Ask those same executives how often two sales reps price the exact same opportunity the same way, and the answers become a lot less certain.

If you have 250 salespeople, you probably have 250 pricing strategies.

This is an exaggeration, but only slightly. In many distribution companies, pricing decisions are made one quote at a time by individual sales reps responding to customer conversations, competitive pressure, and personal experience. Over time, those individual decisions add up to hundreds of different approaches to pricing.

One sales rep discounts to preserve a relationship, and another prices aggressively to win new business. A third refuses to move on price. None of these decisions are necessarily wrong on their own, but together they create an inconsistent pricing strategy that nobody designed.

Eventually, pricing becomes something everyone owns but no one truly manages.

Very few distributors wake up one morning and decide to let every sales rep independently determine pricing. It just happens.

It usually starts with reasonable decisions. A customer resists a price increase, so a sales rep makes an exception. A long-time strategic account gets a little more pricing flexibility than everyone else. New competitive pressure leads to a deeper discount than originally planned. Before long, those decisions become standard practice, and individual judgment starts to outweigh company strategy.

Sales reps are just responding to the information they have available. I’m not blaming them. They usually don’t have the full picture, and that’s on the company.

As you grow by adding new branches, acquiring competitors, expanding territories, and hiring more reps, this challenge becomes even more severe. Every person you add and every company you integrate brings a new way of thinking about pricing.

Without a shared pricing framework, inconsistency will scale with revenue.

Sales and Pricing: Two Different Views

Sales reps understand customers better than anyone. They know which customers negotiate hard, who is most sensitive to price changes, and which accounts value responsiveness, availability, or expertise over price.

That’s valuable.

Pricing teams see a different part of the picture. They’re responsible for balancing individual customer needs with the financial objectives of the business.

What sales reps often can’t see are the business factors shaping those pricing decisions, including:

• Individual customer profitability
• Contract terms and price caps
• Supplier programs and rebates
• Historical buying behavior
• Company margin targets
• Pricing across similar accounts

At one large distributor, for example, more than 600 customer agreements were being managed manually in a spreadsheet. Each agreement could contain different price holds, expiration dates, category restrictions and other terms governing when prices could change. Add supplier programs and rebates to the equation, and determining the appropriate price becomes far more complicated than applying a standard margin target.

This information lives in different systems and departments. And changes in supplier economics don’t always show up in the same place. For example, a manufacturer might raise its list price but not change the distributor’s purchase-order cost because the adjustment is being made through a rebate program instead. Now the pricing team must look to another system to understand what changed before determining the right customer price.

It’s like the street game where someone hides a ball under moving red cups. The value is still there, but pricing teams must figure out where it went before they can determine the right customer price.

Expecting sales reps to keep up with those moving pieces isn’t realistic. That’s why pricing needs to be supported by shared data, consistent business rules, and systems that bring those variables together before quote reaches the customer.

Pricing isn’t just about today’s order. Every discount affects what a customer expects tomorrow. If a sales rep consistently gives away margin while another holds the line, customers begin receiving different answers depending on who picks up the phone.

That can lead to:

• customer confusion
• internal frustration
• difficult negotiations
• inconsistent value perception
• more approval requests and pricing exceptions

Those inconsistencies aren’t the fault of individual sales reps. They’re the result of inconsistent pricing discipline. The answer isn’t rigid pricing rules; B2B selling will always require negotiation and judgment.

That’s why pricing leaders need to position their teams as an extension of sales, not as the department that reviews discounts and enforces rules. Creating greater consistency is a cultural challenge, not a math equation. Salespeople need guidance they trust and can use in the middle of a customer conversation. The goal is to provide that guidance before those conversations begin.

Pricing guidance also must align with sales compensation. I recently spoke with a distributor that was struggling to pass through tariff-related price increases. One of my first questions was how their salespeople were compensated. The answer was revenue. That creates an obvious conflict: If a rep is rewarded for protecting revenue rather than margin, why would we expect that person to risk losing an order by holding firm on a price increase? From the rep’s perspective, absorbing the increase may protect the sale, even if it hurts the company’s profitability.

If pricing strategy says one thing while compensation rewards another, pricing will usually lose. Distributors need to consider whether their incentive structures reinforce the pricing behavior they expect from sales.

I’ve found that the most effective pricing organizations establish clear guardrails that help sales reps understand:

• recommended pricing targets
• acceptable negotiation ranges
• accounts that require special handling
• where pricing flexibility exists
• when approvals are required

My goal has never been to stop salespeople from thinking. That wouldn’t serve the business. Relationships, judgement, and experience will always matter. What I want is for every salesperson to start from the same foundation.

