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Distributor Pubcast Episode 4: Death by a Thousand Cuts with David Gordon

by Matt Johnson, on May 19, 2021 10:02:00 AM

On this episode, we sit down in the pub with David Gordon from Channel Marketing Group and Electrical Trends to discuss the slow erosion of small distributor customers to self-servicing eCommerce competitors.

 

What you will learn in this episode:

  • The importance of talking to your customer to find out what they want!
  • Why the "omni-service" model is the future of distribution
  • How the big-box and national brands are pulling business away from independent distributors
  • A variety of ways online retailers are disrupting traditional distributors
  • Why you should add more products and product categories to your website

On tap:


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Introduction with David Gordon

Matt Johnson:
David Gordon, welcome to the Distributor Pubcast.

David Gordon:
Thank you. Excited to be here. 

Matt Johnson:
Let's get into the conversation. For those few people out there listening to this Pubcast who may not know who David Gordon is, I thought it'd be good just to start off with a quick introduction and talk a little bit about the stuff that you do, David and specifically the electrical distribution industry, but I think you've worked with other distributors too. But tell us a little bit about yourself and what you do and what you're up to.

David Gordon:
Sounds great. Well, I started a channel marketing group a little over 20 years ago. We're a boutique strategic planning, marketing planning market research firm. Most of our businesses, you mentioned, are in the electrical field. We work with manufacturers, distributors, reps, some associations and service providers, electrical, plumbing, full industrial supply and similar companies along those lines, a couple of people in the utility space and we really help them in trying to drive their growth strategies and achieve their goals.

Everything from literally strategic planning to speaking relative to eCommerce, we've helped clients with just finding out what their customers are looking for to help them start that journey. So it can be as simple as that and then helping them gain adoptions. We also publish a blog in the electrical industry called Electrical Trends, just Electricaltrends.com that we've had for 13 years. And we cover a wide range of topics. And next month we're launching one in the HVAC industry.

Dave Bent:
So I just got to say one thing, having done some work with David, the awesome thing and why you should continue listening is he always brings a different perspective. He's always got a different way of thinking about things, which I totally admire. Looking forward to the conversation. 

David Gordon:
Looking forward to it.

Matt Johnson:
Exactly. I think that was a good line, David. We were just talking about, should you hire a B2C person or a B2B person? And you said, "You're asking the wrong questions." And I think that's a really good point. What does your customer want? Let's start there. I think that might be interesting, because albeit, you've done research with distributor customers, end users and you've seen some interesting things, especially kind of on the tail end of COVID, right?

David Gordon:
We were on the tail end of COVID. I'll actually back up three years, though Matt. About three to five years ago, every industry conference you went to, you had everyone talking that Forrester and Gartner were saying that the B2B market was a trillion, $2 trillion and then if you didn't launch, either do business via Amazon or launch a site just like Amazon, you were going to be out of business in five years.

Every association had all these speakers and they paid them big money. And they'd walk out of the conversation and you'd say, "Well, I guess we might as well try putting up our business for sale," which obviously, not everyone did. But no one also knew where to start. One day, I kind of got fed up. And I decided, God forbid, anyone should talk to the customer. 

In the electrical industry, we did a survey and we got feedback from over 1,400 end users of what they were doing and then we'd publish that report. The data showed what the contractor is wanting and what they were doing versus what industrials wanted were two different things and the way that they interacted were two different things. 

Even back then, we launched some services to help distributors just talk to the customer. Because one of the challenges is that a distributor salesforce has a vested interest to talk to their best customers. Because that's who they talk to. Whom do they talk to at that best customer? The decision maker, the President. 

Of course, he places lots of orders. He says we're not doing much. We're not doing anything, because he's not placing any orders that way. The sales guy, what does he tell his management? "They don't need it. They're not buying online. We have all their business."

