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The Mask-to-Mask Distribution Environment is Changing Everything

The B2B distribution business has been adjusting to the new mask-to-mask business environment by changing how distributors handle inventory, deliver products and communicate with customers. The most difficult adjustment has been letting go of the old sales coverage plan.
Manager working online while sitting in a warehouse office

The most difficult COVID-19 disruption over the last several months has been to the B2B distribution sales process, and every day that goes by makes the sales changes more permanent.

Maybe you are already making adjustments to your sales process to become the premier mask-to-mask selling organization in your channel. But if you haven’t made adjustments, I suggest you look at the following areas:

Customer and Associate Training

If you are a traditional B2B distributor who had a culture of onsite training at your facility, annual open houses, and lunch-and-learns put on by your manufacturer partners, you may know that the value derived from all of these face-to-face interactions was already in decline.

Skipping these events this year has just confirmed to customers that such activities contribute very little value to the business relationship.

Lunch-and-Learns on the details of the latest 3/8’ liquid-tight fitting, the newest hand tool from a manufacturer, or how to test the ensile strength of a cable tie were not necessarily wasted time before the growth of YouTube and video training, but they are wasted time today.

Your customers feel it, your manufacturer partners feel it, and I am sure your leadership team feels it. It’s time to look at a better customer and associate training program. Your customers aren’t going to get excited about coming to your facility for an open house, annual golf event, or onsite training in the future.

Sales Coverage

It does not appear that we will be going back to the old days where your bag-carrying direct sales team will interact with your customers in the same way they did before. Here is a short list of changes that I predict will become permanent:

  • Manufacturer directs will continue to climb — shrinking the size of the available market for distributors. I can only imagine how many calls and emails 3M and other major safety providers received over the last few months directly from end customers who couldn’t get supply from distributors. Hypothetically, if I was the channel leader for distribution for a big manufacturer today, I would be questioning my reliance on distribution. It’s reasonable to assume that the risk-planning scenarios for manufacturers in the future have to involve the ability to go direct more often. These supply-side disruptions have also put doubt in the mind of end customers on the value of their distribution partners. I can see some end customers saying things like, “I got my supplies directly from the manufacturer before. Please tell me why I should pay the middle man again?”
  • Customer interaction and entertainment will not come back to pre-COVID-19 levels. The return on investment from your sales team’s ability to play golf or entertain customers in other ways has been declining for years. It’s been driven by a lot of factors (companies are less willing to allow it, children’s activities are increasingly time-consuming, etc.) that have reduced the amount of time customers have available. And frankly, spending time lining up a putt in order to build a personal relationship doesn’t help with the goal of developing win-win sales growth programs. With COVID-19, those customer entertainment activities have completely stopped. When restrictions end, your end customers will have less time than ever for entertainment activities. They are discovering during the shutdown that they can do business more efficiently digitally.
  • The mask-to-mask environment is eliminating the practice of, “I’ll just stop in and do my relationship selling.” The opportunity to use the mask-to-mask environment to reshape your sales coverage plan and approach should not be wasted. Your customers will have remote workers at home for a long time or permanently. Many customers will be banning the ‘swing by with donuts’ type of visit forever. For years, you have been paying handsomely for the “relationship” the account manager has with their end customer. You can’t afford to overpay for the relationship anymore, because of the following reasons:
    • Your sales team’s role introducing new products is becoming very limited. Does your sales team really play a critical role in introducing that 3/8” liquid-tight fitting when the customer can get the same information, in seconds, online?
    • The account manager relationship leverage is declining. I am sure you have been hearing from your sales team for years that they have customers who don’t value the relationship, and that it is all becoming about price. This is hyperbole, but it is becoming more about getting the right solution at a competitive price for your customers. The ‘buying at a higher price because we are friends’ customers are retiring, and every day more customers want results versus friendships.

A decade ago, I said it’s all about the relationships. Our sales plan was built around enhancing those personal relationships. Today, it’s about the solution. We don’t even have to know each other well. If you can provide my business cost savings and true value-add solutions, that is the relationship I am interested in.

The Sales Process Will Never Go Back

At MDM, we are committed to helping you change your sales coverage plan. In our Sales Transformation Network, we talk about the right mix of inside and outside teams, how to cover your smaller house accounts more effectively, and much more. For much more on this topic, check out our upcoming virtual conference, Sales GPS 2020, taking place online August 31-September 2.

Your distribution or manufacturing business is unique. One of the best ways to build a better sales mousetrap is to learn what others are doing and craft the right plan as a result of that education.

I predict we aren’t going back to the previous face-to-face relationship model. The new mask-to-mask selling world is here to stay. That is why I would like to announce that I have a very nice set of golf clubs sitting in my garage that once were an excellent sales tool. They have some serious dust on them, but they are free to a good home.

Gunderson is vice president of analytics and e-business at MDM. He has held senior distribution leadership roles in analytics, marketing, e-business, category management, pricing and sales over a 20-year career across multiple distribution product sectors. Please feel free to reach him at john@mdm.com.

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1 thought on “The Mask-to-Mask Distribution Environment is Changing Everything”

  1. John,
    I really enjoyed your article on “Mask to Mask Distribution”. Our world is definitely changing and many distributors refuse to accept that fact. We are living more and more in a commodity world where price drives decisions and everything else is meaningless. It’s unfortunate but true. The smart distributors will find ways to add value and differentiate themselves from the rest. I’ve been in distribution for 40 years and for 40 years the distributors have been squeezed by both customers and suppliers. The suppliers constantly put more costs on the distributors (fewer stock rotations, less co-op money, less prepaid shipments, fewer factory support personnel, & selling to anybody who wants to buy their products) and the customers put more pressure on the distributors to offer more services but are only willing to pay for the product, not the service. And, the great relationships that once gave you the ability to make a decent margin now only gets you potential “last look” so you can match some other distributors low price. But in the end, distribution still provides a valuable service to both suppliers and customers and will continue to do so, albeit differently than in the past. The smart distributors will ultimately figure it out and those that don’t will go fishing.
    FJS

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