When It Comes to Digital, Don’t Be the Monkey Holding On to the Mango
Have you heard the story about how to catch a monkey? Tie a jar with a mango inside to a tree. When the monkey tries to get the mango, his hand gets caught.
Don’t be the monkey holding on to the mango.
Many distributors are dragging their histories around, not investing enough or at all in the digital tools that will keep their businesses from fading in a rapidly changing market marked by consolidation, changing customer expectations and increased price transparency.
Being a digital distributor is about getting rid of analog processes and using digital tools to serve your customers more efficiently. I spoke about this recently at the Industrial Supply Association’s annual convention in Denver.
- What percentage of your business is susceptible to online-only competition such as Amazon?
- What percentage of your business is susceptible because you aren’t adding service or other value to the transaction?
Given today’s growing margin pressures, distributors can’t afford this revenue leakage.
Becoming a digital distributor is about lowering your expenses faster than your price as part of a sustainable long-term growth strategy. Develop a multichannel strategy based around how your customers want to buy and align your resources accordingly.
How can digital tools support your multichannel strategy and drive a better customer experience? Don’t think of digital as a way to replace people; use it instead to enhance relationships. Most independent distributors don’t need an intergalactic ERP system or an e-commerce platform as extensive as Amazon’s.
Instead consider tools that improve the customer experience without breaking the bank. For example, rather than investing in a full-fledged e-commerce solution, one distributor built a mobile app for its contractor customers, featuring the last 100 products they purchased. That made it very easy for them to reorder, and increased their stickiness. Or look at tools that can improve your back-end efficiencies and in turn better meet your customers’ service expectations.
Be intentional about your investments in digital. Prioritize your customers’ needs, align your resources accordingly, and identify which investments to make and when.