Death From A Thousand Cuts

David Gordon:
And as Dave and I were talking earlier, it's death from a thousand cuts because his people are searching online, are buying some things online depending on especially if their core distributor may not have it. What happens to the accounts that the salesperson is not calling on, the unassigned accounts? Obviously, they're waiting for some salesperson to show up, right? Meanwhile, they buy other things. 

So there's this disconnect that happens. And directly to your question, we just finished for a client a white paper on what... It covered contractors in five different industries. Electrical, plumbing, HVAC, building materials, roofing and landscaping. So six industries. There were a lot of questions about why you buy from the distributors you do. But there were two questions that were specific relative to eCommerce. Looking at the two of them, 65 to 75% of the respondents have purchased something online from distribution.

Now, it ranged because we asked the question based upon percent of their purchases going this way. There were ranges there. Less than 5% of the people were doing more than 50% online. But it shows that something is happening. 

Matt Johnson:
Yep.

David Gordon:
Further, especially in the contractor world, they're looking for omni-servers. They want information when they want it. They need the spec sheets. They need their pricing. They need inventory information. They don't necessarily always want to wait. 

Dave Bent:
Yeah. I think David too, you regularly publish articles on what some of the big, the mega distribution companies are doing like Grainger and Fastenal and WESCO and the growth that they're seeing and... To me, there's a simple equation. Demand may have increased in some amount in total, maybe. 

But the growth that those bigger companies are getting, just means they're pulling business from independent distributors. But I'll let you comment on... Because you've written some awesome articles on the results lately.

David Gordon:
We've done a number of articles on it. Some of them do much better than others. Some of it obviously changes heavily based upon their business segment. You look at someone like Granger, then obviously, because of COVID, their online sales went up significantly. 

They also reported that their small to medium sized customer, different than their, "Fortune 100s", the last quarter grew 11% versus the top ones grew at 2%. So they're growing at a faster rate granted they're smaller, so it's smaller dollars. 

But an interesting comment was last year, a lot of those customers... They picked up a lot of first time customers, because of PPE products. They had it, people bought it. Tremendous growth there. But now they're mining that data. They're marketing back to those "one skew, one product category, one time customer". They are expanding the categories that those people are buying and getting repeat buyers. 

So when you look at Grainger and you look at their business mix, heavy manufacturing, other industrial and institutional heavy MRO. So it can be in frequent buyers, but I need it when I need it and I know what I need. So you're not selling to them, you're servicing them. You're accepting the order. We want to talk about Amazon and the reality is all three of us have too many Amazon boxes show up at our front doors on a weekly basis. 

But we don't shop on Amazon. We buy on Amazon. We're going there for a specific reason. We know what we're looking for or we know exactly the type of item we're looking for. We might just change the supplier. Do you agree?

Dave Bent:
Yeah. Absolutely. 

David Gordon:
There is no sales activity involved. It's the culmination of an order. Grainger has had that growth. Fastenal had the same type of success. WESCO doesn't play in that world Because WESCO's business is heavy project and contracts. So like utilities and some industrial and MROs, they have the contracts in that. But there are companies... There's a company called systemic, publicly held company, they actually are the holders of globalindustrial.com. They own that company. They have four companies that basically they just run strictly online businesses, $800 million last year, all through industrial MRO. 

Dave Bent:
Yeah. No, I think... Yeah, I mean, the trend is there. David, back to the phrase, when we talked before I didn't use such eloquent phrases, death by a thousand cuts. I think mine was more brutal. There's evidence in industry verticals, the famous business supplies office products being very mature that that happened when Staples showed up. And then it's accelerated actually because Amazon Business, the first vertical lens, was business supplies. Hey, they grew up to a billion dollars in a very short space of time as customers.

David Gordon:
When you go back to the office products Dave, think about the customer group that Amazon grew that with. It was not the Staples big customers, who were already under contract. It was all the small mid-size, that staples didn't even know that that was happening. Those customers are more profitable than the big customers from a gross margin percent viewpoint. 

