By Chris Brown
My previous column dealt with Amazon Business and Disintermediation as aspects of Illumigeddon. My simple suggestion for distribution response to both is to find ways to stay relevant and invaluable to both clients and vendors. Distribution must add significant, measurable, recognizable value to the selling equation, if it is to stay in the equation. For many distributors, that means a rethinking of their business model.
It means investing in a new level of technological expertise as smart lighting (and then intelligent lighting) becomes the norm. Lighting is not just about light anymore. There is a whole new language of lighting that must be learned, understood and communicated to increasingly sophisticated clients. Social media must be mastered. Millennials need to be hired and heard.
We need to remember that sooner or later, our clients’ millennials will be making contract and purchasing decisions. And they have grown up with the ease and reliability of Amazon and similar online product and service providers. Not to mention next-day delivery, and coming soon, same-day and even 2-hour delivery. And that gets to “easy to do business with.”
In the “good old days,” that may have had a lot more to do with personal relationships with client decision makers than a distributor’s technological sophistication. Today, that is changing quickly. And “easy” isn’t just about order entry – it’s about competence, consistency, proactivity, bringing solutions, not just products to the table. But order entry is the front door to “easy.” I recently had difficulty opening an online account – an unintuitive website requiring duplicated shipping/billing information among other annoyances. When I completed the order, I was asked to comment on the buying experience. I asked “Has your CEO ever tried to open an online account on your site?” I also took the time to outline my site issues. Needless to say, I never heard back from them. Not “easy to do business with” and won’t be doing business with them again.
Bottom line, “easy” isn’t easy. Innovation is key to becoming “easy.” Innovation starts with thinking about, and then rethinking, a business model to make sure it is relevant, necessary and as technically and technologically competent as possible. Dirk Beveridge is the founder of UnleashWD, an annual innovation conference for Wholesale Distribution (its 4th annual to be held in Chicago September 16-17) and the author of INNOVATE! How Successful DistributorsLead Change In Disruptive Times!
I asked Dirk for his comments on what “easy to do business with” means today and how distributors can start to innovate to survive and thrive in an age of disintermediation and Amazon Business.
Dirk’s response:
The very notion of “relationship” is quickly changing. As a parent of two adult children I remember my wife and I fretting over AOL’s Instant Messaging Service. As our son and daughter were in middle school and early high school years, the house phone stopped ringing.
They seemed to only communicate with friends via IM. And then came the iPhone. IM seemed to disappear overnight and the communication between friends devolved to one of the least technical forms of digital communication there is, text messaging. And then Facebook, Snapchat … the list goes on.
The point is – they found the easiest method of staying in touch with those who were important to them. It felt very uncomfortable to my wife and I – we worried about their ability to develop real, strong, meaningful relationships in this new day. They’re doing just fine, by the way.
So bring this forward to distributor relationships with our customers. I find the very notion of relationship is changing and there are still many who are longing for the good old days Chris alludes to above.
I believe we in distribution must break free from the often-cited truism that “this is a relationship business.” In fact I’ll take it a step further and say we have to obliterate from our vocabulary that “this is a relationship business.”
When I hear people using these words, I really believe in the majority of instances what we are really saying is “I want to maintain relationships, in the way we maintained relationships in the past.” Remember those days when your customer answered your calls on the first ring? They always had the time for you? Every Wednesday, you’d have lunch. And certainly you’d get that golf game in, if not on weekends during the annual industry meeting.
Those days are becoming few and far between.
Are relationships important? Absolutely. What defines a relationship, or at the very least how they are going to be developed and nurtured however going forward is quickly evolving. Going forward relationships will include:
Blend of human and technology interaction – in years past the relationship was almost 100% person to person. Today, with smart phones, tablets, apps, e-commerce, and more your relationship with customers will be a blend of human and technology interaction. And technology is playing a greater role. In this interview with L.T. Gibson, the President and CEO of building material distributor US LBM, he shares how this new blend drove the company to create a compelling new app that is redefining relationship and “easy to do business with” for their contractor customers.
Organizational relationships – in years past the single relationship that often made or broke a relationship was the one-to-one relationship between the customer and our outside sales representative. Today, technology is redefining and broadening that relationship to encompass your entire organization. The example Chris cites above of his experience opening an online account could – should be viewed as a failed relationship between him and that company’s marketing department. Or IT department. Or those departments responsible for that online experience. It’s no longer just a one-to-one relationship.
Joe Nettemeyer, President and CEO of industrial distributor Valin Corporation is in the process of rethinking his business model as a result of these organizational relationships. In this interview he explains what the Valin team is doing and his fundamental belief that to win in today’s market we must define relationships in a different way.
There is of course more to this story of what will define “easy to do business with” in the future.
I do believe that to get to the heart of it, we need to have serious conversations – big conversations around this notion of “this is a relationship business.”
In the end, “easy to do business with” and relationship will be defined by the customer and not ourselves. Those of us who are ready to get closer to that customer – wins.
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Brown is the CEO of Wiedenbach-Brown. Find him on Twitter at @illumigeddon.
Tagged with disintermediation, distribution, Exclusive Feature, lighting, tED