Leff Electric isn’t shy about letting its customers know exactly what it’s willing to do for them. Its 250 top-selling items are in-stock at all times. The distributor boasts 100% order accuracy, and also guarantees a 25-minute call-ahead for will-call orders. And if it misses any of these “customer service guarantee” targets, the Independence, Oh.-based distributor pays out $25 for the trouble.
Knowing that its electrical contractor customers are working under time and resource constraints, Leff Electric also works alongside them, helping them win jobs. A customer that’s working on a large project, for example, can review its drawings and decide how many boxes, receptacles, switches, and other items it needs to be able to complete the work. The contractor knows the labor component (i.e., $15 of time to install an outlet box), but needs a quick, accurate picture of the actual material costs.
That’s where Leff Electric comes in. Using the NetPricer service, the distributor helps contractors figure out exactly what it’s going to cost to complete a job, and then use that information to submit their own bids. “The platform tells them exactly how many fittings, bushings, and other items they’ll need,” says Gary Pelc, VP of sales and marketing. “It gets that granular and detailed.”
Pelc says that level of granularity is becoming a must-have in today’s construction world, where jobs are getting extremely competitive. “Contractors needs to be able to quote their projects as accurately as possible because there’s no ‘slush’ in these jobs anymore (i.e, extra funds for cost overruns),” says Pelc. “In a world where commodity prices fluctuate weekly, we try to help by providing real-time pricing that’s updated on a more frequent basis than [our system] even is.”
By connecting with estimating packages like ConEst, Accubid, TurboBid, and others, platforms like NetPricer are helping to connect contractors directly with their distributors in real-time, and without having to pick up the phone, send an email, or pay a visit to a local store.
The contractors pay for the service (Esmarts’ NetPak Subscription is $88 per month and connects contractors to pricing from a single distributor; additional distributors are $15 per month each). And, if the distributor branch that the contractor is doing business is already connected to the service, then it can add on that contractor at no additional charge.
“Contractors don’t really want to spend any extra money if they don’t have to, but the reality is that once we show them the benefits of using this with their estimating software tool, the investment becomes pretty minimal for them,” Pelc explains. Getting that point across does require some education on Leff Electric’s part, he adds, with a key focus on how quick access to the data online helps contractors win jobs. “At this point, many of the more progressive contractors have gone out and paid for the service,” says Pelc. “Would it be better if the service was free? Sure. But would the process be easier? Probably not.”
“I Need to Buy This Job”
At Leff Electric, every contractor has its own price files loaded into the bidding platform. “Each salesperson is responsible for ensuring that the pricing is accurate,” says Pelc. That way, when a contractor places an order, it’s actually turning over its bid list and saying, “I need to buy this job.” And because the “grocery list” is already made up and priced out, the path from bid to order is pretty seamless and automated.
“The legwork’s all been done by that point,” says Pelc, “so we can just match everything up to the individual products and then deliver the goods based on the quantities that the contractor has put in place.” That process aligns well with the distributor’s vendor-managed inventory (VMI) offering, which it calls “Leff Managed Inventory” or LMI. Because the preliminary work or “site survey” for the LMI relationship is done through the automated system, the distributor has a good idea of what materials the contractor needs well in advance.
“The platform basically helps us diagnose what the contractor needs and at what points of the job they’re going to need certain materials,” says Pelc. “Having all of this intelligence in advance—and that fact that our contractors are tied right into our system—helps us communicate more clearly and become a true ‘partner’ for them.”
Wanted: Weekly Updates
As the business world becomes more and more automated, more electrical contractors are asking for streamlined, online ways to get pricing, place orders, and interact with their electrical distributors. “Our customers are demanding more of this,” says Pelc, who would like to see his company start making more frequent updates to the customer pricing that resides in the online platform. “Our goal is to start doing that on a weekly basis, but right now it’s taking place about once every three weeks.”
More frequent updates would be especially useful on the commodity side, where products like wire and pipe change price on a regular basis. “Pricing on fittings and receptacles doesn’t change much,” says Pelc, “but having a weekly, automated upload of pricing on commodity-related goods would help us make sure we’re hitting benchmarks (e.g., those metrics that are put in place to make sure prices have been updated within the last 30 days).
Guiding Distributors Down this Path
To electrical distributors that are considering an online bidding platform for their customers, Pelc says one of the biggest benefits is being able to use Leff Electric’s part numbers in the system. “Most contractors don’t know Raco 232H, but they do know that they want a box that has certain fittings on it,” Pelc explains. “Using the information that they input in the system, we can specify our materials with the goal of having them come back and place the order with us.”
There are also challenges to using an automated system. De-listed parts and/or changing part numbers in fast-moving product sectors like LEDs, for example, takes time and effort. “The devaluation of LED products is a real concern for us,” says Pelc. “We have to make sure we have the most current products in the system, and that someone doesn’t go in there and say, ‘Okay, here’s something that’s been de-listed by the manufacturer; you no longer have these.”
“There’s really no good solution to this problem; it’s just trying to communicate a little better with our vendors,” says Pelc, who expects more contractors to start asking for—and using—web-based bidding systems with their own distributors. “As distributors, we have to listen to what the customers are asking for, and that’s how we came up with this solution,” says Pelc. “We didn’t lie awake at night saying, ‘How can we change this quote process?’ Our customers basically are guiding us down this path.”Tagged with contractors, Leff Electric