Is There a Distributor Link in Your Value Chain?

October 15, 2001
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Remember the concept of vertigal integration? Consider the distributor as part of your own value chain.



Remember a few years ago when the concept of vertical integration took root, and carpet manufacturers decided to enter into the carpet cleaning industry? It was during this period that I first heard the term "Carpet Value Chain."

The value chain starts with the fiber producers who are connected to the carpet mills that deliver their products to retailers, who give them to installers for placement in homes or businesses. These businesses are linked together like a chain, each mutually dependant on one another to exist.

To combat vertical integration by carpet manufacturers, many industry experts suggested that carpet cleaners link up with carpet retailers to become a link in the chain. Many cleaners did just that. Today, carpet cleaners are recognized as part of the "Carpet Value Chain."

Adam Heller, of Gibson Janitorial Supplies (gibdisc@worldnet.att.net), San Bernardino, Calif., a company employing 175 and in business since 1948, told ICS Cleaning Specialist, "The relationship we have with cleaners is the most important part of our success."

He says, "We delve deeply into our customer's business. And then we assist them in reaching their goals and dreams. Too many distributors tend to simply sell and fill orders. Our 53 years in the cleaning industry help us to assist our customers with the most complex problems. If we can coach our customers and help them grow their businesses, our business will automatically grow with them."

Although cleaners are a part of the carpet value chain, they are also a part of their own industry chain. It's a link connecting manufacturers of equipment, material and supplies to the distributor, that delivers the goods to cleaners that, in turn, service the customer. If you think about it, every industry has a value chain of its own.

One of the valuable (and often taken for granted) links in our industry chain is the distributor.

"I think developing a relationship with the distributor that repairs your "moneymaker" is one of the most important relationships you can possibly make," said Ronald 'Rawknee" Curtis, in response to an ICS Cleaning Specialist Bulletin Board query. "With me stepping out and away from my business at times, it is a relationship that is worth its weight in gold."

Distributors have come a long way. Years ago, distributors were often seen as the elixir/snake tonic salesman of the old west. Their sales tactics included doing and saying anything about their product just to get you to buy.

According to Curtis, when he has problems, he calls Ed Wilber, his Steam Way distributor, "first, before I buy anything. My distributor is a very important and intrinsic part of my overall business. It's a good feeling to have Ed there when I need him."

However, as cleaners became increasingly sophisticated and educated through organizations like the IICRC, they began to demand more from their distributors.

Ralph Bloss, founder of Steam Way International, once told an audience during a keynote address, "Change is inevitable; growth is optional." What he meant was that in order to survive in today's market, cleaners must be willing to grow because things will change with or without you. Smart distributors saw the inevitable change coming, and grew and prospered by meeting their customers' wants and needs.

Today's successful distributors offer the industry's best equipment, material and supplies and are more than just "salesmen." They are educators, innovators, consultants, service experts and friends.

"Our relationship with our current distributor/manufacturer is the best since we entered the business seven years ago," said Jeff Stone, in answer to an ICS Cleaning Specialist Bulletin Board query. "Helpful, friendly, informative, lifesavers, are some of the words I would use to describe Kevin Stark, Don Terry, et al, over at Bane Clene. When you call Don Terry, for example, it's like having your own personal chemist at your fingertips. And you never have to buy anything."

Education
Wanting to help their customers, and recognizing that one way to increase their own sales was to increase their customer's ability to increase sales, distributors considered a simple supply and demand scenario: The busier you are, the busier they are. Their answer was a win-win situation - educate the cleaners.

To do this, distributors would bring in a group of cleaners, offer valuable education (at their location) and during the breaks, the attendees had an opportunity to visit the show room. This gave the cleaner a chance to see what was new and exciting, to get to know the "distributor" as a group of real people, and to network with fellow cleaners.

At first, most distributors taught technician classes, usually specific "how to" courses in using the distributor's equipment or chemicals, or both. Later, distributors met another important need by offering cleaners management classes. It is often said that business don't fail due to lack of technical knowledge but rather lack of management knowledge.

Jon-Don Products, Roselle, Ill., (www.jondon.com) is one of a growing number of distributors taking a keen interest in helping their professional cleaner clientele become better educated about the industry, both from the technical end and the business side.

Today, the most successful distributors offer a growing variety of educational opportunities, from technical to management and from two-day IICRC courses to manufacturers workshops, in-house seminars, computer based training, books, manuals and more. Does your distributor offer educational opportunities?

