NAED Eastern Update

Busy couple of days here at the NAED Eastern, with more meetings today, but we wanted to share some thoughts and observations

1. Attendance appears to be about 600 with 74 distributor companies registered
2. The economic mood appears to be a little “ambivalent”. Aside from resi, people seems to be looking for slow growth … 2-4, 3-5%, with the first part of the year fair, the second part questionable if not down a little.
3. We attended the General Session. The national anthem was sung by NAED’s producer (yes, they do have one), and he has a great voice … maybe should do it more often. Tammy nicely presented some of NAED’s tools, showing examples of successes which hopefully will encourage accelerated adoption. Her priorities for 2008 appear to be continued adoption of the SPA Process, the Supplier Scorecard and IDEA. Her message was while there can be innovation, implementation is essential to reap the benefits. And the industry learned that some people think Dan Gray, Independent Electric, is handsome!! Dan also did a nice touch by remembering Andy Walsh and Harold Leviton.
4. We attended two of the educational sessions (yes, a first). They were the 2007 CAP financed projects…Product Liability and Resi Upgrades. If you attend the Western and SouthCentral, worthwhile sessions as the presenters are probably some of the best “educational” speakers that we’ve had in a while, and the topics, especially
   the liability topic, is extremely relevant for just about everyone.
5. Bottom line on the CAP studies (and not just because they both mentioned our recent work on private labeling):

Resi -While the market is about $8-10B according to Mike Marks, which is
10-15% of ED, the research shows that 1) a very high percentage of builders want reliability from their contractors and are not concerned about brands and 2) the contractor is concerned about price and product availability. The bottom line commonality … neither want callbacks, hence limited interest in upselling, especially when electrical represents only about 4% of a house.
Neither wants call-backs, so don’t want to take any risk. Work we are
doing with some clients correlates with this.

Product Liability – very informative and detailed session. Highlighted
liability issues, risks and the risk of focusing on price vs. contracts …
distributors need to focus on supplier due diligence to protect
themselves!

• Met with a number of manufacturers… a couple of things
• Energy / Green is on most manufacturers’ minds. They’d like to see
  some type of cohesive industry effort (Got Milk campaign?) They’ve
  seen some individual distributor successes, know others have plans, but
  haven’t seen much in execution or demand creation. They feel that
  there is plenty of opportunity for progressive distributors.

Manufacturers are seeing / sensing that national distributors are starting to “fill” the role of supply chain providers … product transferers whereas independent distributors have the potential to be their growth
initiators. The difference … chains are executionally
challenged.

Everyone talked about training, how much is too much, what percentage of time should be allocated to it, the need to train on how to sell and upsell
… but no one has answers, especially recognizing that everyday business still needs to get done.

Overall a good meeting, albeit a little subdued. Bermuda is a nice place, albeit would have been nice to smell the ocean air!!

(sorry about some of the formating challenges … but need to get to a 6:30AM meeting!!)