Private-label products are a good example of why that foundation matters. Say a distributor buys a national-brand product for $9.99 and sells it for $12.99, while a comparable private-label product costs the distributor just $4.99. A sales rep might look at that lower cost and offer the private-label product for $6.99, believing they’ve made a strong margin while saving the customer money. But the customer was already willing to pay $12.99. The rep has given away far more revenue than necessary to make the private-label option attractive.

A shared pricing strategy gives the rep a better starting point. Instead of pricing the private-label product from its cost up, the distributor can price it relative to the national brand — offering the customer meaningful savings while preserving more of the value for the business.

Customer segmentation, profitability data, pricing guidance, and business rules provide a consistent starting point, while leaving room for experience and relationships to shape the final conversation. Sales reps understand not only the recommended price, but why it’s the right place to begin.

That only happens when sales, pricing, merchandising, purchasing, finance, and leadership operate from the same information. Technology doesn’t replace those teams; it connects them, bringing the data behind pricing decisions together before a quote reaches the customer. The result is more consistent pricing, better conversations with customers, and decisions that support both relationships and long-term profitability.

The Real Test of Your Pricing Strategy

You won’t achieve pricing consistency by telling sales reps to “follow the rules.” Consistency comes from giving people the information, guidance, and confidence to make decisions that align with the company’s broader pricing strategy while still serving the customer in front of them.

The distributors that consistently protect and grow margin don’t have the most restrictive pricing policies. They equip sales, pricing, finance, and leadership to make decisions using the same information, priorities, and business objectives.

After all, your pricing strategy isn’t defined by the slide deck presented at the annual sales meeting. It’s defined by the thousands of pricing decisions made across your business every day.

If those decisions are driven by individual instinct, you don’t have one pricing strategy. You have as many pricing strategies as you have sales reps. But when every decision starts from the same foundation, your strategy finally becomes something customers experience consistently, and your business can scale profitably because of it.

The post 250 Sales Reps, 250 Pricing Strategies appeared first on Distribution Strategy Group.

Great salespeople—the truly talented rainmakers—are about as rare as unicorns and just about as mythical, too. In many cases, they own their customers more than their employers do.

A few years ago I was making calls with a top-notch electrical supplies rep. As we pulled up to a major manufacturing plant, he said, “I took this account from $5,000 to $250,000 in one year.”

“Wow!” I said. “How’d you do that?”

“Easy,” he shrugged. “I used to work for another distributor and did $250,000 a year with this customer. They laid me off, their competitor hired me, and I just switched their sales over.”

No wonder many electrical distributor reps make so much money. If you own an account base worth millions and can take it to any distributor in town, you’re going to spark a bidding war for your services.

But look at what actually moved. Not a price file. Not a stocking program. What moved was his knowledge of those buyers: who signs, who stalls, what they run on the floor, what it would take to make them switch. All of it lived in his head, which is exactly why it left with him.

Around the same time I rode with another rep whose customers trusted him so much that plant engineers called him in to diagnose their technical problems. We spent three hours at one plant while he taught two engineers what was going wrong with a motor control system. He’s not an engineer. He never went to college. But he’s in his mid-60s and he’s been selling plant automation for four decades. He doesn’t just know where the bodies are buried. He buried them.

He was also unhappy. He was six months from retirement and management still hadn’t assigned anyone to take his place. “How can I teach someone about my accounts if they haven’t chosen anyone yet?” He loves his customers and wants them to succeed even after they stop being his responsibility. His own leadership had made it impossible for him to do right by them.

That’s the part that should bother you. Not the retirement. The waste.

Until Recently, You Couldn’t Have Fixed It

To be fair to leadership, the tools that have made it easy to capture what’s trapped in a veteran’s head didn’t exist until recently. The state of the art was putting the replacement in the truck for a few months and hoping he was savvy enough to ask good questions before the clock ran out. That’s not a process. That’s a prayer.

What changed is that you can now hand an enormous, messy pile of unrelated data to a Large Language Model  (LLM) and get back something organized. Your enterprise resource planning (ERP) transaction history. Customer relationship management (CRM) notes. Quote and bid history, including everything you lost. Customer service call recordings. Contracts and rebate agreements. Payment behavior. If you use our tools, DemandRX and Customer ExperienceRX, you can add category-level potential and satisfaction data on top of all of it.

