Fair Game?

Milwaukee’s Miller Park played host to the 2002 Major League Baseball All-Star game in July. Thousands flocked to the city and the stadium to take in the game, which proved to be an all-out nail biter. Finally, after 11 innings, officials called the game, which had been deadlocked in a 7-7 tied score since the eighth inning. The right decision? Reactions were deeply divided. It’s safe to say many will always feel Bud Selig did baseball fans a huge disservice when he made the decision to call the game in a tie. Others were satisfied that they got more than what they paid for.

For those with a glass-is-half-full mentality, the best way to handle a situation beyond one’s control is to make the best of it, and that’s exactly how many distributors are looking at the new format for ISSA/Interclean® — one that allows for end-user attendance on Thursday and Friday of the show. Despite some concern by distributors about how end-user presence will affect their business relationships, many are staying positive, focusing on how the show could lead to greater supply-chain efficiency.

“ISSA tries to enable commerce,” says Rebecca Pando, director of marketing for the International Sanitary Supply Association (ISSA). “We provide opportunity to each aspect of the channel. End users stimulate the process.”

Room To Grow
The largest jan/san products and services expo on this side of the Atlantic, ISSA/Interclean® traditionally brought together distributors and manufacturers. In recent years, end users were also invited to attend for a combination of sales, seminars and networking.

The addition of end users to the mix has not escaped controversy.

Eric Peabody, director of marketing for Bunzl/Papercraft Distribution, headquartered in St. Louis, thinks the change is a mistake. “As a redistributor, Bunzl/Papercraft is uncomfortable with presenting to end users. We believe our relationship lies with our distributor partners,” he says.

Ben Uselman, president of Bruco Inc., a Billings, Mont.-based distributorship, likes the format change. “I definitely think it’s a good change. Instead of end users feeling they need to go directly to the manufacturer or cut national-account deals, all parties can talk together and negotiate a business deal that will work for all of them.”

Paul Condie is one end user who is a strong proponent of the end-user presence at the show, but says that for it to work, distributors need to be present. Condie is vice president of PJS Contract Cleaners, a building service contractor (BSC) in Austin, Texas. “If the distributor is not there, shame on him. If his customer is putting forth the effort and he’s not, he’s sending the message that he doesn’t care. He’s giving his customer a good reason to go around him,” he says.

Uselman agrees. He first witnessed the open show format five years ago when he attended the ISSA/Interclean® show in Europe. “I was impressed with the wide-open nature of the European sanitary supply effort. It involved any end user that wanted to walk through the door — institution or BSC. That necessitated a broad array of interaction and interest. We need to get to that level of maturity in our industry.”

Is he worried about being squeezed out? “The customer is going to buy as he or she wants to buy,” Uselman reasons. “If his only concern is price and he can handle his own service, he’ll go directly to the manufacturer. If he’s going to rely on distribution, he’ll negotiate a price.”

Triple-Edged Sword
Uselman doesn’t just hope his customers will keep him in the picture, he is confident they will do so. The process begins when he invites customers to attend the show with him. He introduces his customers to manufacturers and together they discuss customer needs, products and service options.

Pando says it’s a sound strategy. “As they visit the manufacturer’s booth, the distributor has an opportunity to learn about customer needs they may not have known about before. It’s a great way to look inside your customer’s head. They are out of the office, they are not on phones and there are no fires to put out. It’s a great sales opportunity.”

This approach lays the foundation to what Uselman calls “horizontal integration.” His example: “We are currently aligning with a national manufacturer of cleaning materials and chemicals. Instead of us just buying the materials and buying the dispensing equipment, we will take the manufacturer’s field representatives to our customers along with our reps,” he says.

“The manufacturer will do the selling and provide the equipment and technician for installation. We will provide the customer with the logistics fulfillment,” he continues. “Training will initially be done by the manufacturers’ rep. Our people will do on-going training.

“The customer is netted into the fabric of seamless delivery,” Uselman continues. “They have a distributor sales rep and a national service technician who visit them.”

Bruce Stark, director of facilities management at Colorado State University in Ft. Collins, says the change will benefit all of the players. “It’s about building up trust and loyalty between each of the segments, and frankly, I don’t see a lot of that out there right now.”

Finding Value in Relationships
Some see only the advantages. But a potential problem arises when customers see and request products distributors don’t have.

“A distributor cannot effectively stock whatever each client wants,” Peabody argues. If a distributor is forced to obtain product from a competitive manufacturer for a customer, new tensions will arise between distributors and manufacturers, he says.

Uselman doesn’t see it that way. “Most things are available to distributors today through the intermediary distribution channel — the master distributor. If it happens to be an absolute proprietary competitor’s line then that’s when the selling comes in.” The salesperson must work extra hard to convince the customer of his own product’s merits. “That’s why they call it sales, not buying,” he jokes. “You have to help them determine why what you’ve got is better. There’s a risk, but the fact is, it’s going to happen.”

“I don’t think the distributor can expect all end users to buy every product from them,” Pando notes. But, she adds: “Research indicates end-users really values their distributor relationships. They recognize the value of having someone locally to service them. These (distributors) are the people that are going to be with them day in, day out.”

Stark agrees. “Price is the most overrated thing there is. You make that up the first time the guy comes up and services you when you need it now. If you can find somebody that services you well you need to stay loyal to that person.”

Changes Ahead?
Just about everyone agrees end-user participation will mean big changes for distributors and manufacturers. Pando says it will improve communication. “Manufacturers don’t often have an opportunity to speak with end users. When all three are there you have the opportunity to learn some things you couldn’t have learned in a closed show.”

An open show also means there will be less finger-pointing resulting from tension in manufacturer/distributor relationships, Uselman says. Instead, he predicts both will unite to better serve end users. “When all three are together they can discuss a reasonable format for horizontal integration.”

He also believes the buying process itself will change. “The more the buying process goes direct, the more it comes back to the local distributor,” Uselman says.

“There’s an opportunity with the show to stimulate the buying and selling process, but the fundamentals won’t change,” Pando adds.

Allen Rathey is an industry writer and marketing consultant with more than 20 years of experience in the cleaning industry.

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