November 2020 Newsletter: KYKLO further connects Distributors and Suppliers
Distributors and their supply partners search for better ways to support their mutual customers, find new prospects, develop prospects into customers, and generally drive growth to both of their businesses. Historically, and before the internet, joint calls were the only form of cooperative selling. Marketing efforts, while serving to develop customer awareness, were mostly conducted by the supplier with distributors pursuing any leads generated and occasionally representing the supplier in a local trade show.
With a few minor exceptions, joint marketing has been confined to co-op funds which the distributor might apply to promotional items and events. Often, these funds are spent on such things as logoed shirts, pens, and golf balls. Cooperating in some form of digital marketing makes great sense, but nobody really knew how to start.
We at KYKLO have been thinking about the situation for a long time. How might we assist in the way distributors and their suppliers connect? What makes the best sense in the new economy? KYKLO reached out to a few progressive suppliers and developed a plan.
Five Suppliers are Onboard
We are pleased to announce that five innovative suppliers have signed agreements to partner with KYKLO. In alphabetical order:
- Festo Corporation – A global leader in Pneumatics and Electrical Automation industry
- Mitsubishi Electric Automation - Part of a $40 billion global company providing a broad range of automation products ranging from PLCs and drives to motion control and robotics.
- Phoenix Contact – A global supplier of Automation and Interface and Interconnection products.
- Pro-face – A division of Schneider Electric providing state of the art operator interface devices.
- Wago Corporation – A supplier of a wide variety of Electrical and Automation solutions ranging from interconnection devices to power supplies to controllers and I/O.
Under the agreement, KYKLO will provide enhanced offerings to each of the suppliers’ extensive network of knowledge-based technical distributors. This effort will give customers served by these distributors access to hundreds of thousands of the suppliers’ products via KYKLO’s ecommerce platform. Further, KYKLO will optimize customer communications to enabling better data sharing between customers and their local distributor. New and featured products will receive priority consideration on the distributor’s eCommerce system. Using this feature, a new product will automatically appear in the distributor’s website early in its introduction phase. Additionally, entrance to the online product configurator will feature special messaging from the supply partner.
Supplier funding to assist in this operation will allow many of these distributors to apply co-op dollars to the effort of digitalized marketing using the KYKLO Program. This is an important effort for the future. Here is what John Bukowski, North American Channel Manager at WAGO, said, “We have found that distributors who have embraced webstores and ecommerce have outpaced the growth of our “normal” distributor by a factor of 2X.” This is something which independent knowledge-based distributor cannot ignore. In most instances, it is convenience not price which drives the web-based business solution. John went on to say,“One of our large corporate customers related that its tougher to get a new vendor set up than to just pay more for the product online. This is not an optimal situation as we would much rather see the customer buy from a distributor who invests in developing application team supporting the technical aspects of our product and creating new demand for our products. Therefore, it is crucial for High Tech distributors not to ignore the procurement/e-commerce side of their business.”
These suppliers believe customer behavior and the way potential buyers discover new products has made a dramatic shift over the past few years. Rather than rely on the salespeople to provide product data and technical details, buyers research product technologies via the internet. This means new potential customers are sometimes not clearly visible to the distributors. According to Sloan Zupan, Mitsubishi Electric Automation’s Director of Corporate Marketing, “The buyer’s journey has changed. Instead of gathering information from salespeople, more customers are doing research over the internet before making a call to a sales rep from either the distributor or manufacturer.”
Prior to KYKLO most technology focused, and application skilled distributors could not support an effective web-shop. While the costs associated with building a platform have decreased in price, the cost of creating product data, constantly updating new products, and maintaining high search engine optimization (SEO) were outside their reach. Further, buyers contrast the quality of their experience against mega sized companies rather than a competitor across town. KYKLO levels the playing field. In the view of Mark Snyder, Channel Director of Festo USA, “… every distributor must be looking at ways to make themselves “Amazon Proof”. They need an easy to use webshop which is optimized for internet searches as well as their traditional technical support and customer backup.”
An important step for Knowledge-based Distributors and their Partners
Theses new agreements provide a solid digital connection between customer and their local distributor. New products available via a webstore serve to compliment the distributor’s local efforts, providing an early connection to customers gathering information. Web searches for product and technology details attract what one of the suppliers called “dark side of the moon” unknown customers. Looking further, existing customers will now have a one-stop-shop for finding products serviced by their favorite distributor.
We believe this is a trend and expect other supply-partners to soon recognize the value of presented by this type of agreement. It’s a win-win for distributor and partners and an extra convenience for the customers they share.