Some distributors think that when they buy a company that the integration will go smoothly without their having to invest time getting to know current employees. Unfortunately, it’s more complicated than that.
Buying a company can be an emotional experience. The closer many distributors get to completing a deal, the more they tend to fall in love with it. The reality is that M&A transactions should be based on financial return, not passion, but that’s the No. 1 mistake I’ve seen distributors make when buying another company.
Watch the video below to learn the two things you can do help keep emotion out of the equation when buying a distribution company. This video was created to address common questions we’ve received since announcing the opening of registration for the Distribution M&A Executive Workshop we’re hosting in partnership with Modern Distribution Management.
Did you enjoy listening to Mike speak about how to avoid common problems in M&A? Join us for IRCG’s and MDM’s M&A Executive Workshop. Sign up today.
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.
I’ve worked with dozens and dozens of distributors and manufacturers over the past couple of decades, and in that time, I’ve heard more times than I can count that the field sales team is imperative to building customer relationships and gaining mindshare, justifying the massive expense.
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.
At IRCG’s recent executive workshop, Sales GPS, we spoke with wholesale distribution executives about the need to rethink their distribution sales models to adapt to new market realities. We spoke about changes in how customers are shopping and buying; the growing need for a team-selling approach to meet customers’ needs more efficiently; where e-commerce fits in today’s world; and how to evaluate your sales process to identify gaps in how you’re serving your customers.
Only 1 in 5 e-commerce executives across industries rate their organizations as having a “world-class” data-driven culture, according to Clearhead’s 2016 Digital Optimization Benchmarking Study. While the study of 144 e-commerce executives found that most have analytics technology in place, staffing shortages, skills gaps and cultural barriers have meant that for many companies, “the technology that can improve customer experience, such as analytics, testing and personalization, sits on the shelf.”
Sales roles today are becoming less transactional as more customers move ordering activity online. In a recent survey we conducted with MDM, distributors have predicted that as this trend continues, sales reps will have a harder time getting in front of customers (see Amazon Effect Takes Aim at Relationship Equity). A million U.S. field sales positions may even disappear because of growing e-commerce, if Forrester’s 2015 prediction is to be believed.
A lot of distributors are worried about Amazon’s growing influence in B2B markets. Despite Amazon’s replacement of AmazonSupply with the somewhat less-threatening Amazon Business in 2015, the increased competition in B2B markets created by Amazon Business still outweighs the new selling opportunities it has created.
On a daily basis, you can get news on mergers and acquisitions and the quarterly reports of publicly traded companies. And it seems like every week a new report comes out outlining new industry trends.
The field sales function has been largely self-directed, with salespeople typically making their own decisions about how and where they go to market. Distributors must shift to a management-directed sales model.
Historically, the distribution sales process has been largely artisan – with field salespeople making their own decisions about how they go to market with little oversight from sales management. Here are three reasons why that has to change.