But the most valuable thing you can feed it isn’t in any system. It’s one or more, recorded, sit-down interviews with the rep who’s leaving, plus the customer service people, inside sales reps and drivers who serve those accounts. Your ERP can tell you what a customer bought. Only the interviews tell you why the veteran did what he did. Judgment is the part that walks out the door, and judgment has never been in a database.

Think about what this used to require. Pull a dozen reports. Schedule, record and transcribe interviews with the rep, the CSRs, and the drivers. Put an analyst on trying to figure out the right business intelligence (BI) queries to surface a trend buried in six years of transactions, instead of just handing over all six years and asking what’s in there, which is what you can do this afternoon.

The old way was a project. Nobody launches a project every time a rep retires. Which is precisely why nobody has been doing this at all.

Try It This Week

Pick a rep who’s leaving. Better, pick one who might leave in the next two years. Gather what you can and paste this in:

You’re a senior sales operations consultant with deep experience in wholesale distribution. I’m transitioning a territory from a departing rep to a new one. Everything I’ve attached is the source material: [list it].

Rules: use only what I’ve given you, cite the source behind every factual claim, and mark what you don’t know as unknown. A blank is useful. A plausible guess about a real customer is a liability. Where my interview transcripts and my system data disagree, tell me about the conflict instead of smoothing it over. That gap is usually the most useful thing in the file.

First, analyze the territory. Revenue and margin trends, concentration risk, and a brief on each of the top 25 accounts covering who really decides, what they buy from us, what they’re clearly buying somewhere else, and the one thing a new rep would get wrong. Rank the specific customer-plus-category opportunities and show me your logic. Flag the at-risk accounts, including the ones that look fine in the numbers but not in the interviews. Tell me our service strengths and weaknesses in customers’ own words. And for every major account, tell me who besides the departing rep our customer could name at our company. If the answer is nobody, say nobody.

Then stop. Before you write any training material, give me your best clarifying questions ranked by how much the answers would change the program, tell me what data is missing, and write the interview guide for the follow-up conversation you’d want with the outgoing rep.

After I answer, build a 90-day onboarding curriculum with a knowledge check and answer key for each module, all written from real situations in this territory. Include a one-page day-one crib sheet and a first-90-days call plan sequenced by risk and opportunity rather than revenue. Finish with a gap register listing every open question and unverified claim.

Then argue with what comes back. Good prompting is a conversation, not a transaction. Ask it what other data would sharpen the analysis. Ask it to write the interview guides for the people you still need to talk to. Ask it to build the tests, then argue with it over the questions it wrote. Treat these systems like elite consultants: they give you better answers when you give them better material, and they’ll tell you what they’re missing if you bother to ask.

Two rules, though. Make it cite a source for every claim about a customer and state plainly what it doesn’t know, or you’ll get fluent, confident, wrong statements about real accounts that your new rep repeats in front of the buyer. And make the departing rep read the whole thing. He’s your fact-checker, and a playbook he signed off on carries authority with his successor that a generated document never will.

None of this replaces the ride-along. It makes the ride-along worth something because the new rep shows up already knowing which questions matter.

Start Before the Notice

Veterans slow-walk transitions when a clean handoff costs them income, and no prompt ever written solves that. Pay for the overlap. Tie a bonus to whether those accounts are still yours a year and two years later. Make mentoring a paid part of the job instead of a favor you’re asking for.

The balance of art and science in selling really is shifting, but the art was never really art. It was expertise nobody bothered to write down. We finally have a practical way to document expertise and pass it down, and the distributors who use it will start the process of owning their customers more than their reps do.

For more state of the art information on coaching and leading sales, don’t miss our upcoming webinar, State of Distributor CRM and Sales, Wednesday, August 26^th, 9AM PT, Noon ET. Leading sales training expert, Mike Kunkle, will join Jonathan Bein, Ph.D. from Distribution Strategy Group, to review best practices and deep research data about how to get better results and productivity from your sales force.

The post The Balance of Art and Science in Selling Is Shifting appeared first on Distribution Strategy Group.

Then his wife got a diagnosis that changed everything. Ray wants to be home, and no reasonable person would argue with him. Three years just became four months.

Now, let’s watch that same announcement land in two different companies.

One Announcement, Two Companies

In Distributor A, the news sets off a scramble. Nobody has mapped Ray’s relationships, so nobody knows which accounts are held together by Ray alone. The customer relationship management system (CRM) has contact names, phone numbers, and not much else. There’s no successor identified, so the region manager starts interviewing while Ray runs out the clock. The eventual handoff is a spreadsheet, a few joint calls squeezed into Ray’s last three weeks, and a sincere “call me if you have questions” that expires the first time Ray’s boat gets decent cell coverage.

