Way back in 1991, Grainger promoted me into its newly-formed marketing department as a market manager for the contractor segment. To prepare for the interview, I’d read one marketing book, meaning they overlooked my complete ignorance on the subject – probably because they wanted a “field perspective,” as I had been a branch manager.
My only advantages at the time were that I knew the front lines of the company and I was very aware that I knew nothing about marketing. So, in my first few months on the job, I asked for a report of the 20 account managers who had grown their contractor sales the most over a three-year basis. I cut out a few reps who looked like they had just cut prices to sell in volume and then I flew out to make sales calls with the rest of them.
One burning question I had to answer (because I kept getting asked) was, “Why do some HVAC and electrical contractors buy a lot from Grainger and others buy almost nothing?” We couldn’t find any correlations in data to explain this. Company sales and employee count – our two typically reliable indicators – didn’t work in the contractor segment at all.
One day, I was riding with one of those “top 20” reps in Atlanta named John Peterson. We’d just made a call on an electrical contractor and I pointed to a similar – but obviously larger -- firm across the street and asked, “Why aren’t you calling on that company?”
“Because they only do new construction work,” John replied. “Not service.”
In an instant, John had explained what a bunch of us in the corporate office could not figure out from looking at the data – some electrical contractors do service work while others don’t. The service work was a great fit for Grainger while the new construction purchases were not. There was no database that contained this information and so we could have analyzed reports forever and not figured out the answer.
This seems obvious in retrospect but lots of problems look simple after you get the solution. At the time, it was a huge breakthrough that applied not only to electrical contractors but HVAC/R firms as well. We used this to develop a sales potential model that didn’t rely on the contractor’s employee count but instead on the number of active service trucks. This allowed our sales force to focus on contractors with real potential and it drove a huge turnaround in the performance of this segment for the company.
I’m a big believer in using data intelligently but some people make the mistake of thinking you can use it as a substitute for field experience. Both are very valuable but it’s when you combine data and front line experience that you get the best answers. Additionally, data primarily documents history and therefore is limited in its ability to help you identify and develop new ideas as markets and competitors change.
My last boss in distribution was John Stegeman at HD Supply C&I (“White Cap”). John is in the field more than any company president I’ve ever worked for, usually dedicating three days a week to making calls with account managers, working in branches, riding with truck drivers, etc. John could never be on “Undercover Boss” simply because there’s hardly anyone in the field who hasn’t met him. And absolutely everyone knows who he is because he communicates so extensively with all associates.
John is an intelligent user of data but he is often reviewing reports while he’s traveling to and from the field. That gives him a context for the data that you don’t get sitting in your office. The results have been very impressive as he has used that combination of analytics and front-line experience to grow the company aggressively and profitably for eight years now.
Field visits can be uncomfortable for corporate employees. It’s much more comfortable to go to a familiar office every day, surrounded by people you know and with relatively little risk of doing or saying something foolish or uninformed. And that connection to customers in the field is one of the key reasons why smaller independent distributors continue to thrive.
But if you want to be a great distribution leader, you have to understand your business where it comes into contact with customers. You’ll probably enjoy it more than you think and uncover some insight that you would not have found in some conference room.