Machine Design
Interview: Exploiting Disruptive Digital Distribution

Interview: Exploiting Disruptive Digital Distribution

In an exclusive interview with Gary Marchuk, he reveals how AutomationDirect is keeping up with the changing face of distribution in the US in the digital age.

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The Internet has acted as an innovative and disruptive force for the distribution and supply-chain industry. The difference between success and failure may very well depend on a company’s ability to work with technology in distribution. Traditional territory networks of distribution are being upheaved by companies that can leverage national coverage through the Internet. There will always be value in face-to-face time with a customer, but Gary Marchuk answers some questions on a growing industry that’s focusing more on distribution, education, and even upselling in a virtual medium.

What is your experience in the automation distribution industry?

Many customers do not realize that some of our PLCs were initially private-labeled for GE Fanuc, then Texas Instruments, then Siemens, prior to starting PLCDirect in 1994 (which became AutomationDirect.com in 1999.)  You can say our experience in the automation industry dates back years before the beginning of our company. (For more in-depth details on AutomationDirect’s experience in the industry, check out http://about.automationdirect.com/who-we-are/company-overview.html.)

When did you start moving ordering online?

Our first move to the Internet was in 1999, when we changed our name from PLCDirect to AutomationDirect, and expanded our product offerings to many more controls and products beyond PLCs.  We have grown from 200 part numbers to close to 20,000.  

How much of your company is online today?

We do just about everything that we can over the Web—account setup, sales, returns, training, documentation, drawings, magazines, newsletters, social media, articles, etc.  We even have a small team of folks that conducts online training and support regularly with customers via Go-To-Meeting. Online tools such as libraries, and the previously mentioned, provide value to customers. It gives the company the opportunity to educate customers on new products and upsell them by mentioning what works well with the products they are learning about.

What are some challenges to moving automation distribution online?

The biggest challenge is to replicate enough of the normal sales process and provide enough information for a customer to make a purchase decision. While we cannot be face-to-face with the customer, in many ways we feel our online delivery exceeds what a customer typically gets from a standard distributor. The second challenge is to provide the necessary technical support to allow customers to install and program our products. At first, many customers doubt they can get adequate technical support over the phone and by Internet, but we prove this assumption wrong every day. Our Technical support team has won awards 14 years in a row for many of our products.   

What are some key factors when doing business online?  

We try to give the customer everything he would have with a face-to-face buying experience, but do it online.  We provide all of the information a customer would need to assist with a purchase decision right up front, from technical manuals to 3D drawings. On most software products, the customer can download a full copy of the software prior to purchase for evaluation. We also provide dozens of programming videos so that the customer can see how the software products will work for his application. 

On the support side, once customers make a purchase, they can contact our free technical support to get answers to their questions. For more education on programmed products, they can subscribe to a monthly subscription of training videos. This gives them the opportunity to train on their own and move much further into the application, if not complete it.

How do you gain consumer trust online?

We are very fortunate that one of our biggest sources of new customers is referrals from other customers. Another aspect of trust is taking care of the customer post-purchase.  We have the customer at the top of our org chart, so this is a trust builder for us.

How is customer acquisition different when working online?

The customer relationship is a little less personal, since our touches with the customers are largely one-way. Our goal is to draw them to us by making the information they need available; information that not all others provide readily. Our Sales and Technical teams take thousands of calls daily, so we do have a relationship with many of them through the process. We also have a team of folks who maintain a higher level and more personal relationship with some of our larger customers that require such contact, due to their business volume or technical applications.

How can a company make proper use of search engine optimization to make sure they are being presented properly? 

SEO should be a key aspect to any company’s business, whether they do business online or through traditional methods. We are in an Internet age of instant answers available immediately on a cell phone, tablet, or laptop. So, if you are not savvy with SEO, new customers will not find you as easily. SEO is an art and a science, and certainly a challenge for any business today. The best advice I can give is to do a great amount of research, study previous data, and mix it in with some trial and error. SEO is critical to business growth. 

With many companies moving to the Web, how has this changed distribution, and what changes do you see in the future? 

I think you are seeing more and more distributors starting to use online techniques for marketing, selling, supporting, customer relationships, etc. It is just a far too efficient way of disseminating information to be ignored. I think it has always been harder for the traditional distributor to make this investment, as most are restricted by territory by their vendors. A Web presence would provide them with opportunities that they cannot take advantage of, so their investment payback is just not there.

The Internet may make life easier for many businesses, but momentum from traditional distribution might cause challenges when moving to this digital platform. Providing online resources and streamlined operations are a start, but the Internet is constantly evolving. Its dynamic environment is prompting companies to become more flexible and constantly changing the face of how to do business. 

Download this article in .PDF format
This file type includes high resolution graphics and schematics when applicable.
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