o many of the distributors
stays in touch with emphasize the value of having a personal touch with the customer, and the many things they do to go above and beyond to keep the customer happy. With so many industrial distribu-
tors diversifying their product offering to become more of a one-stop-shop for customers, it’s
harder than ever for companies to stand out from each other. Because of this, service pro-
vides a competitive edge, which was reflected in this year’s survey.
Asked to choose the primary reasons they feel customers do business with them (Figure 1),
last year respondents chose relationships and product availability an identical 80.6 percent
each. But in 2016, relationships had a 4. 6 percentage point gain, while product availability
declined 6. 5 points to second place. Technical support held steady in third at 68.4 per-
cent, while delivery time was again in fourth with a 3. 6 point drop to 62.2 percent. Our
respondents indicate that price has become more of a factor in recent years, climbing 5. 2
and 2 points over the last two years to 50.7 percent in 2016. Engineering capabilities ( 31.1
percent) and vendor managed inventory ( 30. 6 percent) had year-over-year dips of 2. 7 and
3. 2 points, respectively. After jumping 6 points a year ago, 24/7 support had a considerable
8 point drop this year to 28.2 percent,
perhaps due to customers being able to
troubleshoot problems and get answers
right from distributors’ websites instead of
relying on phone calls.
Our respondents indicate that more distrib-
utors are charging customers for services
as of late, perhaps as a result of difficult
economic conditions. In 2014, 58.2 percent
of respondents said they didn’t charge for
services. That figure dipped to 56.9 percent
last year, and stands at 54.3 percent in 2016.
Still, a majority of respondents’ businesses
don’t charge service fees, and likely include
those services in the total cost of a product.
Asked to choose which services (all that ap-
ply) distributors charge a fee for, our results
have grown increasingly salient over time.
More distributors are
for services as of late,
perhaps as a result
of difficult economic
Of the following, which do you
feel are the primary reasons your
business with you?
0 20 40 60 80 100
Vendor managed inventory
in this issue
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