If you listened to the recent MDM Webcast panel discussion, The Future of Distribution (click to access a recording of the program), you heard MDM President Ian Heller talk about Amazon's current capabilities, some of which he says many distributors aren't even aware of.
We all know about Amazon's free two-day shipping, robust customer reviews system and delivery tracking/confirmation capabilities, for example. But Amazon Business is also offering things like a "LiveExpert" button that connects customers with manufacturer agents; financial capabilities including 55-day open accounts with 0 percent interest; punchout support for 54 systems; and plenty of other features that most independent distributors can only dream of.
Amazon's success has led many distributors to believe that staying relevant is all about the technology. While it's true that a modern e-commerce system is fast becoming a requirement to do business, what many distributors are forgetting is that the only reason Amazon is successful is that the company's technology makes it easier for their customers to buy the way they want to buy. And the way Amazon's customers want to buy isn't necessarily the way your own customers want to buy.
During the discussion, I asked panelist Paul Victor from Infor what percentage of the software provider’s current customers have a good understanding of all the product features they have access to. He replied: "a very low percentage." That's because even the distributors that are smart enough to recognize technology's important role often fail to recognize that the most intergalactic piece of software doesn't mean much unless it is implemented in such a way that it solves a customer problem or makes it possible for them to buy how they want to buy.
To get the most out of new technology, Victor said, distributors need to tell their technology providers what they're trying to accomplish so they can match them with the right tools and features. I agree, and I would add that you must first figure out what your customers truly want and need.
Consultants and technology providers can give you examples of what other successful companies have done and how they've done it, and you can use Google Alerts and read the news to keep track of what innovators like Amazon are doing. But you are in the best position to understand your customers' challenges, perhaps even better than your customers do. After all, if Henry Ford had asked people about their transportation challenges, they would have told him they needed a faster horse, not an automobile.
If you only copy and compare yourself to other companies, you'll become obsessed with getting new tech capabilities without understanding why you need them or how to best implement them. You'll always be behind the curve, and you'll never be able to offer your customers anything unique or innovative. If you've been feeling overwhelmed by the capabilities of your competitors, this should be welcome news.
Because when it comes down to it, it doesn't ultimately matter what your competitors are doing or what new technologies consultants like myself are talking about. It only matters what your customers need and want – so start there.
Mike Marks is managing partner of Indian River Consulting Group and specializes in helping distributors and manufacturers accurately diagnose problems and identify risk-bound alternatives, so they can take their next steps confidently. Call IRCG at 321-956-8617 or visit ircg.com.
Join Mike Marks and other industry experts June 26-28 in Denver, CO, for Sales GPS, MDM's 1-½ day, hands-on conference designed exclusively for wholesale distribution executives motivated to change their single-channel models into more adaptive and customer-responsive multichannel models.