In Distributor B, the same announcement still stings. Four months instead of three years is a sprint, no matter how prepared you are. A structured transition program doesn’t prevent the surprise, and it doesn’t eliminate the initial panic that comes with an accelerated departure like this. But in Distributor B, Ray’s key relationships are already mapped. His top accounts have more than one person from the company in them. His account plans are living documents, not annual paperwork. The CRM actually says something useful. The scramble in Distributor B is about accelerating a plan that exists. The scramble in Distributor A is an archaeology dig.

The difference between these two companies isn’t luck, and it isn’t Ray. It’s a system. The rest of this article is about how to become Distributor B.

The Silver Tsunami Has a Date Attached

However they refer to it, distribution leaders have worried about the silver tsunami for years, usually in the context of ownership transitions and the labor force in the warehouse and on the counter. It applies just as much to the sales force, and the numbers say it’s not a distant problem.

According to U.S. Census Bureau data (compiled by Data USA), the average age of wholesale and manufacturing sales representatives is roughly 46. More telling: the three largest age cohorts in the occupation are 50–54, 55–59, and 45–49, which together make up more than a third of the entire workforce. And in most distributors, age and book size correlate. Your most seasoned reps often hold your largest accounts, because those relationships took decades to build.

Investors treat the average age of a senior leadership team as a yellow flag when it’s high and there’s no succession plan in place. The same logic applies to your sales force. If a third of your revenue is managed by people within striking distance of retirement, and you have no transition discipline in place, that’s not a talent issue. That’s an enterprise risk sitting in plain sight on your org chart.

Here’s what makes this problem sneaky: accounts rarely leave at the retirement party.

They drift. A category moves to another supplier. A location starts buying elsewhere. A new project gets quoted with someone else “just to compare.” Meanwhile, the account still shows active in your system, still orders regularly, and still looks fine on the report. The revenue erosion happens one product line and one location at a time, which is exactly why nobody notices until the annual review, when someone asks why a $2 million account is now a $1.3 million account. (Wallet-share erosion deserves its own article, and I plan to write it. For now, know that a botched transition is one of its most reliable causes.)

What a Sloppy Handoff Really Costs

And let’s be honest about the competitive dynamics. Your competitors know Ray retired. Some of them sent a card. The months after a veteran rep leaves are the single best window a competitor will ever get to break into an account you’ve held for twenty years, because the one thing protecting that account, the personal relationship, just left the building. (Sidebar: this is amplified when the average age of your buyers mirrors the average age of your sellers—a separate but related risk that isn’t often discussed.)

Retirement Forecasting Is Succession Planning for the Sales Force

Companies run succession planning for executives. They identify critical roles, forecast likely departures, develop successors, and review the plan annually. Almost nobody does this for the sales force, even though a veteran AM’s departure can move revenue as fast or faster than most executive exits.

Retirement forecasting is the succession planning of the silver tsunami. It means maintaining a forward view of your sales team: who is within five years of likely retirement, which of their accounts matter most, and which of those accounts depend on a single relationship. It means starting transition work 12 to 24 months out, not 90 days out, so there’s a runway for mentoring, introductions, and knowledge transfer while the veteran is still engaged and earning.

One caution on ownership: the frontline sales manager should feel real accountability here and should actively support the incoming AM. But like leadership succession planning, this can’t be delegated down and forgotten. Executives and human resource (HR)/Talent own protecting the company. If retirement forecasting lives only in a manager’s head, it retires when the manager does.

Map the Landscape, Multithread the Accounts, and Solve the Comp Problem

This is the heart of the work, and it has three parts.

Map the Landscape

First, map the current state of the account. In The CoNavigator Method, I call this Buyer Landscape Mapping: documenting who the players are in each key account, their level of influence, their attitude toward you, and their role in decisions. Most companies, when they attempt this at all, do it blindfolded, spun around, and overly confident. The map gets built from assumptions and optimism rather than evidence. I jokingly call Buyer Landscape Mapping the business version of Pin the Tail on the Donkey: the skill is in placing every stakeholder and their buyer type and buyer role, in their correct spot on the map, considering those factors and their influence and attitude. Not by guessing, assuming, or hoping.

For each of the veteran’s key accounts, name the stakeholders, score the relationships truthfully, and ask the uncomfortable question: if Ray disappeared tomorrow, who in this account would take our call? If the answer is one name, or no name, you’ve found your exposure. A seven-figure account hanging on a single handshake is not a relationship. It’s a liability.

