Delivering for Best-in-Class Wholesaler-Distributors
July 29, 2021  |  BySenthil Gunasekaran, Co-author of Seven Enduring NAW Institute Best Sellers

In our article, Tips to Manage Blind Spots Using the Growth Cube Framework, we outlined how analytics can help distributors avoid blind spots that manifest in distinct phases of growth planning and ultimately impede growth. These phases are Generate Growth, Manage Growth and Sustain Growth.

The four foundational analytics to deploy in these Growth Cube dimensions are customer, supplier, inventory and pricing analytics. Distributors can use these analytics to understand their growth opportunities and capabilities and avoid inaccurate assumptions that would otherwise derail progress.

If you’re already using these foundational analytics, you may think you’re good to go with the assumptions they drive and their potential to support your initiatives. However, there may be blind spots in your analytics practices themselves that could impact your success rate. Think of it like running an engine with the wrong fuel. Your program might run less efficiently, or it might stop altogether.

Here, we’ll give clarity around three analytics blind spots or assumptions that we recognize as common – and detrimental – in distribution growth planning today.

  1. Applicability

We’ve been publishing our research findings in each of the four analytics since 2009. The analytics methodology has evolved over the years, so today’s “best practice” is different from past years. You should check that the methods you’re using still reflect your business model and cost-to-serve. Otherwise, your blind spot may be that you think your analytics model supports the current go-to-market model, operations and cost structure when it doesn’t.

For instance, how do you aggregate customer data in the presence of e-commerce transactions against traditional locations? Have you updated your analytics methodology since adopting e-commerce? And if your cost-to-serve increased due to evolving customer expectations for value-add services, have you made the appropriate adjustments to your analytics?

  1. Alignment

We have observed how distributors adopt core analytics into their company. The implementation platform varies from omnipresent spreadsheets to traditional reports to sophisticated dashboards.

The common blind spot here is the lack of alignment with stakeholders’ workflow, leading to low-level consumption of analytics. Stakeholders have been making decisions for years without this input, building their workflows to accomplish their objectives. As part of change management, distributors should be mindful not to disrupt stakeholders’ world of decision-making and daily processes. Rather, they should design playbooks that align with existing workflows and are easy to understand and consume.

For example, we do not want sales teams to sit and analyze tons of spreadsheets. Rather, we want to provide prescriptive sales guidance that is easy to digest and results in action.

  1. Adoption

Distributors often confuse two aspects of business analytics: creating versus consuming. Many distributors diligently customize the methodology, prepare data, run analytics and build playbooks. Though significant resources are invested in this phase, this is half the battle. The hard part is making sure the stakeholders are consuming these analytics in day-to-day business to make profitable decisions. This should be the criteria for forward-thinking distributors to assess whether they’re just creating analytics or they’re both creating and consuming them.

For instance, as part of our analytics assessment engagement, we asked a distributor if they use customer stratification. They said yes and provided the details of their methodology. The model was well customized to suit their business. We followed up with our assessment and asked how their stakeholders (inside and outside sales teams) access the analytics. The distributor said that their CFO does the analysis in a spreadsheet and updates it quarterly, but no one else has access. Thus, the analytics are being created but not consumed.

Check your mirrors

Do you recognize one or more of these blind spots at your distribution company? If your analytics model doesn’t reflect your current business operations, if your implementation doesn’t account for stakeholders’ true workflows, or if you’re not providing dashboards and training to ensure analytics are being consumed and used to promote growth, the value of your analytics program is diminishing by the minute. Don’t let good growth planning go to waste. Check your analytics blind spots before you pursue a new growth initiative so you can be confident you have a clear view of opportunities and capabilities.

 

 

Driving Profitable Growth: A Distributor’s Playbook to Generate-Manage-Sustain Competitive Advantage

 

 

The following two tabs change content below.
Senthil Gunasekaran, Co-author of Seven Enduring NAW Institute Best Sellers

Senthil Gunasekaran, Co-author of Seven Enduring NAW Institute Best Sellers

Senthil Gunasekaran is co-founder of ActVantage which helps distributors drive profitable growth through analytics and talent development. He has more than 18 years of experience helping hundreds of distributors and manufacturers, while co-authoring seven books for the National Association of Wholesaler-Distributors. He also delivers executive education and speaks at industry forums. Prior to ActVantage, he led research and industry projects at Texas A&M’s Industrial Distribution program.

Leave a Comment:

ajax-loader