Delivering for Best-in-Class Wholesaler-Distributors
January 17, 2019  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow

Looking ahead to the coming connected world, consider a scenario in which all transactions are digital. Orders are received from a variety of virtual channels including a distributor’s online store and mobile apps, as well as customer e-procurement platforms and online marketplaces. Data transparency is nearly ubiquitous. Suppliers, distributors and customers succeed on what they do with data, not by hoarding it. Distributors no longer shield their customer data as a means of preventing disintermediation and disruption. Artificial intelligence and data-driven services enhance customer experiences and redefine collaborations with suppliers. Breakthrough results are achieved by sharing data up and down the value chain and by aggregating data across the market.

As this future unfolds, customer-facing positions are transformed to focus on activities that create value for customers through methods that simultaneously strengthen a distributor’s brand and relationships. Marketing programs intended to spur orders as a direct response disappear. Instead, marketing teams manage virtual and real-world customer communications to put forth the distributor’s abilities and differentiation, and to listen for the customer’s needs and feedback. Salespeople are not judged by their ability to stimulate orders, but by their ability to work with customers to identify opportunities and solve problems in a manner consistent and integrated with marketing communications.

Digging deeper, distributor marketing teams identify service opportunities to match customer performance requirements, much as manufacturer marketing organizations identify opportunities and define required product features and benefits. Sales management shifts away from pushing for immediate sales results and takes on a marketing flavor as managers coach salespeople to deliver carefully crafted customer experiences. All of this is accomplished under a strategic vision for a distributor’s brand and requires state-of-the-art expertise around business relationships, loyalty and brand equity.

Today, many distributors are seeking to improve their tactical marketing capacities around product content, social media, digital campaigns and more. These skills are essential, and distributors are playing catch up. But more is needed. Distributors need strategic marketing capabilities that can launch brands, manage customer journeys, redefine partnerships with suppliers and take the lead for generating meaningful and measurable financial and operational results.

In addition to the evolution of sales and marketing roles, there are at least three requirements for the digital age that point to the need for distributors to develop strategic marketing capabilities:

1.      Marketing expertise must shape a distributor’s vision around acting on data.

To be sure, analytics, artificial intelligence and machine learning will drive operational efficiencies for distributors. However, in connected markets, differentiation is achieved by leveraging data for the customer’s benefit. Marketing expertise is essential for understanding how customers make decisions in the digital age and their willingness to pay for data-enabled services. Data-enabled services power brands and relationships. This is a state-of-the-art marketing concept applied in a distribution-centric business model.

2.      Social media must enable real-time, all-the-time customer engagement.

Years ago, I helped a distributor design and facilitate a customer innovation workshop focused on identifying customer issues and developing solutions. Customers were invited to make presentations on their opportunities and challenges, and to explain how their markets work. Key suppliers were asked to look for collaborative solutions that delivered more value than those distributors could provide on their own. The distributor-staffed roundtable discussions were with people from all functions and roles from leadership to individual contributors. The workshop was conducted as a two-day event and repeated three times in a year. It generated real and consequential results.

As distributors evolve to survive and thrive in the digital age, most replicate the process and outcomes of a customer innovation workshop through the strategic use of social media campaigns. Telling customer stories through a distributor’s social media helps distributors learn about customer issues and solutions, and build relationships. Assigning the right hashtags and planned sharing of content builds trackable digital reach and presence, and reinforces a distributor’s reputation and brand. Social listening closes the loop by collecting actionable insights.

3.      Distributor differentiation strategies and value propositions will multiply exponentially.

Our new Facing the Force of Change® Creating Innovations and Shaping the Future of Business: A Look at Commerce, Technology and Human Forces in Distribution challenge paper catalogs more than 40 forces organized by commerce, technology and human trends. We go further and list 25 out-of-the-box ideas for kick-starting innovations. I hope you will read it!

Our research is continuing as we write the next Facing the Forces of Change report, but one critical finding is crystal clear — distributors will not achieve success in the digital age by moving in lockstep with other distributors to implement best practices. Said another way, distributors will not achieve success by being the same. Their success will come by being different. The 40 forces and 25 innovation ideas can be deployed in countless combinations by distributors and rolled out to define a distributor’s brand, customer experiences, supplier partnerships and more. Take a look for yourself.

And, as for the other dynamics described above, distribution-centric strategic marketing capability is fast-becoming an essential capability.

Getting to the Future

Much work lies ahead in defining a strategic marketing capability for distributors. In part, the best principles and practices of other industries can be explored and applied. But leaders should shoot for what is ahead, not replicate what worked in the past, even if it is a new practice for distributors. Strategic marketing is about real-world, social and digital methods, and distributors can get on the right path by focusing on what is new. The strategic possibilities of digital marketing and social media are the most consequential places to start. As Mark Hewitt, co-founder of Socially Savvy, explains, “Social media enables organizations to engage their customers with an increased reach and frequency. Delivering thought leadership around service and solutions builds the customer’s brand experience, and effective employee communications help overcome barriers for creating a new business culture.”

I need your help. This post reflects my conversations with several distributor leaders, but I need to push the thinking further with inputs from more distribution leaders, as well as from other experts and thought leaders who can help point the way toward distributor marketing excellence in the digital age. Please share your thinking on this with me at mark.dancer@network4channelinnovation.com.

And, if you’d like to receive updates related to the next Facing the Forces of Change® study, complete and submit this form and we’ll keep you in the loop.

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

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