What impact will the consolidation in distribution have on partners and vendors?
Michael Schwab: Manufacturers and distributors now have a more aligned strategy to influence how we move the business forward. Now you have fewer distributors. You have got a a group of very influential manufacturers. Ultimately, we all the have same goal of moving the business forward, growing the total available market, and foundationally building profitable growth for the ecosystem that we call the channel.
I think the alignment will never get better perhaps than what we will see this year with marketing initiatives and sales initiatives. We talk a lot about D&H putting the customer first. To us it is all about customer service.
From day one we have always talked about the customer. I am not sure that other distributors have ever put them front and center from that vantage point, but we certainly have. I think it has evolved.
It is not just about customer service anymore, it is about how do you create customer value. We are doing that by our hiring, by our marketing initiatives, with our presales support, with our professional services, with our as-a-service model. We are creating value that perhaps has never been seen to this level. For those reasons, we expect to grow.
I don’t know if the other distributors expect to grow, but we expect to grow, which is foundational in our Built For Growth model.
Dan Schwab: When you think about when you go from four broadline distributors to three, we believe the onus is on us to step up and continue to invest ahead of the curve on behalf of our customers and vendors. That is how we look at this. We already were having tremendous success and I think we offer a differentiated level of value. Just four months ago, we talked about hiring 100 people; now we have hired 150. With credit we were going to add $300 million, we are now on pace for $375 million in credit per month.
We have had a 150 percent jump in sales reps focused on emerging technologies. That puts an exclamation point on the fact that D&H isn’t interested in a revolution. We are looking to accelerate our evolution of offering differentiated value. In the consolidated marketplace, we believe it will stand out even stronger.
We believe that not being public or private-equity-owned lets us really invest on behalf of vendors and partners for the next three to five years—not driven by any external factors.
How is D&H different than a private equity or publicly owned distributor?
Dan Schwab: We are different than public entities. We really run our business differently. Whatever our budget is for the year, it changes throughout the year. When there are smart investments for pivots in the business, we respond. So it is less about a specific budget for growth. It is more about making sure we are making all the right foundational investments to support growth for three to five years. It is a dichotomy with regard to how we have the ability to think of things differently as a private company.