3 Distribution Trends to Take Advantage of in 2021
Customer expectations have been changing for years, and the COVID-19 pandemic simply magnified and accelerated them in 2020. Being on the defensive is only a strategy if you want to lose slower. For distributors who are willing to play offense, there are three major trends to watch and take advantage of in 2021
B2B customer expectations have changed online.
Customers are no longer happy to only have a basic online buying process; they expect their experience to be as good as the experience in their everyday B2C life. As a distributor, you are judged by the standards of Amazon or Uber, not the mom-and-pop competitor across town that still hand writes all their orders. Customers demand control, dynamic shopping experiences and access to what they see on their own landing page.
With so many channels available, they will no longer put up with your archaic ordering system and will actively punish you for having it by buying less or buying elsewhere. Customers are often not broadcasting those purchasing shifts, and unless you are constantly monitoring, you may not notice the change for months.
Is your ecommerce giving you an advantage or holding you back? Do you have any data to support your opinion?
Technology natives influence buying decisions – and they don’t want to talk to you.
Millennial and Gen Z are the first generations to grow up completely immersed in technology. Technology is natural to them and their daily lives. Unlike previous generations, they have no need to adapt technology to their life, it is a part of everything they do. Because of the expectations of technology, the selling role has shifted so far that it has become an entirely new discipline.
In fact, your customers do not want to speak to you. No matter how much your sales team wants you to believe differently, it is true in the vast majority of cases. In national interviews across a broad range of industries, the same theme is expressed: “I don’t want to talk to a salesperson unless I have a problem. I can check my own prices and if all you are going to tell me is what I can already find on your portal, what use are you to me?”
The new expectation is to stay out of the way until you are needed. However, once you are needed it better be fast. In fact, they expect you to have anticipated it.
Are you still “selling” your customers or are you anticipating their problems?
Uncertainty has grown.
There is not a consultant or industry expert worth their salt that is not talking about uncertainty. Things we knew with 100% confidence six months ago are now flipped on their head. Your customers are worn out and scared even if they will not admit it to themselves. Yet, with uncertainty comes opportunity. Every critical event is another opportunity for you to become “stickier” and more important to your customers. For successful distributors, the two biggest levers are credit and returns.
- Credit: Pick the companies that align best with your value proposition and extend extra terms or forgiveness periods. Break your rules, but give them piece of mind that you will not be their enemy when uncertainty comes to their business.
- Returns: Get flexible. Projects dry up quicker than ever and a “guaranteed project” means nothing. As with flexible credit terms, pick your winners and be ready to do things much more leniently with returns to keep them happy and relaxed.
Are you the “trusted partner” for your customers?
Learn how Indian River Consulting Group's strategic advisory, sales compensation and speaking services can help you respond to and leverage disruptive forces in the coming year.
About the Author
Mike Marks
Mike Marks co-founded IRCG in April 1987. He began his consulting practice after working in distribution management for more than 20 years. Over the years, his narrow focus in B2B channel-driven markets has created an extensive number of deep executive relationships within virtually every business vertical in construction, industrial, OEM, agricultural, and healthcare.
Mike has led project teams that improve market access by aligning resources to growth opportunities serving manufacturers, dealers, and distributors. Clients have ranged from small privately owned firms to many of the industry’s market share leaders. Ownership structures have included owner-operators, private equity, ESOPs, and publically traded firms. Mike is proud of the teams work and the confidence clients have shown with additional project work.
He has written extensively, and is frequently quoted on many industry issues. He has substantial board experience on both public and private distribution firms. His contributions to the field include serving multiple terms as a Research Fellow with the National Association of Wholesaler-Distributors, permanent faculty at Purdue University’s University of Industrial Distribution, eight years as Graduate Adjunct Faculty in the Industrial Distribution Program at Texas A & M University, and rendering several precedent-setting expert opinions in contract disputes between manufacturers and distributors.
Prior to forming IRCG, Mike held the position of Executive Vice President at Lex Electronics, an $800 million vertically integrated electronics distributor in Stamford, CT. Mike’s path to management in his early career was through increasing responsibilities in sales and sales management. He also completed a tour of duty as a manufacturer’s representative.
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Dan Horan
Dan Horan is an associate consultant at IRCG. Joining in 2016, Dan brings his expertise in sales, marketing, branding and communications strategy to the IRCG team.
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