The 2020 Mid-Year Economic Update_long

4 Reasons to Adopt a Data-Driven Mindset

Increased competition from both traditional and non-traditional distributors coupled with technological advancements have put the power of analytics into distributors hands. Use your metrics to your advantage to measure company performance, make better decisions, understand customer activity and give customers exactly what they want.
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There was a time in distribution when salespeople hit the road (or the telephones) in search of new business, the orders came in, those orders were fulfilled, and repeat business was almost guaranteed. Sales figures were usually met or exceeded (depending on economic and industry conditions), and companies grew year-over-year. 

This is all oversimplified, of course, but you get the picture: tracking every move and making decisions based on metrics and analytics wasn’t how most wholesale distributors ran their businesses. 

Fast-forward to 2020 and increased competition from both traditional and non-traditional distributors coupled with technological advancements have put the power of analytics into distributors’ hands. Whether it’s a small, regional company that wants to dissect its customer database or a distributor that wants to start using new KPIs in its warehouses, the data is now at their fingertips. 

Also see: “5 Ways You Can Use AI to Win the 2020s.”

How to Leverage Metrics to Your Advantage

Here are four reasons all distributors should start leveraging metrics (numbers you’re tracking), data (numbers gathered for a specific metric), and analytics (using metrics to guide good decision-making) to their advantage in 2020: 

  1. Measure company performance. This is where that old “you can’t improve what you don’t measure” adage comes into play. If you don’t know where your company is right now — and where it wants to be in the future — then it won’t hit its goals. Some relevant metrics for distributors are productivity (overall capabilities, how well the company uses its resources, etc.), gross profit margin, customer satisfaction and employee satisfaction. 
  2. Better decision-making. The days when your sales team had to wait until the end of the month to see how they performed are long gone. Today, distributors are using real-time data to make good decisions on the fly. For example, accounting departments can use data to make revenue predictions and develop accurate forecasts; sales can use customer relationship management (CRM) data to track leads, send follow ups and close more deals; and human resource managers can leverage data to manage recruiting and track overtime/sick leave patterns among employees (and come up with proactive ways to manage these ebbs and flows). 
  3. Understand customers and buying trends. “Identifying market trends and understanding customers’ needs is a key driving factor of most sales and marketing activity,” Bernard Marr writes in Forbes. “After all, the more you understand your customers, the better you can serve them.” An activity that was once based on what customers previously bought which products or services, it’s increasingly becoming more predictive – anticipating what customers will want in the future. “One classic example of this is Netflix recommending what you should binge-watch next, based on your viewing preferences,” Marr points out. Distributors can use the same approach to upsell, cross-sell and make repeat sales to customers across all of their product and service categories. 
  4. Give customers what they want, every time. “Distributors that don’t invest in customer-facing technology will lose ground to the competition over the next decade,” NAW predicts, pointing out that while distributors don’t need to reinvent sales to stay competitive, they do need to do a better job of adopting technologies that customers value. Using artificial intelligence (AI), for example, distributors can better personalize the customer experience by analyzing customer data and predicting future behaviors, “thereby enabling distributors to revolutionize the selling process and customer experience,” NAW adds. “Empowered by [AI], distributors will be able to offer customers the exact items and services they most want, at exactly the right times.”
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