What Defines Contractor Loyalty to Distributors?

In a “down” market, are contractors loyal?

And the definition of “down” depends upon where you are and what you compare against. Versus the “go-go” days of the past year? Yes, then many are down, or not having the same level of growth. If versus a historical benchmark? Then the market may be close to normal, excluding commodity differences.

The electrical market is experiencing a rather “nuanced” year this year. Nationally, the market is down significantly over the past two years. Much is driven by lack of price increases, an improved supply chain, and a change in commodity prices. Digging deeper, the market varies around the country and by market segment.

You don’t want to be in the resi market in California! The industrial construction market in many areas is good … especially if you’ve won one of the large EV-related projects or industrial reshoring is benefiting your town! Perhaps you’re benefiting from solar gains due to the Inflation Reduction Act or your city has benefited from IIJA money funding a project.

There are different drivers affecting the market … and your customers.

Are my contractors loyal to me?

Many ask if we’ll have a recession. Technically, maybe, but there is money flowing in the electrical industry as also evidenced by the phrase “try to find a contractor” in most parts of the country. The question becomes, however, for a distributor “how do I keep ‘my’ contractors loyal to me?” while we all recognize that contractors do business with multiple distributors in every market.

It begs the question, “what defines a ‘loyal’ customer?” and “how to engage with a customer?”

With some distributors beginning to think about their 2024 strategies and ideating marketing ideas, I thought it would be a good time to ask distributors these questions.

Channel Marketing Group is working with a client to better understand how distributors think about these issues, and we need your input.

Key areas of this quick survey include:

• 2024 qualitative goals (no numbers, no forecasts!)
• How distributors plan, and fund, marketing?
• How do distributors define, and measure, customer (contractor) loyalty … and do they believe their customers are “loyal”.
• What drives customer loyalty, according to distributors.
• What marketing activities are offered, but more importantly, work?
• The role of promotions, rebates and incentives in engaging customers and if they facilitate “loyalty”?

The survey should take about 5 minutes to complete and will give you helpful information to support your 2024 marketing planning.

We need your input by Wednesday, August 23.

All input is confidential. We’ll share electrical distributor specific results next month and you’ll have the opportunity to receive a free report, register to win one of 20+ awards including a sports vacation, and be invited to a webinar where multi-industry results will be shared.

This survey is only for distributors. (If you’re a manufacturer and are interested in the findings, send me a note and I’ll advise when findings are available.)

Winning in 2024 will require a new playbook. While the market, from a growth perspective, may remind many of yesteryear, tomorrow’s “battlefield” is different than 5 years ago. Insights from the survey will help, as will a new perspective (so give us a call.)