In today's market, distributors have to be able to provide more than product to stay competitive. "The key to customer retention and reacquisition is to understand consumer demand and contractor behavior," said Ken Jacobson, a partner at Principia, in Disintermediation & Channel Conflict. To succeed, according to Jacobson, distributors have to think like their customers.
For example, in construction markets, distributors have to reach "one step beyond" their customers to the customer's customers to understand the trends for particular product categories as far as styles, colors, textures and performance, and stock the right products at the right time in the right place.
To keep contractor customers, distributors have to think like a contractor. That means having products with strong warranties and a track record of minimal product failure to prevent returns and callbacks.
It also means having the right promotional materials to help contractors win projects, such as product brochures, sample boards and the proper training. "We’ve seen in many product categories that contractors are more loyal to the distributor or dealer than they are to the brand," Jacobson said, because they see that the distributor understands their needs.