Dave Bent:
Yeah, a large number of small customers. Not a small number of large ones, much more powerful.

David Gordon:
And if you look at most distributors on their financials, their large customers cover their overhead. Their small customers generate profit, not so much on a per order basis because you have to allocate all your overhead. Once those big customers cover the overhead: the facility; the accounting; department manager, things like that, those small people and those mid-sized customers, especially when they're un-assigned, add to the bottom line. 

So when those things just mysteriously disappear, when counters get quiet, when there's less calls coming to inside sales, when special order requests don't get asked for that typically have 40 to 50% gross margin because the customer is finding it somewhere else. When was the last time you heard of a distributor who said, "Well, I had to find such and such for someone on eBay." Remember they used to do that? The 20-year-old item that no one could find because it needed to replace something. 

Dave Bent:
Yeah. 

David Gordon:
You don't hear that. Distributors used to do that. They used to provide that service and could bill for it. Those things start going away because people are able to find it on their own. 

Dave Bent:
Yeah. Absolutely.

David Gordon:
Meaning incidental orders are now being self-served. They're no longer being distributor served. This doesn't tie to eCommerce, but let's go back to Home Depot. When Home Depot first started, when there was home warehouse and home quarters, all big boxes, when they first came about, distributors kind of poo-pooed them, "They're going after our customers." 

Though, okay, they took all the customers from the small hardware guy, then it's a DIY market. Remember, and a lot of distributors, especially in the construction trades, had showrooms to service these customers or people showed up. That business went away. Distributor's said, "Well, I'm glad I don't have to handle Suzy coming in not knowing what she needs. My contract people are only going to be going to the trade."

Dave Bent:
Yeah. Great.

David Gordon:
So then all of a sudden the small contractor, the one-in-two man shop, he doesn't go to the counter. He goes to Home Depot. It's more convenient. That business goes away. Then you start justifying why it's okay to give up that business. But in talking to manufacturers over during COVID and granted, this is on the construction side. Their sales of contractor pack products that were residentially oriented had significantly higher growth through Home Depot and Lowe's than they did through their distribution channels. 

They're selling it to the contractors who were doing the remodeling and renovation projects. Because those people weren't going to the distributor. That's thousands of cuts. All these little things that have profit margin. And we can say Home Depot buys Better and things like that. They also have a 35 to 40% gross margin. Profit is higher. Their online business is on fire.

Matt Johnson:
Yeah. It's across every product category in a way. Right, David? I remember I was thinking about years ago when I was still in the sign business, safety sign manufacturing. We sold almost exclusively through distribution. We did have a direct line, a direct website but it didn't do very much. But I remember there was the real concern that so many end user accounts started going to these online sign websites where they could just quickly personalize a sign and make a customer sign instead of calling up the distributor to get them to help them with it. 

I think that's one of a thousand different ways that online retailers are disrupting traditional distribution. I wonder if, and I think Dave said this, I don't if it was the last episode a couple episodes ago where you said to Dave, "Ask your customers who else they're buying from, if they could give you a straight answer." I think that would be very telling. I think most distributors are vastly under estimating the number of suppliers that the end user is working with, right?

David Gordon:
Right. Because they don't want to ask the question, the sales guy doesn't want to ask the question. If he asked the question, he asked it to his contact. But in a lot of these customers, there are multiple buyers. But they're not asking those type of people. 

This research that we just did, we asked, "How many do you buy from?" And the top number was six plus. It's a wide range. We asked, "How many are you loyal to?" Now the definition of loyal is really broad. Most people would think loyal should be one. In a contractor world, it was about three, three and a half. But when you think that part of that comes down to what brands, they may have certain brands that they require certain customers.

Two is credit. They're not going to put all their credit, no distributor is going to give a contractor enough credit for everything. That comes down to product availability because they expect prices to be competitive. But their quoting and buying from six and seven and eight people because it's always something that they need somewhere else. And online, broadens that out significantly. 

