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Commentary: Create Growth in Shrinking Accounts

There is concern even as 2004 finished with strong numbers in U.S. machine tool consumption (article in this Industrial Markets Update section). There has been a healthy capital spend at plants over the past year. But with incentives ending in December, the question is how this first quarter will shape up.

We've heard some continued strong numbers for January anecdotally, but overall off the fourth-quarter pace. Few distributors argue that there will be fewer capital projects driving business than in the past. The good news is that many customers have increased production levels and corresponding MRO spend.

How much influence do your people have in these key growth accounts to work on the capital side instead of reacting to MRO contract bids? Can you go beyond responding to scheduled capital projects to create additional budget allocation to solve production problems, lower costs, or increase efficiency?

If the key buying influences like your performance, then you may have an opportunity to go further. The key is to develop relationships with those in operations, not maintenance or engineering or purchasing. The people in operations will give you the problems and opportunities to solve bigger problems.

That's the focus of Bill Hodgdon's lead article in this issue. With capital spending increasingly diverted overseas, how do distributors find ways to create spend at accounts where your salespeople were focused on carving out pieces of the operating budget and occasional capital spend projects?

It's a different and often more complex sales process than traditional MRO, but increasingly that's where we are hearing the advances in building deeper customer relationships and growing the topline.

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