"We take a personal interest in them," explains Jon-Don national sales manager Dave Howard. "Our customers know they can come in and talk to us on a very frank nature because they know we won't compete with them. We set them on a pathway for success. We feel so strongly about it, we set up an intensive five-day training program. Literally a college-level course, Strategies for Success is taught by Steve Toburen. It's been around for about five years."

Innovators
Since change is inevitable, smart companies opt for growth by meeting the need for new and improved equipment, materials and supplies, which is continually being developed by manufacturers and purchased by distributors. The manufacturers' product, research and development departments have taken the time to listen to customers, and responded with the most technologically advanced equipment, materials and supplies in the world. Does your distributor buy from one of these innovators?

Consultants
Today's quality distributors are also consultants, which means they are very knowledgeable in their industry. They have taken the time to learn about the cleaning industry in order to help their customers. If they cannot answer your question(s), they can usually find the answer from a variety of resources available to them. They are members of professional organizations, associations and supporters of all members of the Cleaning Value Chain. Can you consult with your distributors?

Service Expert
In preparing for this article, I questioned many professional cleaners and distributors. I asked cleaners what they expected from a distributor, and quizzed distributors about what they thought their customers expected of them. The words "outstanding service" were mentioned every time.

Essentially, cleaners expect their distributors to deliver on promises, stand behind product and provide outstanding service. By the same token, distributors expect cleaners to continue using their services so long as they are honest in their relationships with cleaners, stand behind what they sell and continue to provide outstanding service.

It's win-win: When a cleaner and distributor are in a win-win situation, friendship soon follows. Does you distributor provide outstanding service?

Friendships
I also asked the cleaners if they considered their distributor/representative a friend. Those who were satisfied in the relationship answered yes; those who were moderate to dissatisfied said no.

Good distributors understand the importance of relationship building. According to Jim Traudt, co-owner of ChemClean, a distributor in Milwaukee, Wis., people buy when they know you, trust you and like you.

On the distributor side, Larry Cobb, of Cobb Carpet Supply, Dallas, (www.users.ticnet.com/cobb), the relationship enjoyed between a cleaner and his or her distributor varies. "But I think it should be a pretty be a pretty close relationship," Cobb says. "I think it's more of a conversational art between the customer and the distributor. The way we see it developing, a customer asks question about a particular aspect to their job, and we help them to find solutions to that."

He says some of this give and take takes place over the phone, some of it in person. But, Cobb adds, "Most of the time, they call us up and ask a specific question about a specific problem they're having. And we try to research it and get back to them with an answer, or a solution. I think that begins the process of developing that relationship. And lately, we've been doing that somewhat on your (ICS Cleaning Specialist) Bulletin Board."

Simply put: We all enjoy dealing with people we like. Do you like your distributor?

The Cost and Conclusion
The attributes mentioned in this article are what you should be looking for in a distributor. However, Traudt says to be the type of distributor most cleaners expect them to be can - and will - affect the cost of doing business.

When price shopping for equipment, material and supplies, it's important to consider what you want from a distributor before you make that first purchase. If value-added services are important to you, then the few extra dollars you may spend with that distributor will be worth it to you.

According to Traudt, the cost of labor is far more expensive than equipment, materials and supplies. Cleaners have enough headaches just running their businesses - their distributor should not be one of them. He suggested that the next time you think your distributor's prices are too high, consider the value added qualities inherent in your professional relationship.

Remember, being an educator, consultant, service expert who also happens to provide outstanding service costs money. The friendships you develop with your distributor are rewards for doing it all right.

In response to a query on the ICS Cleaning Specialist Bulletin Board, Bryan O'Haleck says that being good members of the local cleaning community helps to support the people that stock the products cleaners need. Pinching pennies, he believes "is not as important as having a local "information base" of people who will help diagnose a problem over the phone for the technician in the field, or give us feedback from their other customers about new products."

Cobb agrees. "We do chemical manufacturing here also, so we get a lot of feedback that helps us to fine tune our chemicals," he says of the give and take nature of the distributor-cleaner relationship. "The same thing with equipment: We find out what they'd like to have. Of course, you can't do all of it. But if a lot of people are calling for the same thing, you can add that feature to the machine."

A good distributor is a strong link and should be a part of your company's value chain. Without one, your company could become the next weakest link. Good-bye!

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