In the News: To Successfully Leverage Data Think People, Not Technology

Written by Mike Marks on Monday, 25 June 2018. Posted in Business Strategy, Distribution

Getting closer to customers is a recipe for success for distributors in 2018. Analytics should be a key component of this effort; customer data, analyzed with an open mind, should drive decisions on how you allocate company resources, decide which innovative projects to pursue, etc.

The cost of analytics has come way down, and more distributors are acknowledging the importance of investing in those capabilities. Unfortunately, many have failed to leverage analytics technology in a way that solves customer problems or reduces friction in the buying process.

It isn't the cost, or the failure to choose the "right" technology. Even the most basic tools, such as Excel, can yield useful insights. So what's causing the disconnect between distributors and the actionable insights they need to make intelligent business decisions?


Let's address the challenges to leveraging analytics one by one.

The characteristics that make IT or finance people good at their jobs aren't necessarily the characteristics that make good data analysts, but many distributor analytics initiatives are led by these departments. It is vital that business executives temper and test the business knowledge they've acquired over the years with the help of someone who understands Boolean logic and can ask the right questions. The absence of a dedicated data scientist can keep distributors from drawing useful insights from their data.

Distribution company leaders themselves can be an obstacle. Even distributors that have managed to draw useful insights from their data are often dogged in their adherence to intuition and stories, and tend to discount valid data as flawed based on anecdotal evidence. For data-driven ideas to be realized in company operations, those with the power to act on those insights must first choose to do so.

That brings us to the challenge distributors encounter when they do decide to act on their findings: a lack of sales team buy-in. Due to changing buyer behaviors, distributors often discover through analytics that they need to manage their sales teams differently and/or allocate fewer resources to outside sales. Fearing they'll lose their best sales reps, distributors are afraid to rock the boat. This creates a gap between the actionable insights that analytics can provide and the execution of data-driven plans.

Despite these challenges, plenty of distributors out there (even smaller independents) are using analytics to do incredible things. I spoke to Modern Distribution Management's Tom Gale about some of the innovative projects going on this year in Episode 2 of MDM's new podcast: 

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.