We are in the wake-up call of wake-up calls today. It’s never been harder to separate the urgent from the important to move an organization forward. Every distribution leader is looking for ways to get the team to focus, survive, lower risk, engage customers, drive revenue and reconfigure to align resources with whatever the next normal will look like tomorrow, next week, next month. It’s exhausting but truly important work in completely new virtual/hybrid work environments.
In my third podcast conversation with J Schneider, Dorn Group’s Vice President of Strategy, we dive deeper into how distributors can recalibrate how they escape urgent day-to-day conversations with suppliers right now to elevate them to more strategic ways to build value and engage more deeply with customers. A key shift is in how up to now you have defined value for your customer, versus what that looks like going forward.
Customers themselves are scrambling to become more customer-centric and adjust their operations on the fly in ways they never have before. Are you doing the same? “Whether it's the delivery and buying infrastructure that distributors have,” Schneider says, “they have an opportunity to modify their business model to really align with what that end customer is doing. Distributors are in the perfect place right now to be better aligned to that end user to provide value. We see it as a partnership and it's really a way to separate your distribution business from others.”
While some distributors (and digital sellers) might just resell product from manufacturers without really adding any significant value or innovation, Schneider makes the case that – for most distributors – there's an opportunity to innovate around either filling those gaps or becoming a partner in working with manufacturers. ‘That's something that's often overlooked from the distribution point of view,” Schneider observes in our conversation.
That has to trigger thoughts around how Amazon Business is faring in this current environment. Yes, they offer a competitive transactional value proposition, but as multiple business cycles have demonstrated, great growth opportunities evolve that require unique value propositions to help customers far beyond the transactional level. This is the time to rethink and strengthen how to differentiate against competitors without the unique knowledge and relationship your team has built for decades. Now is the time. During market transitions, strong competitors find ways to outperform those who stay focused on the urgent versus longer-term important investments to protect core customers. It happens every cycle.
Current conditions offer an opportunity to address customers’ needs for knowledge and new ways to create more efficient supply chains. I asked J about how distributors will react to where customer are struggling today. “Well, it's going to happen one of two ways,” he said. “They're going to see it because they're going to understand that value or you're going to help explain it to customers on a regular basis about the things you're doing to make their business successful in these quarterly or weekly or monthly or yearly meetings that you have with them.
“‘Oh, by the way, Mr. client, we deliver a variety of products to you, but let me tell you about some of the things as a distributor that we're doing to help you run your business. Let me go over those with you. You had five or six critical needs as a business and here's how we delivered it. Here's how we actually changed our business for the future to serve you.’ So you can be in a better position to win yourself.”
J has a broad experience with manufacturers and distributors in his career that I think provides a great perspective to think through how to recalibrate for 2020 and beyond. Value is being redefined in real-time by customers at a very fast-moving pace. I hope J’s thoughts can help to recast how to adjust and keep as close to customers as possible.