Wednesday, May 27, 2009

Imagine that. Loyalty.

By John Mayberry

In the world of Electronics Supply Chain Management Who really is the ‘Voice of the Customer’? Alas, many manufacturers are finally seeing the results of "end-running" their consultant and dealer networks for the last twenty years in the Audio/Video industry. You blew us off, now we're blowing you off. Turnabout is fair play, after all.

I've written at least 250 industry magazine articles during my career. As all of the magazines are highly dependent on their advertisers, the one article we we never allowed to write involved the consequences of a manufacturer's capricious sales philosophies. Even if a manufacturer stupidly sells their projector through ten thousand authorized dealerships, discussing it in print was the proverbial third rail.

Yet it would take a great many fingers and toes to count the number of now defunct manufacturers that thought end-running their traditional distribution chain was great idea because it got them that "quick sale on the big project" and "cut out a little margin" due that pesky long time dealer that wanted some margin on the deal.

Going to a trade show recently where one of these genius manufacturers was courting consultants once again after a ten year hiatus in "End-run-land", one of their sales guy asked me if I had ever heard of his company.

"Why yes. I've specified over ten million dollars of your stuff in my career, and you don't even know my name. Your firm end ran me on a couple of projects some time ago, and now you are dead. So technically no, I don't know your company."

As a general comment to some (not all!) manufacturers:

Do you even know who got stuck cleaning up the mess you made by end-running the traditional chain on your last big sale? It certainly wasn't your fly by night front operation, the newly spawned dealer that didn't know an RS-232 from an Ethernet port.

Do you know who had to get the control codes out of Asia at midnight because you no longer have any US staffing, a result of squeezing the last dime out of the product?

Do you have any idea who finally dealt with the defective product you sold the end user?

Any thoughts on who had to redesign and respecify a system (at their own expense) because your "contract manufacturer" in China went belly up?

Perhaps you/ve wondered who had to drive to the airport and pick up the non-English speaking repair staff flown in because the firmware in every one of your components was obsolete?

Pretty much everything in our industry from servers, processors, amplifiers, speakers, projectors, and displays is a commodity now. A manufacturer's real "leverage" is that someone the owner trusts that will vouch for your product.

The A/V industry really is a Small World. I've noticed a one-to-one correlation between manufacturers that have respected their consultants and dealers to those thriving in a tough time.

Any questions?