Electrical distributors have a pretty easy job — in theory. Supply the customer with the right product at the right time, to the right place in the right quantities at a competitive price. While this may sound easy, how many of your electrical supply houses consistently hit these goals?
This checklist will help you find out. Just take a few minutes to answer each question “yes” or “no,” and then total up the “yes” votes for scoring.
Basic servicesSmart distributors willing to go the extra mile with the most basic of customer services can score major points with contractors. In the case of supplying inventory to customers' facilities, electrical distributors such as Graybar Electric Co., St. Louis, sometimes staff customers' factories with on-site “tool crib” managers, or provide customers on large construction projects with temporary storage containers that act as remote warehouses. Service-oriented distributors also go to great lengths with product delivery. One New York electrical distributor used to joke that he got so many requests for “emergency” deliveries that his next delivery truck was going to be an ambulance. Warren Electric Co., Houston, became famous in the Texas oil industry for delivering products by helicopter from the roof of its Houston headquarters to customers on oil rigs in the Gulf of Mexico.
The following 25 questions cover the core services that you should get from all electrical distributors. If they don't score high with pricing, delivery, fill-rates, dependability, expediting orders, easy access and their return policy, chances are that you won't be too satisfied with them in other areas, either.
1. Is the distributor price-competitive and are credit terms fair?
___ Yes
___ No
2. Does the distributor offer fast turnaround on job quotes?
___ Yes
___ No
3. Does the distributor provide reliable job-site delivery?
___ Yes
___ No
4. Are the distributor's order-fill rates 95% or better?
___ Yes
___ No
5. Can you get in touch with a key contact at the distributor 24/7 to handle emergency situations?
___ Yes
___ No
6. Is the electrical distributor's warehouse open at night or on weekends when you might need to fill in an order?
___ Yes
___ No
7. Can you rely on the distributor to stage orders for big projects with long timelines?
___ Yes
___ No
8. Is the distributor's return policy fair?
___ Yes
___ No
9. Is the company your “first-call” distributor?
___ Yes
___ No
Computers, Web sites, fax machines, Palm Pilots and other electronic devices have taken people out of the service equation to some degree over the past few years, but they still don't replace the personal touch. It's still a “people” business, and the savvy electrical distributors who recognize this and build it into their business philosophy will keep their fair share of electrical contractors happy.
As you have probably noticed, many small electrical distributors are being acquired by large national or international players like Rexel, Sonepar, Graybar, CED, WESCO, Hagemeyer or GE Supply. While these “Goliaths” of the electrical wholesaling industry have many advantages because of their size, it's an accepted fact on the supply side of the electrical construction market that the company — big or small — that's closest to the customer still wins. That's good new for electrical contractors, because electrical distributors' salespeople should be tripping over themselves trying to outserve each other.
10. Do you have a working relationship with the branch manager or senior management of the company?
___ Yes
___ No
11. Are the counter personnel, inside salespeople and field salespeople knowledgeable?
___ Yes
___ No
12. If salespeople can't answer a question, do they get back to you in a timely manner with the information that you need?
___ Yes
___ No
13. Has the company ever set up “home and away” meetings with your employees, where key players from both companies get the opportunity to visit the others' place of business and connect faces with telephone voices and to see how the company operates?
___ Yes
___ No
14. Do you get a chance to meet manufacturers' salespeople, independent reps and other product experts through the distributor?
___ Yes
___ No
15. Does the electrical distributor introduce you to new products that can make your job faster, easier, more profitable or safer?
___ Yes
___ No
16. Do the distributor's counter days or trade fairs just provide a free meal, or do they offer an opportunity to learn about new products?
___ Yes
___ No
There are some things that the Web will never replace in contractor-distributor relationships. Top on the list is the personal touch. The Internet just can't replace the peace of mind you get from having a reliable and knowledgeable go-to guy or gal at an electrical distributor.
However, there's no question that — used wisely — the Web can help electrical distributors communicate more effectively with electrical contractors. These days, it's not uncommon for the more technologically proficient distributors to offer e-mail access to key employees and a Web site with some basic timely and accurate information like product specials, maps to branches, branch hours, a company brochure in a PDF format and contact information. Many electrical distributors go much further, and offer online purchasing, electronic catalogs and online tracking of orders.
17. Does the distributor's Web site always offer updated, accurate and useful information, or is it basically just an electronic brochure that doesn't change?
___ Yes
___ No
18. Does the distributor offer an up-to-date catalog on its Web site?
___ Yes
___ No
19. Can you order products online from the distributor?
___ Yes
___ No
Many electrical distributors do a pretty good job of providing the basic service functions (warehousing products locally, providing credit, offering a single source for a wide variety of products, etc.). But they can really differentiate themselves from each other by providing value-added services that can't be found elsewhere in a local market.
One service that some distributors provide electrical contractors is helping them out on the business end of their operations. While most electrical contractors are wiring wizards, running a profitable venture is an important business skill that they sometimes lack. One Florida distributor used to have an outside consultant work with smaller electrical contractors new to the contracting game to help them with business basics such as accounting and bookkeeping. The attention that the distributor gave contractors early in their electrical careers was usually repaid in business as their contracting firms grew.
Two other examples of value-added services are some programs that Graybar offers electrical contractors to help them out on the business side. For years, the company has offered electrical contractors financing and leasing programs to assist them on construction projects through Graybar Financial Services.
More recently, the company started offering its Project Manager software package that electrical contractors can use to manage a construction project from the initial quote on through completion. The software helps with order acknowledgment, reconciliation, tracking, billing status and change order information and electronically generates status reports for contractors that include project updates daily, weekly or monthly.
20. Does the distributor offer any special services such as wire paralleling, tool rentals or job-site packaging?
___ Yes
___ No
21. Does the distributor offer product training?
___ Yes
___ No
22. Can you get financing from the distributor for big projects?
___ Yes
___ No
23. Do the distributor's salespeople alert you to new business opportunities created by changes in the NEC, or suggest new services that you could provide for your customers?
___ Yes
___ No
24. If you have a need for some advice in accounting, bookkeeping, sales, marketing, estimating or other business skills, can you count on any of the distributor's personnel to help out?
___ Yes
___ No
25. Has the distributor asked you to fill out a report card to “grade” the company on delivery, terms, fill rates and overall service?
___ Yes
___ No
Get out a pen or pencil and check off the services that the electrical distributor currently offers. Score one point for each check.
A score of 20 or more. This distributor offers a terrific package of services and is clearly ahead of the pack.
A score of 15 to 19. This electrical distributor provides a pretty good package of services, but there is room for improvement. You many want to suggest some additional services to push him or her over the top.
A score of 14 or less. This electrical distributor is definitely lagging. Unless there aren't any other distributors in your market that provide more service, you should seriously question why you do business with this company.