The NAED SouthCentral was held last week in San Antonio, TX. Our schedule was chockerblock full with meetings with distributors and manufacturers. In fact, over the 2 1/2 days of the meetings, we didn’t have a break for our typical hallway meetings (which sometimes are the most valuable). We heard much about the market and about NAED.
So in the interest of segmenting our commentary, we’ll start with the NAED input we received:
- The hotel had an excellent lobby layout. Maybe one of the best we’ve seen, and was well used. The challenge was that the room rate, with taxes, was over $300 per night! Practically everyone said this was too much and could have been a deterent to maximizing attendance.
- Speaking of attendance, there were about 65 distributor companies and 101 manufacturer companies registered. Not all distributors had a one-on-one booth, and on Thursday, it appeared that 33% of distributor booths were empty.
- Everyone we spoke with ran meetings non-stopped and commented that the reduction of the meeting by one day reduced the ability for networking. With limited time, and the greatest value of the meeting being distributors meeting with manufacturers, there was less time for meetings and less opportunity for open time.
- And we’re confident that the hotel and surrounding golf courses booked less rounds.
- Some talked about NAED going to two regional meetings plus a national. The concern, however, is that there will be less opportunity for many to have meetings (it will be large distributors with large manufacturers.) And everyone expects that if this happens, manufacturers will be asked to make up the revenue. Some felt that NAED is doing a good job of marginalizing itself by reducing meeting time and continued erosion in participation.
- When asked about the national, few distributors said they were going to attend and manufacturers mentioned they’ll reduce the number of their attendees.
- We didn’t hear any comments regarding the general session or the NAED sponsored seminars. Don’t know if this is good or bad.
And now on to the industry feedback!
- Overall people are optimistic, still thinking 0-5% organic growth (and more if they are involved in the industrial business.) There was much consternation / uncertainty due to the events in the Middle East and North Africa, and the resulting gas increases.
- Many electrical distributors mentioned reasonable sales growth in 2010, with greater profit growth, however, many that we spoke with were industrially-oriented.
- A few distributors mentioned their interest in acquisitions. They’ve looked at deals, but sellers are requesting pre-recession rates while their businesses slid backwards. Some are now looking at acquisitions in other industries as a way to diversify and add complementary products.
- Practically all manufacturers have some sort of price increase being passed on. Some mentioned that they are planning a second round (and in one or two cases, a third round).
- Solar was talked about by many distributors. And some asked, “what happens when incentives / tax credits disappear?”
- Manufacturers are presenting their marketing activities for vertical / end-user markets. They are not thinking in terms of contractors or industrial, they are becoming more granular. We heard similar from reps at NEMRA. Disitributors, to maximize opportunities, should consider end-user segmentation marketing and then combining complementary products for application marketing initiatives.
- A number of manufacturers spoke to us about their desire to streamline their pricing strategies to reduce their internal transaction costs. Too much paper is reducing their responsiveness, providing too many pricing options and reducing profitability (due to productivity issues.)
- There is some concern by a number of manufacturers of “volume driven buying groups” vs. selectivity which they were accustomed to. A few mentioned that volume groups have not been growing at a rate greater than the industry rate (which was the groups’ value proposition.)
If you attended, what did you hear? If you didn’t attend (might not be your region), let us know what you think about any of the above.
4 Comments
We attended the meeting and ran like crazy also. We go to meet manufacturers, but at $300 per night, we can have them come to us, or speak to them on the phone. The value of NAED used to be networking but now I have no time to do that. If it’s all about suppliers, count us out. As they said in the Wendy’s commercials, “Where’s the beef?”
About NAED corp: Headquartered in St. Louis, Mo., the National Association of Electrical Distributors (NAED) is a 501(c)6 not-for-profit organization dedicated to serving and “protecting the electrical distribution channel.” FROM WHO or WHOM are they protecting us?
• Protecting NAED from IDEA? Don’t think so. It was about keeping a job and a personal vendetta.
• It really is all about ‘keeping their jobs secure?’ Does anyone want to bet that NAED Corp. will start draining the Education Foundation to cover the break even. They may not have to at this point, but it wouldn’t be surprising if they did.
On the another front….where is the value? We get more VALUE from our buying group.
It has become painfully obvious that NAED is still “Fleecing the Flock” even with falling attendance. You know someone may wake up and say there is way too many expensive meetings.
Ohio Electrical Distributor
NAED lost its value proposition a long time ago. The lack of vision at the board and executive level have allowed the organization to meander aimlessly into a meaningless “club” with limited benefits.
The “research” from the Education Foundation is obtuse and nearly useless, the training content is stale and frequently lacking in substance and the meetings cant decide they exist for business and seem to assume they cannot get a group of electrical industry people together without significant golf and entertainment possibilities.
Tired of self congratulatory general sessions that last forever and second or third rate speakers who have nothing to say of value? Tired of overpriced hotel rooms and group dinners where no meaningful business conversations occur? Spend the money on attending your buying group meeting where work gets done and you make money. Let NAED die. If it is needed, someone with vision will resurrect it in a useful format.
I don’t think the issue is NAED vs buying groups. Over 50% of our purchases are with non-buying group manufacturers. And we’re still paying dues to NAED. We’d like to see NAED totally rethink the meetings to make them more valuable. Times changes, meetings need to change.
When I go to my buying group meeting, I meet with manufacturers and network with others, in the fall. I would like my regional meeting to be as effective for my non-buying group manufacturers, otherwise we’ll only ever meet with a small group of manufacturers.
NAED needs to re-invent its meetings and think about making itself different than the groups.
And kill the expensive resorts. My dad and mom liked them. My wife doesn’t travel on business with me.
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