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Secrets To Winning Contractors' Business

Aug 29, 2008
The HVAC industry grew up on personal relationships between wholesalers and contractors. Now, converting these familiar relationships into real business partnerships is a goal of many wholesalers, Why? Because wholesalers want secure revenue stream that result from contractors' business loyalty. Wholesalers know contractors are increasingly willing to work with those who make business easier and walk from those who don't.

Today, times are hard for HVAC contractors. New companies are entering the market and taking business from existing players. The labor pool for qualified staff has tightened. As parts and equipment become increasingly sophisticated, purchasing and training have become more complicated. Not least of all, contractor margins are dropping. Contractors know that the wholesalers who help them will be able to give these contractors a competitive advantage.

So how can wholesalers create a business partnership? Ironically, it's through SERVICE, from telephone etiquette to honoring a delivery commitment. Excellent service translates into trust. Trust leads to an ongoing business partnership and revenues. Service - it's the new name of the game.

Here are 5 ways wholesaler organizations can use service to become better business partners with contractors. Some are common-sense ideas, while others point to the wave of the future.

# 5 Avoid hidden costs, such as freight and shipping- especially for small contractors. If respect and trust are keys to keeping long-term customers, make it a point to tell contractors upfront about costs they will incur but are not necessarily the cost of the product. One contractor made a special order without knowing there was a $75 dollar special order charge. The wholesaler failed to quote this charge when he estimated total expenses. Therefore he did not include it in the price to the customer. In the end, this contractor had to pay the $75 and absorb it from his own profit margin.

# 4 Provide training. Contractors say a wholesaler who provides training world be difficult not to do business with. Most say with the increasing sophistication of HVAC products, training on the electronic parts is an essential ingredient of staying in business.

Hutchinson Plumbing, Heating, and Cooling in fact said today's workforce expect to be trained especially given the equipment sophistication and growth in electronic parts. Hutchinson invites manufacturers to its site for workforce training. But they'd send staff to wholesaler-sponsored training in an instant. Providing training demonstrates a wholesaler's willingness to be a business partner and shows expertise in the industry.

# 3 Don't commit to what you can't deliver. If a wholesaler doesn't carry a part, doesn't have one in stock, or can't get one overnight, the wholesaler should not commit to delivering the order. Industrial Valley Service says one of its most loyal wholesalers will occasionally suggest another wholesaler who stocks an item when it isn't able to deliver. For Industrial Valley Service, that means getting the part on time, without the hassle of trying to find another distributor themselves. Instead of losing Industrial Valley Service as a customer, the loyal wholesaler has earned Industrial Valley Service's respect. Being confident in the materials he does carry and in the service he offers, the loyal wholesaler is happy to help his contractors find other sources on the occasions he cannot help them.

# 2 Deliver accurately and on time. Without exception, this is the single biggest reason a contractor will stay with a wholesaler. Contractors count on receiving a delivery as ordered. They coordinate the people, machinery, temporaries, etc. to do a job at a designated time. Since labor is the biggest variable in a job, if the parts aren't there, the contractor's money is wasted.

And partial shipments aren't enough. Contractors expect to receive the full shipment on time. Wholesalers who know there will not be a full shipment should call the contractor, even late the night before, to advise them of the problem. Most contractors would rather receive this late-night phone notice than find out the next morning.

# 1 Know your contractor. To implement a truly effective service approach, the wholesaler needs to know his contractors. This means keeping notes on the contractor's size, business focus, geography, and payment history, among other things. It might also mean keeping notes about hobbies. It's not relevant whether you keep these notes on the computer, on note cards, or in a look-leaf binder. Just having knowledge of the contractor is critical to building that trust and business partnership that will keep the contractor returning. A tip: Use the notes carefully without ever letting the contractor, or any other customer, know your method of remembering details about your contractors' business.

What about price? So does all this talk about service mean that contractors don't care about pricing anymore? On the contrary, they do. Underlying this discussion about service is the assumption that one wholesaler's price is as competitive as another's. Contractors will drive half a mile down the street to get the best price if they have to. Service is now the differentiator, all other things being equal, and is the key to building and maintaining business by business-savvy wholesaler.
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