The Representor, Winter, 2012 - Marketing Group Digest

The Representor, Marketing Group Digest, Winter, 2012 Issue

Link To: CM CE ESIG IN MAPS	MARKETING GROUP DIGEST

COMPONENTS

David Norris
Norris Associates, Inc.
Hingham, MA

Demands for more market share remain reps' key opportunity
for 2012

By the time this article is pubished, we will all have survived the holidays and maybe even be starting to receive our credit card bills reflecting that buying frenzy that always seems to accompany our revelry. 2011 is now just a memory as we make those last minute adjustments to our forecasts and budgets and hang on tight to what is sure to be yet another interesting year in our industry.

Most of the conversations around the proverbial water coolers at our 2011 ERA Conference and those of our peer associations reflected a cautious approach to anticipations for 2012 market conditions. No one was talking about anything more than single digit growth for 2012, and in most instances those digits were quite small indeed.

Those fortunate enough to have attended the two premier conferences in Chicago this past October heard many excellent presentations from industry and economic pundits alike, all predicting a skinny 2012. There are, of course, many examples of how the word "lean" is applied in our industry. Those lean projections for the year will likely lead to many more lean initiatives which, as always, present both threat and opportunity, depending on whether someone has just refilled half of your glass or drained half. This writer's perspective, being a glass half-full kind of guy, underscores the continued opportunity that market conditions afford we representatives since our customers, principals and channel partners will need us more than ever, lean by nature that we are!

Somehow, though, the general consensus about anticipations for 2012 market conditions never do translate to budget time or forecasts pushed down the food chain. The process is quite a predictable one as the sales force, being closest to the customer, is asked for, in some instances, excruciatingly detailed projections only to then receive back the top-down numbers that not so surprisingly reflect double digit growth for the coming year, whatever that year is!

Certainly when you look at the specifics, of course, those top-down numbers reflect the market share growth that your principals expect to capture. Market predictions and economic forecasts be damned! Man the torpedoes, and full steam ahead to grab more share!

That may well be the battle front for 2012 – gaining share – since that's what everyone's business plan seems likely to center around. It will be an interesting year to be sure, and representatives, as always, will be on the front lines – where all the action is!

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CONSUMER ELECTRONICS

Mike Pecar, CPMR
Mike Pecar Sales, LLC
Rochester Hills, MI

Home networks keep gaining in importance

CEDIA recently released the results of a member survey that provided some startling clarity to how changes in the economy and customer preferences have impacted specialty AV retailers, custom installers, custom integrators and the manufacturers' representatives who sell products to them. Members who reported home theater as their most important category almost universally reported a substantial reduction in revenues. Conversely, members who identified home automation, lighting control and/or home networking as their major markets almost universally reported significant increases in revenues.

Audio video components, loudspeakers and other traditional product categories continue to be very important revenue sources for representatives and the customers we sell to in the consumer electronics channel. However, we're all seeing how the pressure exerted by the abundance of competition, combined with softening demand, is affecting the prices of these mature product categories. Manufacturers are reacting by participating in buying groups and/or more aggressive programs, and the reps are hit with the double-whammy of a lower selling price compounded by an often severely compromised commission rate!

Articles and editorials in trade magazines have been encouraging our customers to become home networking experts for some time now. Home automation and lighting control systems were the early adopters of the need for stable and robust home networks. Everyday there are more and more "traditional" products being introduced with new features and capabilities that are dependent on the home network. Now, in addition to control, our integrators' customers expect convenient access to streaming content from the Web. Not long ago, many of our customers were "held hostage" by the inadequacies of the network already in their customers' homes. The trend now is for the integrator to provide the home network and take responsibility for its continued reliable operation. In fact, many stipulate that, if the integrator is to be held responsible for the performance of the home automation and/or lighting control systems, then the integrator must also install and maintain the home network as well. All at once this has become both an opportunity to solve problems and a new revenue stream.

In his Market Insider column in the January/February 2012 issue of CEA's Vision magazine, Steve Koenig talks about viewing CES (Consumer Electronics Show) through the market research lens. Steve says that a trend at CES this year will be the CE concept denoting not only "Consumer Electronics" but also "Customizable Experiences." While Steve's article emphasizes the importance of accessories and applications in personalizing products like smartphones, customizable experiences are exactly what our customers' customers are looking for! Most specialty AV retailers have evolved to custom installers or custom integrators, and the successful ones have always looked for the added value that they could provide better than their competition.

As reps, we can be more valuable to our customers by guiding them into the future. Let's help them become not only the home network specialists but also their customers' total technology providers with the new growing categories of home automation and lighting control in addition to the more traditional AV products. The manufacturers of these new products also tend to be "right-sized" to work with manufacturers' representatives.

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ELECTRONIC SYSTEMS INTEGRATION Gary Ponto, CPMR GP Marketing Kirkland, WA Unified sales plans can resolve concerns of both reps and manufacturers

"How do we optimize our sales opportunities and profitability to sustain long-term growth? Should we have more direct hires, contract employees, outsource more services, use the cloud?

"More end-user calls ... dealers need demo product ... more training is needed ... target a few key accounts that will lead with our line ... add distribution partners.

"What marketing efforts are planned? What about commitment to the market channel, time commitment required, timely customer response, knowledge of competitive products and technical support?"

Can you tell if these questions and statements are from conversations being had at the manufacturer or rep level? These conversations are universally interchangeable among reps and manufacturers alike. My point is that reps and manufacturers have never been more aligned in their concerns on these topics, yet so divided on how to approach them to win.

