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Distributors Rank 2009 Sales & Profit Drivers

March 27, 2009
David Gordon, president, Channel Marketing Group, Raleigh, N.C., and Allen Ray, president, Allen Ray Associates, Kennedale, Texas, recently conducted

David Gordon, president, Channel Marketing Group, Raleigh, N.C., and Allen Ray, president, Allen Ray Associates, Kennedale, Texas, recently conducted their annual ElectroIndustry survey. Almost 400 distributors, manufacturers and reps responded. The survey found that 2009 has started with a thud for most distributors. However, some see this as an opportunity to streamline operations, prune underperforming personnel, right-size inventory and implement strategies that will pay future dividends.

Some distributors are looking at the year as two seasons. In the first season (which we are currently in) they are focusing on training, customer relationships, new product introductions and other pre-sales activities. The second phase, expected later this year and possibly as soon as June in some areas, is the opportunity to grow the business and take share. Ray and Gordon believe if credit markets thaw this is feasible.

The chart below offers some insight into distributors' business priorities. Respondents were asked to rank on a scale of 1 to 10 (10 being high), the most important issues to help achieve 2009 sales and profit objectives. To see the remainder of the issues, go to www.electricaltrends.com and search for “distributor 2009 sales and profit drivers.”

Top 10 Business Priorities for DistributorsRank Business Priority Percent 1. Review price matrix 8.41 2. Measure / improve sales productivity 8.20 3. Capture more small projects 7.96 4. Improve warehouse productivity 7.88 5. Focus on cost reduction 7.79 6. Employee training (product, skills, process) 7.66 7. Energy efficiency / green 7.34 8. Increase SPA usage 7.20 9. Manage Days' Sales Outstanding (DSOs) better 7.18 10. Capture more large projects 7.04