2015 Planning – Market Indicators & Planning Questions, Part 1

This month begins meeting season.  National chains are holding their annual meetings (click here to see the agenda and sponsors for CES’ meeting), marketing groups are holding registration for their meetings and last week we received the invite for the NAED Eastern.  Along with meeting season comes planning season.  A number of distributors have initiated their business planning process, some have taken it to the next step of their marketing planning process (and are scheduling joint planning sessions with suppliers), some are just starting the process while many will wait till later in the year (and some into next year), hence reducing the amount of time they can execute to achieve their 12 month plans.

To help with the planning process, over the next few months, each Monday we’ll share some macro-economic or industry information that may help you or provide you ideas.  We’ll also share a few questions that we use in talking with distributors, contractors and manufacturers.  Some may be appropriate for you, some not, but our intent is to share questions that spark ideas through information gathering.

And feel free to share your questions or macro-economic indicators.

• A Wall Street Journal article titled “U.S. Manufacturing Rolls on Aged Wheels” shared that:
  • “domestic capital spending has remained anemic by historical standards, especially in manufacturing
  • the average age of industrial equipment has risen above 10 years
  • the long-term growth of capital spending increased 3% vs the historical average of 8%. Morgan Stanley is projecting 5.3% for 2015″

could this mean industrial growth in 2015?

• Construction lending posted the largest gain in the 2nd quarter for both residential and commercial projects … $223.2B, up 4% from Q1.  In the same article, vacancies at office buildings in the top 79 metro markets has declined to 16.8%.”  If lending for construction is up, this means those projects you’ve quoted multiple times … perhaps they are finally getting funded and will culminate in future revenue? Is your backlog starting to grow?
• From the August 30th issue of The Economist, “That sinking feeling (again)”, comes concern about Europe (especially Germany, France and Italy) going back into recession or, perhaps best case, having no / minimal growth.
  • What could this mean for electrical distributors and manufacturers?
    • If you sell to OEMs that sell equipment to Europe, there could be a slowdown.
    • Conversely, European manufacturers and distributors will be looking for growth outside of Europe. These monies could be deployed for strategy investment or for acquisitions (and with what we’ve seen with tax inversions, we now understand that some companies have tax advantages which can allow them to bid more for a company.”
• Green continues to be a growth engine for many. TPG, the private equity firm that owns much real estate, just invested in a company called SMi-Enerpro which provides customized approaches for lowering energy consumption in the real estate sector. SMi-Enerpro has to date realized average energy and cost savings of 40 percent per project. Private equity firms typically look for their investments to make money. With this deal, TPG is looking for growth from SMi-Enerpro while also generating savings for its portfolio companies.
  • Is your energy group calling on, and marketing to, real-estate developers / owners, REITs and private equity firms or are you waiting to quote projects from contractors
• If you sell home automation products or datacom products, attend this September 24th webinar (and check out the presenter).  Distributors should be marketing home automation and datacom products to commercial and home integrators, not just electrical contractors.

And we’ll share more planning information for next week.

And here’s some questions to consider during your planning process:

1. What are the growth drivers for your customers in your marketplace? (manufacturer to distributor or distributor to contractor)
2. What areas / industries / types of applications is your company focusing on for 2015? (manufacturer to distributor)
3. What percent of your sales is XYZ product category? (manufacturer to distributor)
4. How could my company better differentiate ourselves within your company? (manufacturer to distributor and distributor to contractor)
5. What sales / marketing / training tools does your company offer that we should be better utilizing? (manufacturer to distributor)
6. How could we help you be more successful / profitable? (manufacturer to distributor and distributor to manufacturer)

If you haven’t shared your 2014 Q4 outlook or 2015 early projection, complete this survey today. Did you know that currently 2/3rds of respondent are projecting only 3-6% growth for 2015?

For more information on developing your 2015 plan or improving your joint planning process, give us a call (and we’ll be at the AD ESD NAM, so if you want to schedule a meeting …)