Value definition often gets pushed back as the urgent crowds out the important. I think that’s been true for distributors where historically the product and service portfolio carried the load, and carried it well! But, of course, times have changed — significantly in terms of how digital and demographics have reshaped every point of the supply chain in the last few years.
As we usher in the next year and decade, it’s timely to take a hard look at your own definition of value and whether it’s kept up with the changes in your customer segments, suppliers and internal capabilities. This current edition of MDM Premium provides multiple views on value proposition across the three main reports we include.
As Jonathan Bein nicely outlines in Creating Value with a Clear Value Proposition, defining value goes far beyond selling the right products and services. “This is not just about a cool mission statement for a website,” he argues. The article provides a great chart for first getting internal alignment and communication around value in place before trying to deploy your value proposition as a competitive advantage. As Bein puts it, “without that organizational alignment, a value proposition lacks strategic value. And without external communication across every customer-facing touchpoint, the distributor will remain undifferentiated in the customer’s mind. That is a matter of life and death in today’s market.”
That’s a strong statement, but dead-on in terms of how critical it is to communicate a clear differentiation message in increasingly noisy markets. Bein lays out a nice blueprint for creating a strategy around a clear and compelling value proposition.
One of the areas where distributors are upgrading a value proposition is in inventory management. Our report, Beyond the Basics of Inventory Management, outlines three ways that companies are shifting a traditionally internal operational function into a more customer-focused value proposition, leveraging a combination of technology and analytics.
Finally, our cover story highlights how Ferguson, the largest North American industrial/construction products distributor, has developed a compelling value position through its omnichannel and digital innovation initiatives with a laser focus on the customer experience. It’s an interesting journey for a company that grew through the combination of many distribution companies with strong traditional sales relationships.
Their vision is to keep building an ecosystem that focuses on their customers’ customer, as this quote by Ferguson CMO Mike Brooks illustrates: “We’re helping the contractor get a job — not a lead — so it’s very valuable to them. And from the consumer side, we’re helping the consumer with an overall solution. Not just selling the product, but selling the product installed when they want it with the contractor that can help.”
I’d argue that building a clear value proposition relevant to your customers today is both urgent and important for every size of distributor. I hope it helps you consider whether your current value definition is up to date.
As always, I welcome your comments. Please email me at firstname.lastname@example.org.
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