Fixing the Broken Marketing Model
The HVAC distributor business is filled with some of the sharpest business people in the world who unfortunately haven't figured out how to really fix the marketing model and prepare to be relevant and viable in the future. They have adopted change and technology in many parts of the business, like computers for accounting, bar coding, and inventory management, however, when you look at the sales force, the heart of the business, little has been done to fix that model in over 50 years.
Yes, the base of the business lies in the products you carry and the ability to have them in stock and available when the contractor needs them. But with product parity and more widespread technology this no longer gives distributors the sole ability or the right to gain and retain contractors.
The customer emphasis has to change. In order for the distributor to do well going forward, he is going to have to adopt the concept of building true contractor communities.
What is a community? A community is a group of people pulled together by a common set of interests or goals. It offers leadership, takes care of members, and ultimately grows each person in the community, thus growing the community.
Why is it important to be on the front end of building communities? Because at the end of day, the only thing a distributor owns is the relationship with his contractors. Unfortunately, that relationship has never been more threatened than it is right now. At any given moment in time you stand the risk of losing your contractors to the competition.
The Internet and technology are compressing the world. Where the contractor, distributor, and manufacturer are located becomes less important every day. The idea of getting goods from other locations, including the other side of the world, is growing.
If the only platform you have to offer is product, then I predict that over time you will find your primary contractor volume business slipping away and your actual sales changed to smaller fill-in orders only. You will change. It's simply a matter of if you will control your destiny or if your destiny will control you.
How do you change the trend and control your destiny? Develop and build strong contractor communities. If you take the time now to become the contractor's central source of information, education, and inspiration, you can make yourself a valuable asset that cannot be replaced by merely an online vendor from the other side of the world. You begin to deliver value for both the contractor and the manufacturer that is irrefutably worthy of you remaining in the supply chain.
Why does the concept of community work? It takes advantage of four basic human needs: the need to be appreciated, to be a part of something, to get better and grow, and to be safeguarded from danger.
Distributors who start working on meaningful communities that offer real value based on the principles above are the ones that will grow and flourish in the future. They are the competitors that will slowly steal your current contractors and make you a fill-in supply house.
For more information, contact Fred Thal, president of Feature Group USA, at 636-537-3800.
Publication date: 07/17/2006