This document from Channel Marketing Group discusses challenges and opportunities facing electrical distributors. It notes slowing growth nationally and eroding margins. Distributors need to improve marketing and profitability as manufacturers provide less funding. Alternative channels are emerging as an threat. The industry is facing changes like the rise of e-commerce, different sales models, and an aging workforce. The document suggests distributors focus on revenue growth, consider niches and adjacencies, and differentiate themselves by understanding customers' priorities. It also questions whether the traditional branch-centric sales model remains the best solution.

1. Copyright Channel Marketing Group, 20159/28/2015, page 1
Thinking About Today
Planning for Tomorrow
Ideas that Deliver Results

2. Copyright Channel Marketing Group, 20159/28/2015, page 2
The Market
Questioning Ourselves
Thinking About Tomorrow
Becoming a Gazelle

3. Copyright Channel Marketing Group, 20159/28/2015, page 3

4. Copyright Channel Marketing Group, 20159/28/2015, page 4
1. Slow / Minimal Growth, Nationally
◦ Nationally … +/- 2% … New England Originally 4.3%
◦ Major Markets Experiencing Growth
◦ Correlation to Urban Areas, Contractor-Focused, LED Drivers
◦ Larger Companies Aggregating Business
2. Margins Eroding … Need for Operational Excellence
3. Better Marketing By More
◦ Who “owns” the customer?
◦ Manufacturers Funding Less
Need for Profitability
Need for Their Marketing
Redirecting Funds … Coop Going Away
Pay for plan and performance
◦ Distributors Need to Learn “Budgeting” for Marketing

5. Copyright Channel Marketing Group, 20159/28/2015, page 5
4. Different Sales Models
◦ Inside Sales Being Valued More
◦ 2 Tier Models
◦ Compensation Structure Reviews
5. eCommerce Investments … Limited eMarketing …
Limited Adoption
◦ Price Consistency & Inventory Accuracy Issues Accelerating
◦ eConnectivity with Contractors
◦ Think Retail
6. Alternative Channels
◦ Anixter / Grainger / Fastenal / McMaster-Carr / e / ?
◦ We’re Only One
7. Average Age Declining
◦ College Recruiting
◦ Technological Experience
◦ Old Habits Dying Hard

6. Copyright Channel Marketing Group, 20159/28/2015, page 6
DISC Report
July 2015
Patchwork Economy
Larger Contractors
Prevail
Re-Urbanization
Uneven market growth
Urban Areas Growing

7. Copyright Channel Marketing Group, 20159/28/2015, page 7

8. Copyright Channel Marketing Group, 20159/28/2015, page 8
Focus
Revenue
Long Term Objective
Customer / Product-Orientation
Goal Drives Direction, Strategy & Initiatives
Consider
◦ Size for Size’s Sake? … Need Market Share
◦ Size for Valuation? … Allows for Diversification
◦ Size for Profitability? … Operational Excellence & Focus

9. Copyright Channel Marketing Group, 20159/28/2015, page 9
Niches
◦ Profitable or Distractions
◦ Committed or Dabbling?
◦ Goals? Annual Expectations?
◦ Planning for Success or Enabling for Existence?
Need
◦ P&Ls
◦ Plans

10. Copyright Channel Marketing Group, 20159/28/2015, page 10

11. Copyright Channel Marketing Group, 20159/28/2015, page 11
Rising Tides =
Market Expectations
Ride the Wave =
Create Demand
On Shore =
Consider Adjacencies

12. Copyright Channel Marketing Group, 20159/28/2015, page 12
Smart Home
Smart Office
Smart Industrial
LED Seller or Order Taker
Turn-Key Solutions / Marketplace
Knowledge Source
Seek New Business
◦ Demand Creator
◦ New Revenue Models

13. Copyright Channel Marketing Group, 20159/28/2015, page 13
Differentiating
oneself is important
BUT …
Need to know
what is
important to
“the” customer

14. Copyright Channel Marketing Group, 20159/28/2015, page 14

15. Copyright Channel Marketing Group, 20159/28/2015, page 15
Expectations Drive Service
◦ Customer
◦ Management
◦ Self
“People Respect What You
Inspect”
Metric Management Sets
Expectations

16. Copyright Channel Marketing Group, 20159/28/2015, page 16
“Right Sales Force”
Integrative & Segmented Sales Approach
Commission ≠ Aggressive Sales force
Process Trumps … Who Steers the Ship?
Different Strategies
To
Different Customer Bases

17. Copyright Channel Marketing Group, 20159/28/2015, page 17
Salesperson May Only Be an Element of
Tomorrow’s Selling
Experience = Relationship
Consider These Relationships:

18. Copyright Channel Marketing Group, 20159/28/2015, page 18
Is Today’s Branch Centric Sales Model The
Solution for Tomorrow?
Consider
◦ Remote Outside Sales Offices
Corporate Environment? Homes?
◦ Distributed Inside Sales?
◦ Multi-Supplier … Complementary or Competitor!

19. Copyright Channel Marketing Group, 20159/28/2015, page 19
But Whom’s?
◦ Who “Owns” the
Customer?
◦ Who is the Customer”?
Follow the Money!
Are We In The Decision-
Making Channel?
• The owner
• The influencer
• The overseer
• The installer
• The doer

20. Copyright Channel Marketing Group, 20159/28/2015, page 20
If money wasn’t a consideration …
What would you do?

21. Copyright Channel Marketing Group, 20159/28/2015, page 21

22. Copyright Channel Marketing Group, 20159/28/2015, page 22
Be THE Gazelle