while another customer is being taken care of, but this requires a stocking system someone off the street can navigate.” — Gary Winn, Harry E. Winn & Sons Inc., West Chesterfield, N.H.
“Turnaround time is important. It is highly critical that they keep a stock and not give me the old, “It's on back order” business. Counter wait times must be kept to a minimum. Not everyone has time to shoot the ?#5%!” — Arik Sevy, Sevy's Electrical LLC, Long Branch, N.J.
“Your counter people are crucial to maintaining our business. It's all about attitude and a desire to serve. So many are just not helpful, allow friends to skip in turn, and worse, seem put out when required to do anything more than a will-call ticket. Counter personnel who have service and customer satisfaction as a goal and a habit will always have our business, even if they are not always the lowest price.” — John Alger, Alger Electric, Salt Lake City, Utah
“When I come to your counter, don't ignore me and not even acknowledge I am there. Have a staff that has knowledge of the parts they sell.” — Tim Purser, Central Electric, Murray, Utah
“1. Get the city desk guys to move. I rate businesses by how long my men have to wait. 2. How available are the people I deal with? I need to get a hold of them now, not leave a voice mail. 3. Quit changing my salespeople or account manager — I just get him trained and they give me a new one.” — Mike Nies, Nies Electric, St. Cloud, Minn.
No Surprises Here: Out of Stock Means Out of Mind
“Get the products I see in the trade magazines on the shelf.” — Robert Gudbrandson, Gudbrandson Electric, Grand Rapids, Mich.
“The economy has started to turn around, but distributors haven't replenished their stock yet. They had better catch back up or they will lose the brand loyalty of the big industrial control names to ‘generic’ distributors like Automation Direct - just like the residential market has done with Home Depot, etc.” — Harold Curtis, Curtis Controls, Douglasville, Ga.
“Throw out the mentality of A-B-C-D items and think of the products that go together, and stock according to what goes together.” — A Tennessee electrical contractor
Good Salespeople are Still Worth Their Weight in Gold
“Electrical distributors should consider their inside salespeople as the most important link with the customer. Our company tends to gravitate toward those distributors that have competent and accessible inside salespeople. I also need accurate internet access to my pricing.” — Steve Dorsett, Birdwell Serv-Con, Inc., Conroe, Texas
“Identify and market new and cost-saving products to contractors. We do not have time to waddle through trade magazines and wait for responses to product query cards.” — Steven Weinberg, Weinberg Electrical Contractors Inc., Linden, N.J.
“Educate your staff and instill in them the importance of proactively presenting new and innovative products to their customers. Develop a teamwork-like attitude in dealing with your customers. Consider yourself a key person in your customers' success. While not every idea or presentation will result in acceptance or an order, don't give up trying to find ways to help your customer win projects and be more profitable. Your success is dependent on the success of your customers.” — Carl Sampsell, Mid-State Commercial Contractors, Mifflinburg, Pa.
“Little guys can eventually turn into big guys and they remember how they were treated when they were small and vulnerable.” — Patrick Murray, Murray's Electrical Service, Elk Grove, Calif.
It's Time to Get Serious about Offering Online Purchasing
“Make it easy to just click a page and find the information on an item and if it's in stock. Grainger is making good progress with this concept.” — Tiffan Jones, Lynn's Electric & Solar, Inc., Valrico, Fla.
“Put catalogs and pricing info on the web. I would love to check availability or part information via a smartphone before having someone drive to the distributor, only to find it out of stock or special order.” — Anonymous
Pet Peeves and Other Good Advice for Distributors
“Have qualified staff and the correct number of staff. Deliver when you said you would. It's okay to make a reasonable profit on materials you sell me, just do not try to get rich overnight.” — Robert Barriger, Hunt Electric Corp., Saint Paul, Minn.
“Quit behaving like corporate minions and attend to the customer's needs. The distributor should be working for the customer and not taking a position that aligns itself with manufacturers, vendors, agents and reps.” — An electrical contractor from Tennessee
“My suppliers are in a unique position to offer educational opportunities to electrical contractors to make them better businessmen. There is a great effort in our field to make contractors better electricians, but unfortunately being a good electrician alone doesn't make a contractor successful.” — An electrical contractor working in Lincoln, Neb.
“Open earlier and close later. When they open at 7:00 a.m., I'm sitting in traffic on my way to work and on my way home they have already closed. That's what makes the home centers so convenient.” — A Southern California electrical contractor