14•
SMART MANAGEMENT
So what business are you in? t
he wholesale business just isn't what it used to be, so try- ing to run your business for
those bygone days might not be the best approach. sure there are many things from the past that continue to work just as well now as they did then — like integrity, trust, relation- ships, accuracy, thinking lean, hiring good people, etc. so keep doing those things that continue to work, but be mindful that our industry is changing and that the rate of change is acceler- ating. Failure to adjust to the new normal could leave you behind. With all that said, I believe it is
time to fundamentally rethink how we market and present ourselves to today’s trade customers. a part of it may be to almost rethink the business you are in. so what business are you in? In most cases, when I ask some- one this question at a trade show or
• Fundamentally rethink ways of marketing
• Don’t say you sell “commodities”, but....
• Sell quality products
• Build customer loyalty with small things
• Provide services the customers didn’t think they needed!
• Keep up with fast- paced technolgy
buying group meeting, I get their de- fault answers like plumbing, PVF, HVac, controls, waterworks, etc. this answer has served most whole- salers well for many years but I be- lieve that this may no longer be the correct way to think about what you market and sell. a similar thought process change
occurred in the restaurant industry some years ago. Most restaurants thought they were in the food busi- ness until some leading-edge compa- nies realized that they were in the entertainment business and began to refocus their sights on delivering a complete experience in dining. at the same time, they began to
raise the bar on other parts of their “product” to include clean uniforms, polite service, clean restrooms, clean seating and floors. so some restau- rants stopped searching for the galac- ticly great burger and started focusing on serving a good burger surrounded by a fun experience with consistently good service. and it worked. Most customers would never have asked for a better dining experience; but they liked it when they experienced it and instantly began using “dining ex- perience” as a criteria for selecting between competing restaurants. On a recent trip, we were driving
for many hours and needed a rest stop. the group voted on McDonalds. not because we craved a Quarter Pounder, Big Mac or Happy Meal, but because we thought McDonalds had the best odds for clean restrooms.
We probably wouldn’t have chosen McDonalds if we thought their food sucked, but each of us were able to find a food item that was acceptable after using their clean restrooms. We selected a burger place based on their restrooms. Go figure.
So what about our industry? • Help me understand how your
PVC fitting is different than the other guy’s —In our industry, one of the “elephants in the room” is that very small differences exist between many, many similar products. and I believe that those actual and per- ceived product differences will con- tinue to diminish over time. Of course many manufacturers will
argue this point with me but, as I talk with wholesaler salespeople, they confirm that for all their selling, mar- keting and brand support, many of
for more than a short period before competition matches or leap-frogs that market advantage. • Technology gains are shorted
lived — to make matters more com- plex, even sophisticated technical products are being copied or leapfrogged in months, not years. companies might gain a short-term advantage but must always be driving for the technical edge that will help them next month or next year. the technology pace is fast and is accel-
great toilet, most plumbers aren’t searching for the really great, “killer” toilet. They are looking for a good or maybe pretty good toilet that most wholesalers can provide.
their mainstream products are very similar, if not identical, in the minds of the trade buyer. that toilet, those fittings, that thermostat that you sell are pretty much the same as what your competition offers. the word commodity probably does not apply in most cases, but “fundamentally- undifferentiated” does describe the situation for a growing number of hard-goods products. the guys who install this stuff do
have some brand preferences and emotional attachments, but often they have more to do with history and often have little to do with the actual fit or function of the products. so while XYZ company may have a re- ally great toilet, most plumbers aren’t searching for the really great, “killer” toilet. they are looking for a good or maybe pretty good toilet that most wholesalers can provide. • Communication and adoption
of new technology, materials and techniques is faster than ever before — this fundamentally un- differentiated view of hard goods products is strengthened by commu- nication and technology moving so fast that any differences disappear in a matter of months, not years and decades as it was in the past. While there may be exceptions, it will be difficult for the wholesaler to hang his hat on killer products or brands
erating. so you can only expect this to get worse. • What the heck is loyalty? —
Loyalty between manufacturers and wholesalers seems lower than ever before. Both parties continue to ask each other, “What have you done for me today or in the past hour for that matter?” While manufacturers want brand loyalty, wholesalers must build “wholesaler loyalty” that supersedes brand issues and changes. • Acceptable quality is the
default — the quality for all prod- ucts is improving to the point where product quality is often assumed and no longer part of the decision process. A. When my grandfather r.r.
schmitt was running his plumbing shop in West newton, Pa., in the early 1900s, some of the fittings com- panies were advertising an interesting differentiating concept: that their fit- tings were actually the size that they were supposed to be. Back in those days the industry had acknowledged the need to meet standards and for ac- curacy in sizing, but not every manu- facturer had mastered the manu facturing processes required to accomplish these objectives. the in- stallers often had to adapt sub stan- dard materials in order to complete jobs. so when one manufacturer got it right, they were shouting it from (Turn to selling... page 16.)
• Be sure to visit
www.thewholesaler.com for web exclusive articles and videos! • So while XYZ company may have a really BY RICH SCHMITT Business management specialist
•THE WHOLESALER® — MARCH 2011
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