The Customer Relationship
I consult primarily with distributors with revenues of $10 million and below. This is a group that succeeds based on its ability to provide exceptional customer service along with its products. Technology has dramatically changed the way these services are delivered. The salesperson’s one-time habit of regular customer visits to catch up on personal and professional information has been replaced by online communications. With so much material available on the internet, salespeople find it difficult to add something technically significant to a sales discussion. Also, digital interactions broaden the time between sales calls, diminishing a rep’s ability to build strong personal relationships. These trends are of great concern to my distributor clients. They fear losing their long-term, hard-earned customer relationships to the digital world.
Take Action
To adapt to the changes in the customer experience, learn how to make these new interactions work for you. Find ways to build trust with your customers that will differentiate your distributorship from competitive virtual channels.
Look at the widespread adoption of technology as an exciting challenge. Take the following actions to ensure your company is making the appropriate changes to succeed in the digital world.
Build Online Confidence
We all recognize the need for an online presence in the form of a good website. You can’t stop there, however. You need to continually build online confidence by adding more tools.
Today, in addition to a website, any serious distribution business also must have business management software known as ERP (enterprise resource planning). Business consultants predict that if you don’t have an operational ERP in the next 12 to 18 months you will not remain relevant in today’s competitive digital world.
A functional ERP gives your sales force rapid access to important tools. It provides inventory accessibility, customer finance engagement, digital product information, and other distribution efficiencies. Your team may show initial resistance to ERP due to concerns about losing control of their accounts. That is generally quickly overcome by the realization that its application improves customer experiences.
Once an ERP is implemented, consider the addition of some third-party APIs (application programming interfaces) for ecommerce and improved product description, pricing, and inventory management. These strengthen your ability to provide a great customer experience.
Increase Your Product Knowledge
For the traditional distributor, there is no question that its ability to provide customers with differentiated product knowledge is its greatest asset. The availability of online research, however, allows customers to look for information on their own. As a result, salespeople are entering the buying cycle later than ever before.
We all recognize the need for an online presence in the form of a good website. You can’t stop there, however. You need to continually build online confidence by adding more tools.
Online research can be overwhelming. No one wants to waste time trying to get answers from automated attendants or overly dense web pages. Salespeople can use this problem to their advantage. They can do the research and provide personal access and product knowledge selected especially for their customers. Reps need to build upon what they already do and increase their focus on customer education and product information.
It is also important to eliminate products that are no longer being purchased. Remember the 80/20 rule, which states that 80% of revenue comes from 20% of products. Also, devote time to building stronger partnerships with key vendors that demonstrate superior products and digital technology prowess.
Be an Agent of Change
To be an agent of change, look outside your company for trade associations, buying groups, manufacturers and other communities for the latest technologies, continuous improvement tools, marketing techniques, APIs, VMI (Vendor Managed Inventory) practices, etc.
Within your industrial vertical there are technology companies that are specialists in what you need. This was true within the distribution industry where I worked. One ERP provider commands the market by providing regular forums for information exchange between themselves and their distributor clients. This ensures that their product enhancements and solutions work within that particular business space. It also reduces the cost of updates to the distributors as the provider has been able to spend less time on product development.
Get ready to Embrace AI
By now, most of us have connected with ChatGPT and understand its ability to write a discourse on any subject. It has scanned the internet and assembled a collective response from all the information available on the topic.
In a similar fashion, machine learning can be applied by distributors to provide enriched content. When implemented, AI can optimize supplier and customer pricing information, relationship content, product selection, promotional strategies, etc. AI can serve as a continuous improvement agent. It will be up to you to determine how best to implement AI in your business and to understand how to communicate these capabilities to your customers.
Be a Differentiator
The distribution business is built on strong relationships and the ability to find solutions that are best for its customers. The competitive internet verticals, on the other hand, are not looking for personal relationships. Be a differentiator by focusing on your customer’s best interest and staying on the cutting edge of technology. Here lie plenty of opportunities for distributors to provide a better customer experience than the internet verticals.
Grow Your Digital Skills
You have the customer’s trust, now build on it. Your customers won’t use the other verticals if you continue to deliver the best experience. You have the advantage of being more intimately aware of customer needs. Continue to do your homework.
Find the time to view webcasts from the best-in-the-business gurus. These webinars provide insights from top consultants as well as analytics. Distribution Strategy Group (DSG), Modern Distribution Management (MDM), and the National Association of Wholesalers (NAW) are three great groups to start with. They have daily blogs with industrial news including M&As, earnings, feature articles, events, and up-and-coming webcasts. Whether you are in the initial stages of your digital journey or are seeking to enhance existing strategies, you must stay current with the rapid changes in the digitalization of your channel.
Managing Change
Managing change is never easy. Navigating the digital customer experience in a rapidly changing world requires time, energy, and financial investment. It demands you have an ongoing focus on delivering the latest improvements in product, price, and promotion. The challenge is to provide all this in an easy-to-use digital format, while continuing to build and strengthen your personal customer relationships.
