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The No. 1 Reason Distributors Fail to Make the Digital Transition

Written by Mike Marks on Tuesday, 06 June 2017. Posted in Distribution

At the Industrial Supply Association’s annual convention this year, I spoke about the transition distributors must make to digital. This goes beyond just selling products online. It’s about using digital tools across your organization to serve customers more efficiently and profitably.

But while most distributors recognize the importance of this transition, many will struggle to make it.

The No. 1 reason distributors fail to make this digital transition is their field sales teams.

After all, the ongoing shift to digital from the buyer’s perspective has had a major impact on the role of outside salespeople and a distributor’s overall go-to-market approach. As we’ve outlined on this blog, a multichannel strategy based on how your customers want to buy is required in today’s market. Roles field salespeople have played in the past will shift to other team members. For example:

  • Expanding share of a customer’s wallet by using more team members on an account that warrants it, introducing specialists.
  • Targeting inactive or new small customers with an e-catalog, which allows for a lower cost to serve.
  • Introducing inside sales to long-standing accounts to support the day-to-day quoting and reorders to free up field sales to uncover new opportunities.

Distributors are afraid to make the move to digital because they are afraid their best sales reps (and best customers) will walk away. It is a risk, and definitely a cultural disruption. But it’s also a necessary one. You will probably have to let some of your most loyal and long-tenured employees go if they’re unwilling to make the transition.

Read more about what the Sales Rep of the Future looks like in our recent whitepaper.

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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