It’s been two years since our world was thrust into the throes of a global pandemic, forcing PTDA member companies
to respond in agile and decisive ways. Although the term pandemic itself remains part of the culture, by most accounts we are beginning to emerge from this remarkable point in history. Where do things go — or grow — from here? Member companies must now seek and seize the opportunities during the recovery and prioritize strategies to build business and resiliency. Those that do will continue to succeed in the marketplace as greater certainty and stability return.
So, what lessons can we glean? How you serve your customers has certainly changed, or has it? According to a recent McKinsey report, hybrid selling (which spiked during the pandemic) is expected to become the most dominant sales strategy by 2024 — directly correlating to shifts in customer preferences and remote-first engagement. Customers are seeking a mix of online, remote via phone or video, and even in-person interactions. This means business models must continue to shift and move with the customer.
“Business has changed from a customer perspective, a manufacturer perspective and the distributor perspective,” says Berry Smith, president, TBC, Inc. Texas Bearing Company. “Attitudes about onsite visits, along with attitudes pertaining to electronic or Internet-based business practices I believe have changed forever.”
“The recognition that digital business is a critical part of the sales and supply chain will be critical to future success for PT/MC companies,” says Bill Moore, PT/MC industry executive. “Successful companies have both external and internal
“From our manufacturer’s perspective, they have placed much more emphasis on us as distributors doing business with them in an electronic or online method,” says Smith. “They have shifted customer service from a phone call with a live person to an online-based customer service portal. When we, as distributors, make a call and visit with a manufacturer’s representative over the phone, we have noticed that there are still, and may forever, be a lot of remote work locations. Manufacturers inside sales reps are no longer in an office environment but working remote or from home.”
It’s not news that the market was shifting to a more e-commerce-based and rep-free experience. According to research from Gartner, before the pandemic, 33 percent of buyers wanted a rep-free buying experience; a number that grew to 43% in 2021. It is expected that the number will continue to rise.
Despite offering web-based order entry and customer service capabilities, TBC, Inc. reports phone calls remain the preferred means for servicing customers. “We have realized that our customers are very appreciative of being able to call into our branch locations and talk to a real person,” says Smith. “They can obtain order status information, place orders or visit with a person about their respective problems.”
This summer, PTDA will launch a Voice of the End Customer Research Survey. The last iteration of this survey was conducted in 2018. With four years and a pandemic between, there is likely to be important insights relating to what end customers need and expect from distributors in terms of capabilities, service and communication.
“Customers still need expertise but expect delivery of that expertise via multiple platforms including remote learning and video assessments as well as face-to-face,” says Moore. “They also expect suppliers to have the ability to move quickly as needs change. Additionally, customers expect their distributors to have robust supply capabilities, so the customer is not forced to add new suppliers to their portfolio to keep their facilities up and running.”
Regardless of how and if current marketplace and supply chain issues resolve in the coming months, it’s clear greater emphasis will need to be placed on deeper conversations and needs assessments between distributors and end customers. “I think our industry will be challenged to differentiate clearly the value proposition that goes beyond price and availability,” says Moore.
Research from Gartner reveals sales reps who help customers accurately diagnose problems can increase customer confidence by five percent. Likewise, helping customers understand the technical aspects of a product is associated with another nearly six percent boost in customer confidence.
With disparities brought to the foreground, now is the time to assess and determine how companies can improve processes to ensure they do not lose customers to competitors. “I think a challenging factor for the sales organization is how to cascade their value both vertically and horizontally throughout the customer organization when digital and remote business create barriers to meeting customers and understanding their needs. It is important suppliers demonstrate their ability to meet and exceed the customer’s needs, says Moore.”
The greatest opportunity for growth, according to Moore, may be supply chain resiliency, which coupled with strategic customer forecasting, provide barriers to competitors’ entry and opportunities to take share. A recent MDM article addressed ways distributors can mitigate current supply chain concerns. This includes promoting clear and open communication up and down an organization’s hierarchy so responses to concerns can be made quickly and efficiently, creating mitigation plans based on “what if” situations and structuring communication channels, and regular outreach to suppliers and vendors.
Understanding the right approach to solving all these issues is essential. Moore offers this statement to sum up what companies should consider when recalibrating contingency planning and pivoting business models: “Don’t have all your eggs in one basket.”
Filed Under: Coupling Tips