Delivering for Best-in-Class Wholesaler-Distributors
June 8, 2016  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow
NAW-3 Reasons Why Successful Distributors Adopt CRM

In writing my book, Getting the Most Out of CRM, I asked distributors to describe the rational for their “go” decision to adopt Customer Relationship Management (CRM), and they gave me three:

1. Adopt it because it’s the right thing to do Even if a wholesaler-distributor can’t envision how CRM will immediately improve the performance of salespeople, there is a nearly universal consensus that management will make better, faster decisions through the use of the customer information that CRM can provide. Gains come first by having information on hand to make business decisions as competitive situations emerge, replacing the need to manually gather data from salespeople. Soon, an established CRM capability leads to improved forecasting, territory design, and sales incentives, all of which improve sales productivity whether or not salespeople see a short-term benefit. This approach is practical, if not altruistic. Many wholesaler-distributors said that CRM is becoming a condition of employment for salespeople.

2. Use CRM to address a strategic challenge Don’t justify CRM on its own, but as part of a larger initiative to meet a business goal such as improving margins. As one wholesaler-distributor explained: “We didn’t buy CRM to manage the sales force; we implemented CRM to improve our profits.” This wholesaler-distributor pursued other actions in parallel. Legacy product lines were dropped in favor of new customer preferences. Discounting practices were improved to have more management oversight. New analytics were put in place to track profits by segment and region. The CRM tool helped to enable all of these changes, and in the end, a better sales management process was in place. But it was the business-wide emphasis on improving margins that won the day.
3. Find new ways to differentiate and compete The best example of this rationale for CRM was summed up by a sales leader who said, “We told our customers that our service was better, but it wasn’t. Not really. How could it be? We hired the same kind of salespeople as other wholesaler-distributors and didn’t teach them anything different. Now, we use CRM to put customer information in salespeople’s hands so they can prep for each sales call and demonstrate the increased business our programs will create for our customers. Other wholesaler-distributors may follow a similar process, but we prove it with data. Some of our salespeople had trouble with this approach, and we replaced them.”

Adapted from Getting the Most Out of CRM: Best Practices for Wholesaler-Distributors

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Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer founded the Network for Business Innovation to drive awareness, advocacy and excellence for B2B innovation, and to enable an exchange of ideas between leaders on business transformation, technology adoption, social impact and community engagement. For more than 30 years, Mark has worked with leading companies to achieve go-to-market excellence across a wide range of industries in developed and emerging markets.

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