Closing the gap

Our exclusive survey conducted with the National Association of Hose and Accessories Distributors shows that distributors and manufacturers are far apart on perceptions concerning salespeople expertise and training. Its a gap that must be narrowed.

by Richard Vurva

Ask distributors and manufacturers to rate the quality of distributor salespeople and youre likely to find widely divergent views. Distributors think much more highly of their salespeople than manufacturers do. But just how far apart are their opinions? Is the gap based more on perception or reality? What can be done to close the gap between the two?

Those are questions that distributors and manufacturers need to ponder in light of an exclusive joint survey by the National Association of Hose and Accessories Distributors (NAHAD) and Progressive Distributor magazine. The survey uncovered opinions on a variety of topics, including the quality of distributor salespeople, the quality of product training support that manufacturers offer distributors, perceptions about the relationship between distributors and manufacturers, and the impact of the Internet.

More than 90 percent of distributor respondents describe their salespeople as either masters of hose and accessories or very knowledgeable. Roughly half of manufacturers describe distributor salespeople the same way.

Whats more, nearly 50 percent of manufacturers say distributor salespeople are run-of-the-mill or need remedial work/pitiful. Those are discouraging numbers, particularly if you assume that manufacturers are referring to the distributors who carry their product line, not distributors in general.

I dont believe distributor salespeople understand product as well as they could, says Ron George, president of Federal Hose Manufacturing, Painesville, Ohio. Its not that they arent capable, its that theyre handling so many products.

He says the challenge to manufacturers is not just to sell more product through distribution, but to train distributor salespeople.

Yet the survey also reveals interesting answers concerning product training.

Asked to rate the quality of product training provided by manufacturers, 50 percent of distributors say it is less than 5 on a scale of 1 to 10. Fewer than one-fourth of the distributors give it a 6 or higher rating.

Although manufacturers rate themselves somewhat higher, 40 percent of their answers fell in the middle range (4 through 6). Only 11 percent rate their training at the high end of the scale (9 or 10). Clearly, no one is overly excited about the quality of product training support that manufacturers currently provide to distributors.

Sometimes when manufacturers come in to do product training, all theyre doing is going through their catalog, says John Mork, Gooding Rubber Company, La Grange, Ill. What were looking for is information on special uses for the product, application information or information about industries where we can take their products.

Mike Summers of Summers Rubber Company in Cleveland says much of the product training from manufacturers is mediocre. One problem, he says, is the lack of experience by the trainers.

There are too few of these folks. If they do understand their products, they dont understand how we use it, Summers says. Or, in the case of a hose seller, he doesnt understand the fitting interface. When we train our folks, we need both. There are very few out there who can train on the hose assembly.

What do the results mean? Almost no one disagrees over the need for product training, particularly since two-thirds of distributors and manufacturers agree that end-users will require increased technical support in the next five years. But manufacturers and distributors continue to struggle with how to find the time for such training, where to obtain it and who should pay for it.

Were 110 percent committed to training, says Jack Romain, manager of distribution relations for Goodyear. We think we do an excellent job of training and making sure that our distributors understand our product line.

Of course, some manufacturers contend that training distributor salespeople is not their responsibility. As a manufacturer, we go to market through independent manufacturer reps, says one manufacturer. Theyre pretty well-trained, but I dont know if that training gets effectively fed downstream to distributor salespeople.

He believes that manufacturers with direct sales forces ought to shoulder training responsibility with distributors, but says manufacturers without direct sales reps in the field shouldnt be expected to bear that burden.

Joe Thompson, NAHAD executive vice president, says the disparity of opinion between distributors and manufacturers about the product knowledge of distributor salespeople and product training from manufacturers points to the need for the association to continue its progress in developing hose assembly guidelines and the NAHAD Institute. For a progress report on the training and education committee effort, see the story on Page H-16.

What were doing relates directly to these issues, Thompson says. Were giving manufacturers a chance to help build a training model thats going to help distributors train themselves.

Most small- to mid-sized distributors have never planned for and budgeted for adequate training and education of their workforce. Part of what were doing is educating the owner/managers about the importance of building this process into their business plan.

Marketing support
Another topic where there is a divergence of opinion between distributors and manufacturers concerns marketing. The survey asked respondents if they agreed or disagreed that manufacturers believe they need marketing assistance from distributors. More than three-fourths of distributors and manufacturers agreed with the statement.

However, when asked if distributors are doing a good job marketing for manufacturers, nearly 72 percent of the distributors agreed, while more than 70 percent of the manufacturers disagreed. The results clearly indicate that theres room for improvement in communicating the goals and expectations between channel partners.

1998 sales results
Sales were strong in 1998, according to distributor and manufacturer members of NAHAD. Although most NAHAD members maintain positive expectations for 1999, there are concerns about how much of the sales growth is fueled by merger and acquisition activity and by lowering profit margins.

Many industry insiders also wonder what impact alternative sources of supply for hose and accessories products and services such as integrated supply and inroads by power transmission and fluid power distributors into the channel will have on the industry.

Will strong sales continue?
Nearly one-fourth of distributors and one-third of manufacturers who responded to the joint survey conducted in early January say sales increased between 6 percent and 10 percent in 1998. Almost 20 percent of distributors and more than 20 percent of manufacturers reported increases between 1 percent and 5 percent.

But 1998 wasnt positive for all members. Slightly more than 18 percent of distributors say sales decreased in 1998 and nearly 14 percent say sales were unchanged from 1997.

We had 3 percent growth in 1998, says Tom Slater of Rubber Supply Company, Morrisville, Pa. Historically, weve been fortunate enough to get a 7 percent to 8 percent increase every year since Ive been here. This is the first year we didnt.

He expects sales gains to return to historic levels in 1999.

Slater adds that some of the companies that reported larger sales gains did so by acquiring other companies.

Business has been good, says Brent Howell of Texas Rubber Supply, Dallas. We were up around 20 percent in 1998, but we didnt do that much profit-wise because we took so much low-margin business.

In addition to pressures on margins, some NAHAD members are concerned about the impact that alternate channels of distribution will have on hose and accessories distributors. Nearly 75 percent of distributors surveyed say they lost sales to other channels last year, including power transmission, fluid power, general line distributors and integrated suppliers. An overwhelming majority (60 percent), say alternate channels siphoned away between 1 percent and 5 percent of sales.

One reason that national chains and distributors selling integrated supply to customers have succeeded is because they focus selling efforts on top management at large customers, say distributors.

Many smaller distributors have concentrated their selling efforts at the plant level, Mork says. Integrated suppliers have done top-down selling. Theyve convinced top management this is the direction to go. In many cases, the smaller distributor has a story to tell, they just dont know how to get the message to top management at larger companies. 

This article originally appeared in the March/April '99 issue of Progressive Distributor. Copyright 1999.

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