Delivering for Best-in-Class Wholesaler-Distributors
March 27, 2019  |  ByJ. Michael Marks, NAW Institute for Distribution Excellence Fellow

Rumors of wholesale distribution’s death have been greatly exaggerated for quite a while.

A decade ago, it was the Internet that was going to kill distribution. Now, it’s Amazon. If you’ve been in the business for a while, you know there will always be something hanging over the industry like a big dark cloud.

But the truth is, the wholesale distribution industry is thriving, and the future is bright — at least for distributors that think strategically, understand the value of knowing their customers and take advantage of the customer insight data can provide.

In other words, play to win, don’t play to not lose.

For many distributors, the reflexive response to that might mean pouring more money into your outside sales force. But that may not be the smartest investment. If getting precision market data or relevant customer insight is a struggle, it might make more sense to invest in technology that can collect and process that information, and in analysts who can interpret that data for you. Today’s high-performing distributors are putting their money into technology that helps them tailor sales and marketing to fit the needs of various customer segments.

But don’t make the mistake, as some distributors do, of believing the value is in the data or the technology itself. The value is in how you, and your sales team, use that information. Think of the data as the seed that grows the oak tree.

Once you’re armed with the information, use it to deploy your existing sales force more wisely, directing them to high-potential opportunities. And those sales teams should use the data you’ve collected to craft the right conversation for the customer.

For example, some customers are only concerned with price. Others, though, value product variety or customization, while others appreciate extended credit, or being able to call with questions any time of the day or night to get answers. And yes, some still value that personal relationship with a sales rep.

Data can tell you which customer is which. You add value to that data by putting that knowledge to work for you in your relationship with the customer.

Many distributors that analyze customers’ buying preferences will find that some accounts can be more efficiently and effectively serviced by inside sales — which results in much lower cost. A sales model based on analytics, that incorporates specialized roles, and puts the right people in those roles, actually produces better customer service and improved sales coverage in the eyes of the customer.

One of the important insights data can give you is what you need to provide the best customer service. Many distributors would rather focus on what they consider the more exciting portion of the customer relationship: selling. Customer service may seem boring, but your customers are busy, too. They don’t need more drama in their day.

And when you truly understand what drives each customer, you’ll realize most want to look good to their boss, and, like you, they want to increase profit and reduce headaches. And, like you and every other company today, they are having to do more with less.

If distributors start viewing technology and analytics as tools to support a multichannel strategy and drive better customer service — rather than a way to replace people with gadgets – they can begin to drive growth by lowering expenses and enhance the customer experience without breaking the bank.

Be intentional about investments in digital, and smart about how you use data you collect. Prioritize your customers’ needs, deploy resources based on those needs and you’ll be playing to win.

To learn more about Mike’s approach to value creation in distribution, read his NAW-published books: What’s Your Plan? Smart Salesforce Compensation in Wholesale Distribution, Working at Cross-Purposes: How Distributors and Manufacturers Can Manage Conflict Successfully and Value Creation Strategies for Wholesaler-Distributors

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J. Michael Marks, NAW Institute for Distribution Excellence Fellow
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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