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Ten Issues to Keep You up at Night

by David Gordon and Stan Rydzynski

Stan Rydzynski David Gordon

As we begin a new year, here are some observations from conversations we've had with manufacturers and distributors recently. These are the things that keep them up at night. We think they're worthy of discussion in 2015.

Rather than count sheep, think about . . .

• eCommerce. What should you do? What do my customers want? How much should you invest? How to gain adoption? What content to put on my site? Why will someone go to my site rather than someone else's? As a manufacturer, what can I offer to distributors to enhance their website? What should I do for mine? What should be on my portal? (and there are more, the question becomes ... "What is my plan?")

• Differentiation. What truly makes me difference than my competition? And is it what I think or what my customers think? Does my team live it daily? How should I communicate this to more than just my top customers? To prospective customers?

Acquisitions / Consolidation. Can expanding territory add value to my business (it can add volume)? How do I communicate my value in this new market? How could diversification increase the value of my business while also increasing share of customer wallet

Customer Loyalty (Ownership). With the changes going on in the manufacturing community (expanded product offerings, consolidation, rep changes, etal). Manufacturers are also doing more to influence end-customers. As a distributor, how do you gain greater customer loyalty, or, in the words of one distributor, "ownership" of the customer? How "close" should I bring a rep to "my" customer? What do my salespeople really know about my customers (not theirs)? And what about my unassigned accounts?

Beyond my top 5% of accounts. For many distributors, the top 5% of accounts represent 65-70% of sales. How do I reach beyond these customers to determine whom is doing more with my competition? How do I increase sales to them at reasonable margins? Or do I just want to focus on my biggest and hope to "ride their tide?"

Branding. What am I known for, or "as"? What do I want to be known for / as? What do others whom I do business with (up channel and down channel) think of me? How do I portray myself to them? Remember, others' perception of you = their reality.

Marketing Technology. Technology has come to marketing. Everything from design to CRM to websites to e-marketing in its various forms to marketing automation systems and more. Is my staff prepared? Does my IT department understand? Can I afford any, some or all of it? Does this mean that there now needs to be a defined marketing budget vs everything being funded through manufacturer co-op funds? As a manufacturer, how can I use the same tools to better market to my distributors? to end-users and influencers?

New Product Support. The pace of new product launches, or product enhancements, has accelerated. How do I get the message to my salespeople quicker and more effectively? to customers? As a manufacturer, can I afford the delay between introducing something to my sales force and them getting it through the channel and then to end-users / contractors? How can I accelerate this process?

Margins. Few companies have sustainably increased margins. There are price optimization companies that espouse increasing margins by 2-4%, however, how do I get my salespeople, my company, to understand that operating costs increase (healthcare, taxes, maintenance, etc) and that we need to always seek to optimize margins which means working smarter, better, more efficiently and promote our value? How do I stop the steady erosion? (and, am I willing to make the necessary changes and communicate the appropriate message?)

Customer Satisfaction. At the end of the day, it's all about the customer. Are they satisfied? Are we meeting their needs? Do they value doing business with us? What can we do to do better? I know my customers have choices, how can I be their first choice? Once I understand how we perform I can then focus on improving what is important to them. From there I can then consider how to increase the recency of their orders, the frequency of their orders and the monetary value of their orders to increase my sales and profitability. As a manufacturer, am I meeting the needs of distributor principals? Of their purchasing department? Of their salespeople? Where do I compare vs my competition (or am I happy with just switching share year in / year out or swapping distributors in a marketplace)?

Lots of questions. And there answers. The process starts with exploring where you are, understanding where you want to be and then envisioning the path to get there.

Hopefully we can help you in 2015 conquer your challenges and achieve new heights.

David Gordon and Stan Rydzynski, of the Channel Marketing Group, help manufacturers and distributors in the construction, industrial and energy industries. Reach them at (919) 488-8635 or by e-mail at dgordon@channelmkt.com orsrydzynski@channelmkt.com.

COMMENTS: 1
David and Stan Nail it Again
Posted from: Frank Hurtte, 1/2/15 at 9:56 AM CST
Once more my friends David and Stan hit the nail squarely on the head. The only point they left out would be the difficulty many distributors are having in finding quality/qualified people. In spite of what the TV Pundits are spewing, distributors are telling me people are hard to find

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