Distributors: Get Out of Your Echo Chamber

Written by Mike Marks on Monday, 06 August 2018. Posted in Business Strategy, Distribution

Distributors tend to hold certain beliefs that are often based on gut feel rather than facts.

A lot of distributors have been operating in an echo chamber without realizing it. They talk to their salespeople, but they don't talk to their customers. They say, "We have excellent service and we think we're wonderful. And we're trying to get people to pay for our special service." But operational execution is an activity, not a strategy.

Distributors in an echo chamber don't measure anything, so they don't understand what's working and what isn't. They also focus a lot on the day-to-day minutia without seeing the big picture. So they don’t know what's really going on in their market. And they try to be all things to all people. Distributors like this are way past their "sell by" date and the only thing keeping them going is inertia.

Get out of your echo chamber if you want to know what’s really happening.

Spend some time and money to better understand the external environment in which you operate. Start with your trade association or a buying group. They often have resources you can use to better understand trends, opportunities and challenges that affect your industry. It’s also a great place to network with peers, who may have their own perspective on markets.

To learn more about what the competition in your market is doing, talk to your customers, conduct online research and set up Google alerts. Follow trade publications – those serving distributors, as well as those that your customers read. Share detailed competitor innovation activity reports at internal meetings.

And, finally, talk with your customers. Learn about their new initiatives, as well as why and how you might fit in with those plans. Talk to customers about their biggest challenges and opportunities to ensure that your vision and investments are aligned.

Discuss the findings of all of this research with an outside facilitator – such as an outside board member, professor or consultant – to help you interpret them with a fresh perspective.

About the Author

Mike Marks

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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