- Top Distributors Lists
- Market Research
- Free Reports
potential. Gunderson then used quartile analysis – which ranks customers by size and views them in terms of the groups that each make up 25 percent of a company’s sales – to question this assumption.
Gunderson has spent about 10 years conducting quartile analyses for a variety of distributors, tracking the performance of customers in each quartile over time. What he’s found is that while most of a distributor’s sales comes from a select group of large customers, the top quartile doesn’t typically grow as quickly as the other quartiles. That may be because distributors already have most of their business, or because their sales reps have already used up every sales trick in the book on that customer. Regardless, Gunderson said, “Usually you don’t get your growth at the top.”
That’s good news for distributors willing to move away from the traditional “top customers first” sales paradigm. Doing so will allow them to shift sales resources to higher-potential accounts, fueling sales growth. “Understanding how to quartile-analyze customers and identifying what should be digitally assigned has been a big breakthrough for a lot of distributors that are making above-market gains,” he said.
3. Customers are like snowflakes
Jonathan Bein, managing partner at Real Results Marketing, spent part of his presentation showing distribution leaders how different customer groups can be and why that matters.
Bein, who holds a Ph.D. in computer science, surveyed customer groups for two of his clients to determine the level of need for an investment in ecommerce. In the first example, surveyed customers had a clear preference for purchasing over the phone, in person and in store. The survey for the second group, in contrast, showed that customers had a clear preference for online and email-based purchasing.
It could be that the difference between the two groups was due to their differing demographics or other innate characteristics. Or, Bein said, the distributor whose customers preferred to buy in person may have a sales team that provides better real value during customer interactions. Whatever the reason for the difference, the takeaway is clear: Don’t rely on second-hand data or simply copy the sales strategies of other companies. Conduct your own analysis and let data guide your approach.
4. Proceed with caution
Fundamentally, most distributors need to move from a self-directed sales force to a digitally-enabled, management-directed sales force, Marks said. But this shift will look different from company to company.
“There are a lot of different ways you can do this,” Marks said. “If you listen to everything you hear from these experts and examples and you go out and do all of it, you may critically damage your company,” Marks said.
Instead of taking external advice at face value, he said, “be very careful and think critically about what parts of this apply to your business.” Distributors must take their time to get this right, Marks said. “It’s a transition – it’s not black and white.”
Lindsay Konzak is president of 3 Aspens Media and the former editor of MDM. Reach her at email@example.com.
Join MDM this fall for its next executive summit to learn more about how data can drive competitive advantage. Learn more about the MDM Analytics Summit 2018 at mdmanalyticssummit.com.