Distribution 2018 & beyond: What’s good for engineers is good for growth (Part 2)

Part 2 of an EEWorldonline Interview with Dan Hill, Newark element14

In this first part of this interview, Dan Hill president of Newark element14 talked to us about how the investment by Avnet in Premier Farnell has furthered the investment into Newark element14 community, the role of the community in further educating and providing resources to the current engineering workforce, and what techniques they are using to reach the engineers of the future.

In Part 2, Hill elaborates on the tactics and techniques they are implementing to continue market growth.

How is the business doing and what is the growth outlook for next year? 

I think again barring any natural disasters or any geographical, economic situations we see next year to be very positive. We’ve come off a great year. Our fiscal year ends in June, so the second half of our fiscal year has been extremely strong. We anticipate we’re going continue to grow substantially.

What would you attribute that to primarily?

First of all, we’ve had a tremendous amount of inventory investment, and the acquisition by Avnet has made that a great differentiator. Avnet had the cash to be able to invest in inventory, and we all know a function of the sales process is how much inventory you have. Our goal continues to be a mile wide and inch deep of product.

Secondly, in addition to our marketing from a community standpoint and being targeted in our focus, we are trying to grow customer count. We’ve had a fantastic year of growth in customer count — and more customers mean more revenue.

Lastly, we made a substantial investment in conducting our first America’s sales conference in 15 years where we brought in all our Outside Account Managers (OAMs) to our Richfield Sales Center in Cleveland where we have over 350 employees. Not only did those employees get the opportunity to meet the OAMs but the OAMs got the opportunity to meet the faces of folks behind the phones in Richfield.

So, it’s a combination of investment on the inventory standpoint, the marketing that we’ve done, and growing our customer base as well as giving the investment into our sales community makes a substantial difference. We know we’re going to continue to reap the benefits of that.

In the era of buy-online, how do you nurture the relationships that are still integral to a company’s success?

This goes back to our model and why it’s crucial that we attack those niches. We have over 100 outside account managers — that’s over 100 people that get in cars every day and see customers. And those customers are engineers. I like to say that we’re the geeks of the world from that standpoint because we’re physically still taking in the product and demoing it. We’ll give them samples and go from there. You can talk to someone live. You do a face-to-face, and I think that makes a big difference. I think sometimes we as an industry forget that people want to buy from people.

You can look at it online. You can do the 360-view. And online is extremely important to us. But at the end of the day, people still want to have that interaction. I continue to spend a lot of windshield time. I think it’s very important. I was just recently in Toronto with our sales team making sales calls to customers. We went to see two different engineering companies one day. They were more excited about showing us their product. They spent over an hour giving me a tour of their production facility, how they use the product, what their 30-, 60-, and 90-day plan was. And it occurred to me we’ve forgotten some of this — that the customer is excited about showing us what they’re doing.

Is it difficult to get buy-in from the management with the dollars to invests in soft marketing programs like giving away Micro Bits or Raspberry Pis or robots?

We haven’t had a problem with buy-in because those who give get. And we feel that because we’re delivering on the numbers (increased customer count and e-commerce), it’s easy for someone to say, “Thumbs up”. That’s not to say there isn’t disagreement or arm wrestling, but that’s healthy.

And some ideas don’t make it. We believe in the pilot program, and we pilot a ton of stuff, while still being good leaders and good stewards of the money. There are some projects that we’ve shot because it wasn’t the right thing or not the right time. But, if you are parallel-piloting five, six, seven, eight items, you only have to hit one or two.

And we’re being aggressive and playing some offense. To take share, and to put Newark back on the map where we need to be and aggressively to compete, we’re going to have to do some things a little differently, and that’s what we’re doing.

Let’s get to addressing the three-letter elephant in the room. What’s the impact of IoT on Newark’s business?

We think it’s tweaking to markets. Interestingly, you might think that the industrial market tends to be a little bit slower in adopting technology, but it’s ripe for whatever you want to call it, digital transformation or IoT or whatever. It’s got all the right pieces in place. There have already been connections there, but now there are new communications protocols and how do they get those?  The opportunity to educate that market, by the way, is huge because they didn’t come up in the IT world, a lot of them are plant floor managers asking, “I don’t know. Do I use mobile edge computing? Do we go to the Cloud? Do we do a hybrid? Where should the sensors be?” I’ve seen the numbers, and it’s being adopted quite quickly, and you can see it in Europe, obviously.

And you already see the impact in the numbers. I don’t think we should be waiting for this huge hockey stick. It is already coming, maybe not rapidly but it’s not going to be all of a sudden like, “IoT. It’s here. We’ve found it. We’ve wrestled it.”

What will you do in 2019 beyond what you have done to continue that growth?

Our intent is to be better versions of ourselves. We think that we have a winning recipe. We think that we’re back on track from a success standpoint. We have more feet on the street now than we have had in over five years, our employee attrition level is the lowest its been in more than seven decades. So people are staying longer, and they’re excited about being in the business. I think customer count and e-commerce growth are vital indicators for 2020, 2021, and beyond.