Delivering for Best-in-Class Wholesaler-Distributors
July 15, 2021  |  ByJ. Michael Marks, NAW Institute for Distribution Excellence Fellow

Being on the defensive is only a strategy if you want to lose more slowly. Distributors that are willing to play offense will pay attention to three key trends in terms of customer expectations:

  • Customers expect their online buying experience to be as good as the experience in their everyday B2C life. They will not put up with an archaic ordering system. They have choices.
  • Technology natives (Millennial and Gen Z generations) do not want to speak with you. Unlike previous generations, they have no need to adapt technology to their life; it is a part of everything they do. The new expectation is to stay out of the way until you are needed. No matter how much your sales team wants you to believe differently, it is true in the vast majority of cases. Still, once you are needed, you better be fast and even proactive.
  • Things we knew with 100% confidence more than a year ago are now flipped on their head. But with the growth of uncertainty has come more opportunity. Every critical event is another opportunity for you to become “stickier” and more important to your customers. Two levers for distributors are credit and returns.

Ask yourself:

  • Is your ecommerce giving you an advantage or holding you back? Do you have any data to support your opinion?
  • Are you still “selling your customers,” or are you anticipating their problems?
  • How are you using credit and returns to build loyalty with the companies that align best with your value proposition?

Further, along with changes in the industry and in how customers buy, the pandemic incited five years of digital transformation in a matter of months. This only widened the gap between leaders who had innovated and those who hadn’t. The most successful distributors:

  • Analyze big data, actively fighting for clean data to use to guide transformation processes to cut sales costs.
  • Efficiently implement change, having used project management tools in transforming business process design for years, positioning themselves to face exponential change.

Data-driven insights can lead to thoughtful cost-cutting redesigns like replacing generalist sales reps with positions more suited to customer values to save money down the road – while maintaining or even improving customer service. Distributors need to restructure their sales organization using data and technology, and to adopt a management-directed sales approach versus a self-directed one.

The pandemic accelerated digital transformation, widened the gap between innovative leaders and those who resisted change, unsettled and increased customer expectations, and forced sales teams into remote interactions.

For a distributor to proceed from here with a patched-up go-to-market structure would be limiting and inefficient. Decide if you are playing the game to win, or just not to lose, and move forward.

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J. Michael Marks, NAW Institute for Distribution Excellence Fellow
J. Michael Marks is Managing Partner of Indian River Consulting Group (IRCG). He became a NAW Institute for Distribution Excellence Fellow in 2002. IRCG is an experience-driven firm that continues to focus on the wholesale distribution channel. Prior to forming IRCG, Mike held the position of Executive Vice President at Lex Electronics, a vertically integrated electronics distributor. Prior to that, he was Director of Corporate Training and Development at Ducommon Inc., an industrial distribution company.

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