But Matt, you just talked about the sign business and how that was really the nascent beginning of that business changing. I've got three daughters. All three of them bought vehicles during COVID. All three bought them online from three different types of entities. One actually ended up doing it through a dealership and they all had looked at CarMax too. No compunction about doing it.

Dave Bent:
Yep, no loyalty there.

David Gordon:
No. And they all end up kind of getting the same type of car. But that next generation is going to do some things differently. Now, they may have gone to a traditional place to do a test drive or something like that, I don't know if they did or didn't. People will get information in different ways and then they'll make their decision on how to buy which is the reason distributors need to have... I don't call this eCommerce at this stage anymore

They need to have either omni-channel, meaning that they can accept the order multiple ways. Whether it be physical or electronic, because eCommerce is more than just online ordering. We've also seen text ordering, email to EDI, system to system. We've seen eProcurement. And system to system and eProcurement are now becoming different things because you can go from contractor estimating systems directly in To distributor ERP. 

So it's a lot of different scenarios. But at the worst case, distributors need to be on this service. If they have such an old ERP system that they won't be able to integrate, they've got to be able to give their customers the catalog information, the spec sheet information, ideally their pricing, ideally, their inventory. But when the customer wants it, because even a client that was a $15 million customer who...he might have 250 different contractor customers. And I facetiously say he may have gone to high school with half of them. It's very relationship-based business. But those customers, those contractors, want to have access to information when they need it because they're doing their estimates at night. They can't wait for him to be open for his inside people to return a call. When they've got to get the quote out, especially right now when business is so strong. They don't have the time to do it during the day. You have to enable your customer. It's almost akin to what happened during COVID. We're unable to be able to work remotely. 

If we had to go to the office because... And now we're dating ourselves. 25-35 years ago, there were only desktops. What would have happened if we all only had desktops that were tied to the mainframes? What would have happened to the economy last year?

Dave Bent:
I started in IT before the PC existed, so I'm really old. David, if we switch it to what is the distributor and I'll say dealer reseller because there's some other names and other verticals. 

David Gordon:
Wholesalers. Yep.

Dave Bent:
Yeah, because people in Europe are listening. What should a distributor do? So maybe I'll promote something and I know David will come back with a different perspective on it, because he does. If we look at the best distributors, resellers that have made progress omni-channel online, I think the question, I think the questions those distributors are asking their customers is the one that we started with, which is who else do you buy from and why? 

Is it a service? What is it? Who else do you buy from and why? And then the really successful guys who are pushing the online curve are, "What else do you buy for your business that I don't sell you?" To drive, okay, what's the assortment that I could sell and can I find the supply chain to manage that extended assortment and get more skews online? 

There's clearly a correlation of more skews means higher individual order value, as well as just more concentration of business with a single partner. I ask the easy question, what is a distributor to do, David?

David Gordon:
Well, first of all, the issue of going after a shared wallet is really what you're talking about.

That concept, every distributor should have that as part of their ethos within their company, worst case for their product categories. If you're a plumbing distributor, you're an electrical distributor, you need to be looking at the analytics, by customer, by salesperson, by location, thinking about what is your share within that customer, what is your product mix within that customer? 

That kind of starts with phase one. If you don't have that in your culture within your organization, then you don't have the disciplines within your marketing and sales management, you need to start there first. Because you're bleeding from a thousand cuts right there within what should be your core. The concept that some like to promote, well, the difference for distributors is going to be value added services is a falsehood. 

The reason I say it's a false hood is customers only need those value addresses when they need it, I only need that service at that point in time. I might need it long term depending upon what it is, let's say storeroom management. But if it's an arc flash training session for an audit, I only need that one time. I expect you to be able to do the basics regularly.

Then number two, is exactly what you're saying. Can you expand? As a distributor, you've got the resources, you've got the capabilities, to accept an order, drop it into your system, to warehouse it, to ship it. Those are core functionalities. You might not have the right product lines, you might not have the right specialist. But you can look at a couple of different things. A, if you get the financial resources, you can try doing it organically, which is very tough.

