Delivering for Best-in-Class Wholesaler-Distributors
July 14, 2016  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow
NAW-6 Customer Buying Behaviors in the Era of Digital Tools

We asked wholesaler-distributors to share their views on evolving customer buying behavior in light of e-commerce and other digital tools, and then we organized responses into six common descriptions, as shown below. These findings are a starting point for each distributor to understand its own customers and for beginning to develop strategies for a new or upgraded customer experience.

Ease-of-Doing-Business Buyers

Customers are demanding easy online access to product information, prices, and the ability to make purchases. Wholesaler-distributors are feeling the heat and making efforts to meet customer expectations. It’s not just about serving customers on a website though. It’s also about customer service, technical support, and salespeople. Many distributors are building an integrated response. In their own words, wholesaler-distributors describe customer ease-of-doing-business expectations:

“Customers will go to who makes it the easiest to use and who has the quickest response time.”

—Executive, Building Materials Wholesaler-Distributor

Information Buyers

Business customers are armed with information before engaging wholesaler-distributors for a purchase, whether a first-time buyer or a customer seeking to revisit repeat purchases. Information buyers search online for prices, but also for information around products, solutions, and supplier reputations. Most distributors do not believe that the majority of their customers are seeking to migrate their purchases online, but distributors must meet searching behaviors with information on their websites and prepare all customer-facing roles to deal with an educated customer that is already a few steps down the buying process. Experiences offered by distributors include the following:

“Most of our customers do not leverage online buying to a significant degree, but they are definitely moving in that direction. However, most want to be able to get information on products and information on their orders and an increasing number want to place orders.”

—Executive, Wholesaler-Distributor

Value Buyers

All customers buy on value, but the value they seek may not be aligned with the value that a wholesaler-distributor wants to emphasize. Many distributors are sorting and segmenting their customers, often using stratification and segmentation tools, to help identify the customers that are the strongest value-seekers. Digital tools can help by providing the facts that confirm that value has been delivered, but also by providing information that leads to a conversation about value. As one distributor explained, “When customers visit our website or click on an article in our newsletter, they are leaving breadcrumbs as a digital footprint. We are looking at tools that will allow us to see those breadcrumbs and follow them back to the customer for a meaningful conversation.”

One wholesaler-distributor explained a strategy designed to create a conversation about value, with information that affects the customer’s business from the very start of the discussion:

“If a salesperson is presenting information and the customer feels like he can get the same amount of information from a document on a competitor’s website, the salesperson is not creating the value necessary to make the visit worth the customer’s time. That salesperson has failed from the start. It’s important for a salesperson to have an in-depth understanding of the customer’s business and to challenge the customer and push in a direction where the salesperson knows the customer really needs to be”.

“Imagine a customer that is thinking about switching an entire building to new light bulbs. That customer might call a salesperson and ask for information, but he’s already done his research online. The salesperson needs to know what’s out there for the customer to see and add value from the very first moment of an interaction with the customer, whether by phone call, e-mail, text, or in-person conversation. We preach that success happens in seconds. Partly, this can be done by asking smart questions. The best questions are those that demonstrate expertise and also require the customer to gather facts about the business. This opens the door for the salesperson to help the customer make a decision, offering experience and a process for designing a solution.”

—Vice President of Sales, Commercial Products Wholesaler-Distributor

Retail Buyers

Small contractors and other small business customers often have consumer-like retail buying expectations. Years ago, big-box retailers for building products and office supplies emerged to meet these needs, servicing a hybrid customer base of consumers and small businesses. Today, many wholesaler-distributors point to evidence that retail buying expectations are creeping further into their base of business customers, again shaped by their personal online buying experiences. This is true not only for contractors, but for industrial, commercial, and other business buyers as well. These customers oft en see distributors as lagging in online offerings and failing to offer a coordinated, cross-channel experience. As one distributor explained:

“Business customers that buy from retail channels have followed a migration from shopping in the big-box stores to big-box websites to expanded e-commerce options. When this behavior exists in the personal lives of our B2B customers, they bring these preferences back to work, increasing their expectations that answers and solutions will be available when they look for it or when they need it, and without having to ask for it first. This includes the customer’s choice of mobile apps, online apps, and social tools. It is not our choice to offer these, customers are demanding them. We have to be where the customers are, not just where we want to be, because when customers are using those tools, in the precise moment they are using them, they will make a choice about the supplier and product, who they trust, and who they don’t. Further, customers begin to look down on anything that they consider slow—salespeople, Internet connections, response times, answers, solutions, etc. There’s another problem. Our executives do not have a modern understanding of customer expectations. Everything we see is filtered through our salespeople who inevitably add bias according to that rep’s behaviors, strengths, and weaknesses.”

—Marketing Director, Gases and Welding Wholesaler-Distributor

Digital Buyers

Some wholesaler-distributors describe the ongoing evolution of customer buying behavior in terms of a preference for buying digitally. For these customers, their dominant buying behavior is not necessarily driven by their business needs or a shopping experience in their personal lives. Rather, it’s about their overall approach to communications and getting work done, and there is an expectation that devices and apps will be at the core of how things get done. Often, these expectations are attributed to new generations of buyers, often called Millennials. As Millennials assume more responsibility for making product and purchase decisions as customers, wholesaler-distributors will face more pressure to migrate toward digital tools. As one distributor put it, “When the next generation is making the decisions, a lot will have had to change if we are to survive.”

Another wholesaler-distributor explained that meeting the expectations of digital buyers is not just about a functional website or participating in social media. Rather, it’s about mirroring the way a digital buyer approaches work and life and proving that your business approaches work the same way. As this distributor explained:

“It is important to realize that customers are people with digital behaviors and preferences, and it’s in their DNA. Millennials grew up with games and smartphones and Facebook, and they approach life differently. But it’s gone far beyond Millennials. Customers are all using these tools and approaching work differently”.

“One implication that is not so obvious is that salespeople must have a level of curiosity and persistence. If they don’t, they won’t bring digital tools into the way they work with customers. Salespeople need to have a lot of knowledge and be willing to share it, and not just when they are in front of a customer. Salespeople can participate in social media, joining discussions and offering ideas. In the right circumstances, a salesperson can forward a social discussion to a customer. This helps reinforce the salesperson’s expertise, but also says that the salesperson is willing to act collaboratively. This is part of the customer experience we are offering to our best customers—we will work with you when you need us and when we have an idea you should hear. We are working on our definition of a healthy relationship with our best customers. It goes beyond deep and broad contacts. It goes to interactions, some of which will be face-to-face and others will be through digital media.”

—Vice President, Marketing, Electrical Wholesaler-Distributor

Traditional Buyers

Many wholesaler-distributors emphasize that traditional buying methods are still dominant, but these distributors do not have their heads in the sand. Oft en, they describe change as “our customers are changing as we do, we’re in it together” or “we can drive change, but we can’t get too far out in front of our customers.” Traditional buyers are not driving change in the way that products and solutions are acquired, but they do feel the pressure of increasingly competitive markets. Distributors cannot afford to leave these customers behind, nor can they fail to adopt new digital technologies. It’s a bit of a balancing act, as several distributors explained:

“Our customers still expect on time, in full, every time! Some are not so savvy on a business level. They still like to call and talk to a human, but that will change for them as it changes for us.”

—George Pattee, Chief Executive Officer, Parksite, Inc.

Adapted from Becoming a Digital Distributor: Strategies and Tools That Create Value

The full study shares data, analyses, tools, recommendations, and more than 250 direct quotes from distributors who provide expert advice for creating a vision and driving your wholesale distribution business forward.

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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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