An Alternative View: Vendor-Dealer Loyalty is a Two-Way Street
Those showroom-based technology integrators who have made large commitments to vendors expect some level of reciprocity. This would include significant support on numerous initiatives like cost and terms on product demos, displays, training, promotions, technical and service support, margins and local market development funds.
When making decisions on bringing in a new line, you should be considering how this impacts existing vendors. Will this new brand bring in incremental business or allow you to compete in a new product category? What will the return be on your investment? Will this take months or years?
Remember, this goes way beyond the cost of the product but also the cost of product training, brand development and local promotions. I urge everyone to make strategic decisions and not emotional ones. Consider how this will truly increase your overall business success and profitability.
When making these decisions, don’t just look at product application, price and performance but also consider other aspects of your new vendor relationship. What level of product support (training, technical, service) can you expect? How do the vendor’s expectations compare with yours?
What are their product, Web and market strategies? Is your prospective vendor offering the fifth upgrade to a 10-year-old product line, or introducing something that is new and exciting technology?
All too often I see dealers rationalize the addition of brands without thinking about the impact on existing vendor relationships or the financial impact on their businesses—cash flow being the most significant.
Once you’ve made your decision, think about how you can maximize and accelerate the return on your investment and the overall benefit to your business. Once you’ve set up your demos and trained your staff (sales, technical and installation), consider how you’re going to promote and sell these products. Some vendors expect you to carry the load, while others support you with local market development programs.
Know what you’re getting into and challenge your vendor on every initiative. How can you benefit from them? For example, can you link to their websites? Can you benefit from their Web optimization strategy? Are there “real” corporate cross-promotional relationships you can benefit from? Many vendor strategic promotional relationships only benefit the vendor and not the local dealer. Will they support your local market development funds?
Quite often, vendors, custom retailers and technology integrators are going back to the same well. We all need to expand our potential client universe. We all need to think beyond the box. Consider what other industries are achieving. Think about who in you local market is targeting the same client base and see how you can pool your resources, efforts, events or promotions.
For example, is there a high-end decorator you could work with on a “Parade of Homes” event? Is there a local retailer of shades and drapes? If yes, how about offering to automate their shades for free so as to get all their referrals? The first referral would more than offset your initial investment.
The most successful event I ever experienced was at an Architectural Digest show. The dealer I was working with made a great presentation at the show, and in the end walked away with more leads than he could possibly follow up on.
Remember, this is a two-way street. You and your vendors would mutually benefit from the success of any of these efforts. A real partnership is one in which both parties equally benefit. Unfortunately, I believe many people have forgotten the true meaning of the term ‘vendor/dealer business partnership.’
My next article will address how your business can become more relevant to a broad client base. Until then, work on building a true relationship with all your key vendors, and work together to exploit all the opportunities in your market. •