Number two, acquisition. The acquisition doesn't have to be big. It can be small enough to get you access to some of the lines and some of the discipline in understanding the skill sets of product knowledge, because then, we can expand that even to your existing customers relatively easily. 

There's a way to do that. Dropping more content onto a site is pretty easy. The concept of only having 10 20,000 items, whatever you stock is old school. Just as a distributor, you should have as much content on the site as possible. We know distributors, electrical distributors, so sure, a single line, a million skews on the site. Because they are carrying everything that the manufacturer has and there are some SEO benefits of doing that type of stuff too that never get talked about. 

Now if you want to get beyond that, distributors, especially independent distributors could start partnering with other local ones and create their own little mini marketplaces to use a bad term. Because I've got mixed feelings about marketplaces are ways, the selected ways that marketplaces can succeed. But years ago, in the industrial space, there was a concept called integrated supply.

Integrated supply. Yes, it was the customer wanting to have ideally one distributor who had all the different product offerings he needed because that was rare. There was a group called IPOWER. IPOWER brought together a network of pretty much around six complimentary distributors that were all industrial. There was an electrical one, a fluid power one, a power transmission one. Whatever some of the other categories were.

Is there a reason why that couldn't occur electronically? And whether that's under one umbrella or the companies are sharing it back and forth because they each have their own sets of relationships with their customers. A customer doesn't have to go to xyz.com. Make it up so that they're all going to one, there could be six different versions of the same thing.

Because the lead one is going to put up their information with technology, whether it's just content to get quoted or putting up their own pricing, that would be feasible. That will be how you then compete with the Graingers of the world, with the Fastenals, with the HD Facilities Maintenance, which is... They're basically the Grainger of the property management space. 

If you look at Home Depot years ago, they bought Interline Brands. But if you really look at what Interline Brands was, it was a collection of individual brands that were then brought together. Reed's Supply could do that tomorrow. And then just in their case, they could service it out of RDCs. But individual distributors don't need an RDC.

Obviously, the larger ones could share RDCs and do different models. So there's different things that can get done. There are some distributors who are co-sharing locations. Should they be co-sharing sites?

Dave Bent:
Yeah, right. I think so. I do. I'm just going to share just to provoke thought, maybe provoke thought, just that expansion of product offering different lines. The most effective one I've seen is a medical and equipment supplies distributor that we have as a customer, selling for hospital groups, but very specifically also focused on local doctors and dentists offices. What did he add to his product line? Business supplies, office supplies, cleaning materials and found a wholesaler who could dropship, a true wholesaler, meaning they didn't sell direct, they sold through distributors to end customers. 

But it's a simple example of what else do you buy that I could sell you? No capital tied up because he found a wholesale model that drop shipped and got a much greater share of spend and loyalty because he is servicing really the greater need of the business and one partner.

David Gordon:
There's an electrical distributor who's industrially oriented, in the middle part of the country. He did the same thing with industrial supplies. But he did a twist. He found someone who had all green, all energy, environmentally friendly. So he brought that to his customer base. 

We talk about the medical industry and it gets us talking about marketplaces. There is a marketplace, an organization called Premier, which is based out of Charlotte. They have a marketplace called STOCKD, STOCKD.com which is a marketplace for healthcare. They have 4,100 hospitals and they also let all the... You know how every hospital now has to buy up all the doctors' offices. Yeah, they've got like access to 200,000 doctors offices. They've got manufacturers who are joining that. They've got some distributors who are joining that.

That's where a marketplace to me works because it's a community of customers who need like minded stuff. Amazon is a marketplace but it's a mall. Consumers will go and they'll cherry pick. Just the digital version of a mall. 

