On the trail to higher sales
AIS Industrial & Construction Supply leverages its A-D relationship to grow sales
by Rich Vurva
Who says business meetings have to be boring? AIS Industrial & Construction Supply in Denver transformed what for many companies is a dry, uninspired planning session into a fun, memorable event.
Near the beginning of every calendar year, AIS invites about a dozen suppliers to participate in an annual Market Summit to map out a plan for increasing sales in the coming months. A member of Affiliated Distributors (A-D), AIS follows the process established by A-D to boost sales among preferred suppliers.
Last year, to make the gathering more appealing to vendors and help build team spirit, AIS combined the Summit with a snowmobile trip at Steamboat Lake State Park in northern Colorado. Meetings took place in cabins assigned to specific vendors.
“There had already been eight feet of snow up there, so it really made for a neat environment,” says Dale Hahs, chief executive officer of the general-line distributor.
Salespeople trudged from cabin to cabin through the snow to meet with different supplier reps. One rep showed up on horseback, adding to the western ambience. The day ended with a barbecue dinner of steak, salmon and drinks.
The next day, the group snowmobiled miles of groomed trails, with experienced snowmobilers like sales manager Herb Lucier leading the way and offering tips to beginners.
The event was more than just snow-filled fun and games. During the meetings, suppliers introduced new products and suggested markets salespeople should target. The reps also laid out plans for doing joint sales calls for the year and agreed to participate in other AIS marketing and promotional activities, such as its annual open house and 32-page sales circular.
“Everybody had a great time,” says Hahs. Participating reps frequently mentioned the event throughout the year and eagerly look forward to the next gathering.
“It really helps our sales guys to focus on those lines and helps us get the local reps to commit to spending time with our guys. We try to get the regional guys from the factory involved, too, to get more buy-in from the companies,” says Hahs. “Our whole market plan revolves around the A-D Market Summit.”
A-D relationship is key
With annual sales of about $8 million, AIS primarily serves mechanical and electrical contractors. It is headquartered near the old Denver airport and also operates a branch in Silt, Colo.
The company earns Sales Stimulator Program (SSP) points from A-D for holding the Summit and participating in other activities with preferred suppliers, such as joint sales calls and training sessions. The SSP points enable A-D affiliates to receive rebate dollars throughout the year.
Hahs credits involvement with A-D for a great deal of the company’s success. About 43 percent of its sales are from A-D preferred suppliers. AIS engagement with a range of A-D programs – leadership, marketing, best practices and preferred suppliers – is typical of many of their peers among A-D affiliates, says Stu Mechlin, senior vice president of A-D’s Industrial Supply Division.
“A-D puts a structure in place that helps suppliers and affiliates work together more effectively. When they work together more, purchases go up and suppliers gain market share, while distributors’ earnings increase,” says Mechlin.
AIS also relies on A-D preferred suppliers for product training. Salespeople participate in the buying and marketing group’s new Supplier Spotlight interactive online product demonstrations to learn about new products. The online Webinars typically attract up to 300 participants for the live event, which includes a professional moderator, PowerPoint presentations and product demonstrations from the participating supplier’s facility. The sessions are recorded and archived for playback throughout the year.
“Salespeople can sit at their desk and pull up the archive and go through product training at their leisure,” Hahs explains. He’s considering offering a cash incentive for salespeople to complete a specified number of Supplier Spotlights a year.
The same suppliers that participate in the annual Summit are also prominently featured in the 32-page sales flier that’s printed in time for an annual open house in July. Last year’s open house attracted nearly 500 customers and 60 vendors that set up tables in the shelving division warehouse (a converted aircraft hangar) to display their newest products. Hahs uses co-op money and market development funds from suppliers to cover most of the event’s costs, plus charges suppliers for exhibit space.
A local caterer handles the food preparation and service. Each customer receives a copy of the flier and an AIS T-shirt.
“The open house is a good way for vendors to show off their products and for us to demonstrate to customers everything that we have to offer,” says Lucier. “Last year, on the day of the open house, we had twice the sales we’d have on a normal day.”
Showing off for customers
Products from A-D vendors are also prominently featured in the newly remodeled showroom. Completed last fall, the showroom nearly tripled in size, going from a cramped, 1,500-square-foot space to a brightly lit, neatly organized 4,000 square-foot-showplace with a polished concrete floor and plenty of floor space for displaying products.
“We use the showroom as a visual line card,” says Lucier. “Many people who come to our will-call desk might just be buying Milwaukee power tools, for example. Now they see all of the other things they can buy too. It opens up a lot of eyes.”
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| Dave Hinrichs (right) helps a customer in the new AIS showroom |
Considerable thought went into product placement. It was a given that Milwaukee Electric Tool and Ridge Tool, the company’s No. 1 and No. 2 lines, would occupy prominent locations. All A-D preferred suppliers are represented, and logos of major brands align the outer walls, along with a sign above the checkout counter that reads, “Think outside the Big Box.”
Hinrichs put high-visibility safety apparel along the back wall, reasoning that the bright color of the vests and other reflective gear would draw customers to the back of the store.
“Some manufacturers offered to send us additional displays but we had to turn them down. We think it’s important to keep the floor open for displaying other products. We now have room to display vises, presses and bigger equipment like generators and material handling equipment,” Hinrichs says. “This has a much more professional look. Our old space was very cramped.”
Hinrichs is putting the finishing touches on the display areas, adding shelf tags and bar code labels to make it easier for customers to check pricing and for a small showroom staff to speed re-stocking. He hopes to use the same technology in the warehouse, a surprisingly large labyrinth of passageways and rooms that can be difficult to navigate when searching for inventory.
“We’re hoping to change our system so that as we’re receiving material at the dock, we can scan the manufacturer’s bar code,” Hinrichs says. “It will be a lot smoother to move inventory in the warehouse and the showroom and minimize how often it’s touched.”
Although most customers still prefer to have their products delivered, Lucier anticipates that the expanded showroom will boost store sales.
AIS is coming off of a successful year in 2008. Sales were up about 11 percent, and Hahs says the company recorded its best back-to-back sales months in September and October. He is hopeful that 2009 won’t be as dire as some of the doom-and-gloom prognosticators are predicting. He’s counting on strong relationships with A-D preferred suppliers to help the company gain more face time with those suppliers, which should spur additional business opportunities.
“Suppliers are telling us that resources are going to be at a premium in 2009,” says Mechlin. “Because of the performance of A-D affiliates and the structure that we have put in place, we believe those resources are going to be much more readily available to A-D affiliates than to other distributors.”
This article originally appeared in the January/February 2009 issue of Progressive Distributor. Copyright 2009.