In polling my peers for content to write this article, I continually heard of factories going direct in a territory or adding factory direct sales personnel to address a vertical market segment. Unilaterally, I did not get clear decisive answers to any of the questions I posed about what data were used to make these decisions or how the effectiveness of these changes would be measured. So I can only surmise that there are a fair number of trial sales models going on currently that are not leveraging the shared knowledge pool of what the manufacturer desires, what the territory sales force is experiencing and/or what requests to the field sales force are not financially sustainable with the current commission structure and so are initiated independent of the rep firm.

There was a terrific supplement published in Fortune Magazine in 1999, titled "Outsourcing Field Sales." This was an article researched and written by the Manufacturers' Representatives Educational Research Foundation (MRERF). It contains a lot of good information on the pros and cons of going to market with a direct or independent rep field sales force. If you are not familiar with this publication, please contact info@era.org.

I believe that reps and manufacturers who hold brief, targeted, conference calls, monthly or quarterly, to jointly focus on a unified go-to-market plan by territory will be more successful than those who do not. And most, if not all, of the questions and concerns stated in the beginning of this article will be answered. Each party can then focus on closing more business with a unified plan.

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INSTRUMENTATION, AUTOMATION & CONTROLS Tom Diercksmeier, CPMR Vic Myers Associates, Inc. Tempe, AZ Measurement and testing needs are on the rise

Alternative energy and the testing required are still very active areas with solar and wind power leading the way. Also, electric vehicles and battery technology are very active and are now including commercial power generation.

Many industries, such as electric utilities, mining and water/waste water processing, are expanding their control systems via ethernet-based I/O products. With the increasing price of gold and silver, many mines are requesting capital funds for plant upgrades and expansion. Even titanium processing plants are upgrading their facilities in anticipation of future increased prices. Ethernet and wireless I/O are very cost effective methods of adding to existing legacy control networks.

Throughout many plants, especially in the food and beverage industry, there is an increase in the number of parameters that are being measured. In food and beverage, the use of individual ingredients is being monitored very precisely to maintain individual recipes. There are two reasons for this – the accuracy of the batch for the recipe and to eliminate waste of materials.

Sensor calibration hardware sales are on the increase. The main reasons for this rise are to ensure accuracy of the measurements in the field and because of increased agency regulations. Documenting calibrators are leading the way in calibrator sales. These types of calibrators store the measured values automatically which eliminates the human error aspect of measurement.

The market for sensors and instrumentation is flat or on a very slight increase. As companies try to increase efficiencies of their products, the more testing they are doing, and this is the main driver for sensors and instrumentation.

If there are any questions, please call me at 602-329-2147 or send e-mail to tomdvicmyers.com.

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MATERIALS, ASSEMBLY, PRODUCTION & SUPPLY Troy Gunnin Sun Rep Tampa, FL Let customers' needs and wants drive sales efforts

It's a couple of days before Christmas as I write this, and the excitement and anticipation of the holidays are upon us. With all the frenzied activity, I hope we were all able to pause and remember the season and those dearest to us and give thanks for the free society we enjoy.

In that same vein, we need to pause and reflect on the past year as we look forward to 2012 and make our plans for the months ahead. The Spanish philosopher George Santayana wrote, "Those who cannot remember the past are condemned to repeat it." Let me paraphrase that. Let's learn from both our mistakes and successes, build on those successes and don't make the same mistakes again.

It seems that we as a people suffer from a great malady – greed. Things get to moving along well, and we forget what brought us the success. Then we fail to temper our ambitions with reality and the results of our actions. Then what? History repeats itself. This is true not only in business but in our personal lives as well. Take some time to look at 2011 – and maybe further back. What programs, projects or activities were successful? What "crashed and burned" around you? What made the successes work? What caused the failures to crash? Don't be bashful. Write them down. Now use that knowledge to apply to your 2012 goals and projects.

In preparing for the year ahead, we have to be ready to make adjustments, Quite simply, I don't think any of us are quite sure what the general economy is going to do, so in the words of that philosopher Yogi Berra, "When you come to a fork in the road, take it." We simply have to be in tune with the marketplace and adjust our course accordingly.

To borrow a phrase I saw in a recent article, "We must change from being order takers to order makers." That's a profound statement, but how do we do that? Again to borrow from a great sales trainer and motivational speaker, Zig Zigler, "If you help enough other people get what they want, then you will get what you want." What does that mean? Put yourself in your customer's shoes. What does your customer want/need? Think about not what you want to sell, but rather what you can supply that will satisfy that customer requirement. I don't mean that you should not be ready and willing to offer something new, exciting or perhaps "a better mousetrap." Just be sure the customer does not perceive you as trying to "push something" on him or her. Do your homework. What does that customer sell, manufacture or use? If you have a pretty good understanding of that, then you can better relate in your meeting and be prepared to offer meaningful suggestions.

Speaking of new and exciting, "green" is in. Many (maybe most) of your customers are into the green initiative, meaning they are looking for products they can use to promote their position as being environmentally correct or "green." Think about what you can offer your customers to fit that category. For example, it could be LED lighting, a major growth area ... or rechargeable batteries, a big potential for the "green conscious" person ... or environmentally safe chemicals for cleaning applications, another area getting attention. You can also be a hero and make additional sales with any products relating to the ADA (Americans with Disabilities Act). You will be doing your customers a favor to make them aware of the consequences of non-compliance. Doubters can just ask the Hilton Hotel chain about the cost of non- compliance. They just paid a multi-million dollar fine to settle claims.

Let's not forget the past. Just use it as a stepping stone to a brighter future.

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