To say that a lot of these verticals are going to create their own marketplace for a customer, let's say a plumbing contractor, he's going to order from four or five different distributors and have the individual boxes show up. Logistics, that's a nightmare. What's he going to do when he has to return? Take it to [Polls 00:40:15]? That doesn't exactly work. But in the healthcare industry, now I'm looking for different things. 

I would have been buying from all those different places anyways. In the gear industry, there's a marketplace called Gearflow. They've got some distributors there, but they also have a number of the manufacturers who have the aftermarket parts. That a lot of those manufacturers were already selling the aftermarket parts directly anyway. When it becomes community oriented like that and it's multiple disciplines, is where it makes sense. Why would you put up a mall for certain things is the kind of where the marketplace works. 

A big challenge for a lot of these distributors, once they get through the technology part which is a huge challenge, given the quality of some of the ERP systems that these companies have. I think some of the ERP systems are older than you and I.

Dave Bent:
Yes, they are. Sadly.

David Gordon:
You get through that. The product content part, depending upon the industry and the source can be a challenge. But it also... There are resources for doing some of that. The next challenge is the whole marketing and keeping it alive. It comes down to whose job it is and what the resources that a distributorship can allocate to it is based upon their size, how much should they invest to do it, to mine that data, to market back, to basically take selling virtual. Because marketing, this is where we get controversial again, sales is a sub segment of marketing.

Because sales is the human personification of messaging, getting the message out. Matt is shaking his head. He's saying, "Yep, I agree with this one." The right marketing is identifying opportunities and getting the messages out there because you don't want to sell someone on something. You want them to confirm that's what they need to place the order. How many distributors are actually signing up new customers regularly than this significant business? Very few, correct? 

Dave Bent:
Very few. 

David Gordon:
So most of these sales people that we call sales people, what selling are they doing? It's relationship management, it's account management. Therefore, the right marketing has the ability to do this. How do we mine the data online? How do we take that analytics? And even if they didn't buy it online, how do we use that information to market back and find the holes? And a lot of distributors don't have the skill sets to do this, which is what drives gaining site adoption first and then utilization because I view those two issues as separate things. 

You've got to get them first signed up and first using it for the first couple of months and then you've got to stop moving around.

Tribal Knowledge

Matt Johnson:
David, I'll just say a big part of this, that I found is that many distributors, sort of the secret to understanding the customer lives inside of the head of the senior sales reps, who have worked with those relationships for years. You bring in somebody to do marketing, you finally say, "Okay, let's actually do this thing that everybody is telling us to do. We realize we're behind." 

By the way, that marketing person they bring in has no clue. So the trick is, is getting that tribal knowledge out of the head of the sales rep into some sort of communication tool that then the marketing team can use to go out there and bring on new product lines, to run marketing promotions and campaigns that are going to be effective to those types of customers. 

We're doing that right now, as a matter of fact, with a few customers where we're working through persona development and sitting down with sales reps who have done no online marketing whatsoever, but know the customer really well. We're kind of drawing out of them the really helpful information about the customers, like what do they buy? What are their pain points? What promotions, what messaging is going to relate to them? And then we're taking that and we're applying it to digital marketing campaigns to drive growth. 

It's just like a discipline that... I think a lot of times it gets neglected, because it's assumed that we know our customers really well. And yet, we probably don't know them as well as we think that we do when it comes down to it. I think that that's part of what your research has demonstrated.

David Gordon:
Yeah. There's a lot of that. It's interesting. If you look at how distributors have compensated their sales forces over the years. There's a number of distributor sales people who have been very, very well compensated, that have lived on the legacy of their sale. Distribution never did what they did in the insurance industry, which in the insurance industry, they tear down commissions. 

Matt Johnson:
You're getting more controversial.

David Gordon:
It is called revenue development. But they still kept them with some level of an annuity, but they started high and then scaled that down. And I'm not saying you should always... There's this way of doing it. But it then makes you start wondering, especially as the industries go through some of these generational changes, could you find a salesperson who's getting towards the end of his career, who really just wants to give back and be a mentor? 

