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Contractor Talks About The Importance Of Relationships With Distributors

In this week’s Contractors Corner we reached out to Lindsey Cox at 1st Electric Contractors, Inc. out of Lakewood, Colorado. We asked an open-ended question about contractors and distributors. Here is her response in her own words.

 

If you were to ask me what 1st Electric Contractors needed from an electrical distributor in order to be more successful and grow our business, I could sum up my answer in one word: relationships. It seems so obvious, and yet true relationships in the very definition of the word—the state of two people or entities being connected to one another—is so rarely found between electrical distributors and contractors. Contrary to popular belief, we contractors don’t need more sales pitches, purchasing incentives, and the like. We need electrical distributors who want to commit to being our allies and our friends—people whom we can rely on to be our partners and help grow our business.

 

When we do a job, there are two things that directly impact our profitability: labor and material. The former is a variable that is within our control; the latter is not. That’s where the electrical distributor comes in. There are only a couple of electrical distributors that we at 1st Electric Contractors work closely with. Why? It’s simple: they have committed to partnering with us by offering competitive pricing and superior customer service. Essentially, they’re helping us control the variable of material and further increase our profitability.

 

By doing so, these electrical distributors are helping to grow our business, because as we build capital in our business we are able to increase the volume of business that we do. When we increase our volume, we’re able to buy more products from those same electrical distributors and hire more people. The former directly impacts the electrical distributor, as they will see an increase in sales, but the latter has an indirect impact on the electrical distributor as well. When we’re able to hire more people, we help to stimulate the local economy, which in turn leads to an increase in projects, which adds to our volume, and so on. It’s a cycle that the electrical distributor is an integral part of; they help to drive the cycle.

 

At 1st Electric we recognize how rare it is to find partners in business and so, when we do, we remain extremely loyal to those people and to their companies. It’s not unlike how many of us are when it comes to supporting various clubs and organizations, such as Girl Scouts. I could buy cookies, popcorn, and the like from a number of very cute salespeople. They all offer the same product at the same price. As tempting as it might be for me to purchase from the first little salesperson that comes along, I always reserve my business for my friends and their children because friends support friends. The same goes for business and for our friends at electrical distributors. I firmly believe that you simply can’t have too many friends in business.

 

However, electrical distributors establishing and maintaining relationships exclusively with the business owners or the “decision makers” at the contractors is not enough; relationships need to exist at every level of the business and within every department. Despite how large the construction industry may appear, we often find here in Denver that it’s surprisingly small; relationships truly are the lifeblood of business. It’s obvious to me that the electrical distributors we work with have discovered the importance of relationships in this industry: the counter sales and inside sales reps have relationships with our field staff; outside sales reps have relationships with our project managers and business owners; and the credit department has relationships with myself and my staff. These relationships are all important to maintaining business with a contractor. The credit department has just as much influence on sales at our company as does the salespeople themselves. If I have a credit manager that doesn’t support our company or makes my job difficult, you better believe that it will have an impact on the volume of purchases we make at that electrical distributor.

 

You wanted to know the secret to earning a contractor’s business and increasing sales? The secret lies in first establishing a relationship based on loyalty, honesty, and trust. Relationships are truly what will make your company stand out in a sea of competition.

 

Lindsey is the VP of Human Resources & Finance at 1st Electric Contractors, Inc.

1st Electric is an industry-leading, full-service electrical contractor specializing in mixed-use residential/commercial buildings as well as site infrastructure and development. They were established in 2002 and serve the Colorado Front Range and mountain communities.  Find out more about them by visiting their web site.

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