Article Number : 4960 |
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| Date | 10/12/2009 8:52:32 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=4960 |
| Abstract | By Steven Feldman PHOENIX—How can the floor covering distributor better serve the needs of its retailer customers? That was the focus of a research study conducted by Jason Bader, managing partner of wholesaler consulting firm The Distribution Team, the findings of which... |
| Article | By Steven Feldman PHOENIX—How can the floor covering distributor better serve the needs of its retailer customers? That was the focus of a research study conducted by Jason Bader, managing partner of wholesaler consulting firm The Distribution Team, the findings of which were presented at the annual meeting of the North American Association of Floor Covering Distributors (NAFCD) held here last month. Bader told the crowd— surprisingly down only 10% from last year despite the tough economy—that first and foremost, the dealer expects consistency from distributor reps. That means visiting often and on a regular schedule. That means respecting the dealer’s time. That also means understanding the person sitting across the desk from them. Bader referred to that as a retailer interview. For starters, the rep should understand how the dealer makes money. “People are willing to tell you about their business,” he said. “Ask them about their core markets. The last thing you want to do is sell them something they don’t need.” The rep should also know is who exactly makes what decisions in each company. “Don’t just zero in on the owner or senior management,” Bader said. “They may not be the ones making the decision. Spend time with people on the floor. It’s OK to introduce yourself to the driver, materials handling people, etc. This is how you strengthen relationships.” Bader’s research also revealed that the dealer wants to see his reps for reasons other than to just make a sale. For example, taking care of the samples in displays. “They want the rep to make sure everything on the floor is updated and looking good,” he said. “They see their store as the Taj Mahal.” What else can improve the distributor-retailer relationship? In a word, advocacy, particularly as it relates to claims. “You need to show you are going to bat for them with the manufacturer,” Bader said. Research shows distributors often commit the No. 1 cardinal sin: ducking claims. “If a dealer comes to you saying he has a problem with something and you avoid that phone call, you will not be seen as a resource,” Bader said. That sentiment was echoed by Phil Koufidakis, president of Phoenix area retail chain Baker Bros. Koufidakis was part of a three-person panel to offer a retailer’s perspective and validate the findings. “When you have that customer in front of you, she can’t wait 11 days to have the house inspected,” he said. “She’ll say, ‘I paid you; I didn’t pay the manufacturer or distributor. I just want it resolved.’” Koufidakis noted that a long timeline in the resolution process can cause a retailer to lose a customer—and the distributor to lose that dealer— forever. “This can cause a wedge in the dealer-distributor relationship. You can quickly become irrelevant.” Distributors, however, say it’s not that simple. “How do you charge for this service?” said incoming NAFCD president Fred Reitz, vice president of operations, J.J. Haines, who also participated on the panel. “Putting an inspector on the site to look at the floor will cost between $200 and $600. Who is going to pay for that? Also, what if the claim is the result of the floor simply not meeting the consumer’s expectations? What if there is no manufacturing or installation defect?” Another distributor put it in perspective. “The outcome of 90% of all claims is ‘no.’ The sooner you get to ‘no,’ the more likely you can get ‘no’ to stick. It’s painful because relationships are on the line. It used to be in boom times we would say ‘yes,’ but those days are gone. Today, if you don’t say ‘no’ 90% of the time, you will be out of business.” Koufidakis said it all comes back to communication. “What are your expectations of me, what are my expectations of you, what are the consumer’s expectations of me.” Adding value Every distributor brings three things to the table: product, price and service. Beyond those are the differentiators. Bader provided a few suggestions to maintain relevancy: 1. Technology: B2B is not the wave of the future—it is a reality of the present. But retailers and distributors are often in an implementation tug of war. Distributors and larger retailers have already seen how it drives costs out of the equation. Most smaller retailers still like to pick up the phone to place an order or check on inventory. “We will be doing B2B with anyone willing to do it with us,” Koufidakis said. “Anyone not doing it is making a big mistake. We have saved a lot of money. B2B is a huge part of the business going forward.” But one distributor in the audience offered an opposing view. “I don’t think the industry is ready to accept this on the hard surface side.” Koufidakis responded, “The WFCA has an initiative to facilitate this for retailers. There are plenty of people who can benefit by this initiative. I’m all about taking this industry out of the 19th century.” With that said, Bader advised distributors can drive this technology change to maintain their value in the chain. 2. Marketing: It was revealed that in many cases distributors do not participate in marketing activities with their retailer customers. Bader sees this as another opportunity for distributors to add value by acting as the glue to bring everything together. “You can sit down with many dealers and do marketing planning for the next year. You can also do checkups on a quarterly basis. Ask, ‘What can we do to support you?’ This is something that can cement a relationship because it helps a dealer make more money.” 3. Education: The third panel member, Roy Foster, vice president of sales for Unilin, noted that when distributors attempt to educate their dealers, product knowledge is always at the top of the list. “Take it one step further. Instead of just product knowledge, put a program together to teach them about the industry.” Haines’ Reitz believes anything that can entangle a distributor with the retailer is beneficial. “It’s face-to-face training. It’s driving them to your Web site. It’s being the expert for them. Sometimes the question will be about some other manufacturer’s product, but by providing the solution you add value.” In other news • Renz Verbeek, regional manager, FlorStar Sales, was honored with the 2009 Leadership in Action Award, which recognizes those who bring positive ideas, change and contributions to the floor covering industry. Scott Rasmus, president of FlorStar, referred to Verbeek as the consummate relationship builder. “He leads by example. He does not sell, but shows salespeople how to sell and installs accountability procedures.” • Next year’s NAFCD event will be co-sponsored with the North American Building Materials Distribution Association. • According to Desmarais, 85% of NAFCD membership was in attendance at the 2009 conference. “We were flabbergasted to get this type of participation. I think part of it is we have a very strong program. The committee spent a lot of time focusing on the economy—helping our members through this difficult time.” NAFCD also provided one complimentary registration per member to help drive attendance. • In the aftermath of two NAFCD research studies on manufacturer-distributor and distributor-retailer relationships, the association is developing a competitive advantage kit. “It’s a tool our members can use to develop marketing plans,” Desmarais said. “How do we better work together in the future? It takes the emotion out of the discussion and makes it more of a strategy planning session.” • NAFCD picked up 10 new distributors and 20 manufacturers over the last year for a net gain of 10. |