Notes Around Top Performing Distributors
I recently sat in on a webinar hosted by an industry business strategy giant. They were talking about top performing/outperforming distribution and sharing some insights around their study of them.
I had my pen out and jotted some notes and will share them here as rough as they may be.
They see manufacturers continuing to build digital capabilities which gives them a greater share of direct to customer sales, bypassing channel partners. The vast majority have made recent investments to ecommerce, and many cite the ability to reach customers directly and creating an improved customer experience as the main drivers.
They revisited rankings created from customer interviews to review and rank customer expectations from distributors. Some insights are as follows:
• Product availability and customer service remain top criteria for customers.
• There was a significant increase in the importance of value-added services.
• An extensive range of products while still important had fallen a number of spots.
• The ability to transact online had risen significantly displacing the importance of a sales rep relationship.
• Technical knowledge, same day delivery, payment terms and real time tracking are all on the lower end of the spectrum.
In general, digital players (i.e., Amazon Business) and big box retailers (Costco, Home Depot) continue to step up their activity in the B2B space.
Key learnings from outperforming distribution:
• Size is important. The right scale gives leverage that can boost performance.
• Growth is extremely important.
• Growth cannot come at the expense of profit. Margins must improve.
• Customers are at the centre of everything they do. Whether winning or keeping customers, there is a recognition that customers have more options than ever. Distributors must go beyond products and offer value added services and have a demonstrable corporate focus on all aspects of sustainability.
• Digital is not optional. Customers want an omni-channel experience – the ability to buy in whatever fashion they want.
Perhaps this might all seem intuitive and logical, but the execution of these themes is anything but simple.
Business plans and strategies for 2023 should be in the act of finalization right now, which of these concepts are going to be incorporated in your plans?