It’s easy to say distributors are more than middle men in the sales process. They are there to provide product when customers want it, where customers want it and how customers want it, right? But what is the real value distributors provide?
Last week, MDM, in partnership with Grant Thornton, hosted a Webcast examining the threat of disintermediation (or the act of cutting distributors out of the sales process). In that event, the question was raised: Has technology changed what we have traditionally thought value to mean?
It’s a difficult question to answer, because everyone has their own idea of “value.” And it has to begin with answering: How have we traditionally defined value?
Different distributors offer different value. And the needs of the customer have certainly shifted in some ways over the last two decades, in particular. Before 1995, there was almost no “one-click” ordering via the computer; now it’s becoming an expectation.
That expectation is based on the same demand that has existed: a easy buying process that delivers the needed goods. The process has been accelerated and changed; the value offered by distributors is still the same.
Technology has also increased the importance of demonstrating the value distributors provide. Thanks to the Internet, there is more visibility in the supply chain. Your customers can more readily look at your competitors and compare the value they say they provide with what you say you offer.
You have to clearly define – for yourself and your partners – the value you provide and how that differentiates you from the competition. Once again, the value itself hasn’t changed, the expectations for visibility around that value has.
Technology may have been a differentiator 20 years ago, and in some ways it may still be – just not in the way you might initially think. Having a comprehensive technology presence – such as a functional e-commerce platform or a mobile sales force that can connect to current ERP system information – is quickly becoming a cost of doing business. If you don’t have it, you won’t have that basic distributor value of making the buying process easy.
The same applies to many of the other value identified by distributors. The value provided hasn’t really changed; the process for providing that value is what has changed.
Access the MDM Webcast, Fighting Disintermediation: How Distributors Develop, Deliver and Measure Value, at www.mdm.com/disintermediation.