The 2020 Mid-Year Economic Update_long

Best Practices in Selling Services

Recently, the Wall Street Journal ran a best practices article with lessons distributors can apply to their own services businesses: "Beyond Products: More manufacturers are branching out into the service business. Here's how to make the move successfully."

One of the key points made in the article: Many manufacturers who have moved into services have gone without a clear strategy. I'm sure some distributors will relate to the challenges outlined, including trying to sell services that were previously free (See Emerging Model: Fee-for-Service on how Cardinal Health and other drug distributors try ...

lindsay-articleonly

Recently, the Wall Street Journal ran a best practices article with lessons distributors can apply to their own services businesses: "Beyond Products: More manufacturers are branching out into the service business. Here’s how to make the move successfully."

One of the key points made in the article: Many manufacturers who have moved into services have gone without a clear strategy. I’m sure some distributors will relate to the challenges outlined, including trying to sell services that were previously free (See Emerging Model: Fee-for-Service on how Cardinal Health and other drug distributors try to meet this challenge.), internal resistance to selling services due to the difficulties in integrating service sales into incentive plans, the difference in selling services vs. selling products, and the challenge of knowing your customers well enough to meet a real need they have in the services arena.

As Adam Fein said in MDM back in February 2007, many distributors have created new profit models through fee-based services – and this trend will continue, but it doesn’t come without its challenges. To succeed, distributors must master the services business – which is different from product distribution.

Some best practices from "successful companies" featured in the WSJarticle:

Keep services separate from the rest of the operation. Separate units can focus on developing and delivering the services offering much more than set units that may be considering service offerings as an afterthought.

Start with generic service packages that can be customized if desired for a customer..

Look beyond just finding ways to save your customers money. This is a popular strategy, but the article points out that services that can also help your customers provide benefits to their customers (and therefore help them make more money).

In our archives, MDM features a case study on C.J. Smith Machinery and how the distributor of metal-cutting and metal-forming tools has profit from training its customers. Read the article here: Fee-Based Safety Audits.

Learn more about MDM Premium.

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.