“When All You’ve Got is a Hammer, Every Situation Begins to Look Like a Nail.”
Managers and leaders of companies often resort to the same familiar strategies and tactics over and over again. But when the strategies and tactics are time-proven and sound—then go ahead and hammer away.
In 2008, I found myself switching the industry in which I worked. Behind me was a past comfort and familiarity with traditional, two-step distribution of products. Not without challenges—the model worked—and I felt that the organization I worked with “did wholesale distribution particularly well.”
As one of Andersen Windows shrinking number of independent distributors across the nation—Hampton was awarded an exclusive agreement in 2002 as an exclusive distributor in Northern California. Hampton was chosen, I believe, because the people there excelled at more than moving boxes and putting on product knowledge meetings. Our success was the driven by:
An acute understanding that we served two customers: those we sold to—and those we purchased from. We knew we had to satisfy the needs of our suppliers—or we wouldn’t have the products, services, and support we needed to satisfy the needs of our customers. Better quality, lower costs, and continuous improvement weren’t just slogans. They materialized in the form of tens of thousands of dollars in investments in Lean Technology , customer rationalization to align with leading customers, and a commitment to excellence in every area of our business that was measureable and specific.
We benefited from understanding happens until something is sold. And that sales and marketing are king. We had more sales people, more customer service, more educational programs, and more sales promotion than most companies in our position.
And so when I found myself switching industries and going to work for a company in the midst of a product launch—the decision to accelerate market penetration through wholesale distributors was an easy and comfortable one.
The company I went to work for, FAFCO Inc, the world’s oldest and largest manufacturer of solar collectors, was in the early stages of launching a new product for home solar water heating. Most of the company’s 40-year history was spent selling its products through a small number of direct dealers—mostly in California and Florida. However, to gain the traction and drive the volume the company had targeted through new market segments—a distribution strategy would be critical.
FAFCO was actually embarking on a path quite opposite of some popular trends—and moving from a direct sales model to dealers, to one incorporating wholesale distributors. The strategy was underway when I arrived—which was one of the primary attractions to joining the organization.
With the scale of the opportunity for its new products, the company was going to need a supply chain model that could reach the thousands of plumbers throughout the U.S. that will become its primary installers of the new product. The distributors in the markets we targeted, and the reps who called on them, could quickly put us in front of dozens, if not hundreds, of our targeted contractor professionals. It would have taken massive amounts of promotion and field selling for us to accomplish the same through a direct model.
What’s more, we put inventory into the market, had service and delivery up right away, and moved forward with a great deal of scale, strength, and momentum in our choice markets.
Distribution serves so many important roles. In our case, as a smaller company launching new products—distribution gave us:
· Instant access to our target customers · Knowledge of the market · Inventory, service, and volume
These are also among the oldest reasons there are for using distribution with success—pointing again the the fact—that a hammer, employed correctly—is always the most effective tool for “nailing it.”