Do you convert him into a mentor, where he can mentor the next generation of sales, he can mentor inside person there to give them skill sets. He could mentor marketing and be a customer advocate internally. I'm not saying you have to cut compensation because remember-

Matt Johnson:
Generate content. Oh, my goodness. That would be so valuable.

David Gordon:
There's so much in their head and they have so much product knowledge and customer knowledge and value added services, things like that. It's not a case of trying to cut their compensation because the independent distributors keep a lot of older salespeople long term out of loyalty. 

Most don't have a forced retirement age. But those people want to give back because they've been with the company 30-40 years. It's part of their "extended family". How do you get them to move into that type of a role? How could that really help the companies? Different ways of thinking about it.

Matt Johnson:
That would be huge. Because I think that it's not just about passing that information on it because my marketing brain wants to take that information and turn it into content and SEO pages and blog articles and... But I think even more important than that is digitizing the sales experience so that the next generation of sales reps can use that content, use that experience in the way that is most natural to them. Because what's natural to them would be shooting an email or a text message to a customer with an article, not necessarily showing up with a box of doughnuts.

David Gordon:
Right. Well and when we're talking about it Matt, we're talking about digitizing the sales experience, that doesn't necessarily always have to be webifying. Could CRM systems benefit from this by having real world experience? Could the text messaging that's happening be benefited? Could the phone system and the paths that go through it benefit by having real world experience versus someone from IT saying, "I think we should do it this way." 

Where's the voice of sales internally? Where's the voice of the customer internally? It's just a totally different thought process there. 

Matt Johnson:
Yeah. I think that's where you started, right? The voice of the customer. It's where we started.

David Gordon:
It's amazing how companies lose that. 

Dave Bent:
If you're running a distribution business, what's your thoughts? We just kind of covered this slow death by a thousand cuts. 

David Gordon:
Well, I think the first thing, and this is going to be tough for some of the owners to really think about is to be honest with yourself. Are you in this short-term or long term? If you're in it long term, you have to be on the digital path.

Regardless of what definition is, you need to either already be on it or get on it for a number of different areas within your business. Two, you need the voice of the customer. It's not only an external customer, because depending upon where you are on the path, you need it for internal customers too. You can't mandate it, we've actually got some clients, where we've started putting together future think groups. It's kind of like that next generation or the generation after the next generation, where we're giving them some projects just for them to think about what the future can be. 

Whether it's digital or other areas of the business to get into, you've got to be thinking along those lines and get that voice, external and internal. But you have to act on it on a very disciplined approach. 

Dave Bent:
Very consequent way.

David Gordon:
You have to be thinking about having your own internal VC or private equity fund so that you're not putting together budgets, and then all of a sudden that budget goes away. There's dedicated funds year in, year out that are sacred, that don't get cut. Now is a perfect time for a lot of distributors. 

All the price increases that are going through, all the copper increases and metal increases and resin increases, that will improve distributor net profit dollars. On those higher numbers is a bigger number. Take some of that money, redirect it into this fund. Spend that money now and start having the appropriate definitions of ROI. It's not just quantitative, it's qualitative. Because what's the value of omni-service? Nothing initially, but it enables you to have scalability. You can't quantify that. But those are some of the things that people should be thinking about now.

How can they get a hold of you?

David Gordon:
They can get a hold of us by going to our website, www.channelmkt.com. That's for Channel Marketing Group. And if they want to get a sense of our style or learn more of what we do in electrical or follow us in the electrical industry, they can go to electricaltrends.com and follow us there. It's free and we've got over 3,000 people who do that regularly.

Thank You for Joining Us!

Thanks for joining us on this episode of the Distributor Pubcast. We hope you enjoyed the show. If you did, we'd love for you to leave us a rating and review on the podcast player of your choice, and you can learn more about us at distributorpubcast.com. This show is presented by ES Tech Group, we're here to help you grow. Until next time, cheers to your growth.

Topics:Distributor Pubcast

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