Multithread the Accounts

Second, multithread before the transition, not during it. Introduce the successor while the veteran still has equity to spend. Add technical specialists, inside sales partners, and executive sponsors to the accounts that matter most, so the customer experiences a team rather than a person. And keep qualifying. Ongoing qualification means watching for changes: new decision makers, shifting priorities, a competitor suddenly getting meetings. Those changes matter in any account. During a transition, they’re everything.

Solve the Comp Problem

Third, deal with the money, because this is where good transition plans go to die. The veteran has no incentive to hand off accounts early. In many cases, a veteran’s final working years are also their highest-earning years, and Social Security calculates its benefit from a lifetime’s highest-earning years. Cutting Ray’s commission in year 31 doesn’t just cost him current income — it can quietly shrink one piece of his retirement income, on top of whatever else he’s counting on. Meanwhile, the incoming AM won’t spend a year developing someone else’s book for peanuts. And distributor margins don’t leave a lot of room to pay two people generously on the same revenue.

There’s no free lunch or Easy button here, so stop looking for one. What works is a deliberate overlap structure: split books with a glide path that shifts commission gradually from veteran to successor, transition bonuses tied to retention milestones (measured 12 and 24 months after the handoff), and paying the veteran explicitly for mentoring and knowledge transfer as part of the job, not as a favor. It costs money. So does losing the account. Price both and decide. And when in doubt or concerned, engage an expert compensation firm to help you develop a plan that your leadership team and board or investors can live with.

The default knowledge transfer plan in many distributors is “ride along for three months.” Loose plans like this leave too much to chance.

Capture What Ray Knows Before It Drives Away

Structured knowledge transfer means a repeatable, account-by-account debrief: the history of the relationship, commitments made (formal and informal), pricing agreements and how they came to be, service quirks and workarounds, each stakeholder’s goals and pet peeves, and every open thread. Treat it like the interviews you’d conduct if you were writing the biography of the account, because that’s what you’re doing.

Then make it findable. Sales enablement platforms like Allego (I’ve worked with them since 2017 and fully endorse them) and similar content management systems are built for exactly this: short, searchable videos of Ray walking through each major account, in his own words, that the new AM can revisit six months later when a situation Ray predicted actually happens. A binder gets written once and never opened. A series of three-minute, searchable videos gets watched, during transition and on-demand, as needed.

Make Your CRM the Brain of the New AM

Here’s a simple test: pick one of your veteran’s top ten accounts and read the CRM record. If a stranger read it, could they have an intelligent conversation with that customer next week?

For most distributors, the honest answer is no. And that’s the problem in one sentence: if it isn’t in the CRM, it retires with the rep.

CRM data quality is usually framed as an administrative annoyance, something sales managers nag about and reps grudgingly minimally comply with. Reframe it. Complete account records, documented relationships, buying history with context, and current opportunities are succession assets. The company that treats CRM hygiene as a succession issue builds a brain the new AM can actually use. The company that doesn’t hand its new AM a phone book.

Account Planning Makes Handoffs Survivable

If you’ve read my work here before, you knew this was coming. Living account plans, the kind that get reviewed and updated in a regular cadence rather than built annually and filed, change the nature of a transition entirely. (I laid out the full process in How to Build Key Account Plans That Get Results, right here on the Distribution Strategy Group blog.)

With a real account plan, the new AM inherits the account’s history and direction already worked out: the COIN-OP analysis (Challenges, Opportunities, Impacts, Needs, Outcomes, Priorities), the PCF-L account objective (Past Performance, Current Performance, Future Potential, and Likelihood — the analysis that determines whether an account should be Acquired, Grown, Retained, Reactivated, or Retired), the buyer landscape and relationship map, the growth strategy, current initiatives, and the open risks. The transition becomes a driver change, not a rebuilt race car on a new track. The race, the car, and the course don’t change just because someone new is behind the wheel. Without a plan, the new AM isn’t taking over a lap in progress — they’re handed the keys to a car they’ve never driven, on a track nobody mapped for them, mid-race.

Don’t Forget Who This Is Hardest On: Your Customers

Amid all the internal planning, remember that the customer didn’t ask for any of this. From their side, a trusted advisor is leaving and an unknown is arriving. Handled badly, a transition feels like a downgrade they have to tolerate. Handled well, it can actually strengthen the relationship.

Two concepts from my value drivers work apply here.

Execution Value is the value of making things run smoother: reducing friction in day-to-day processes and interactions. Purpose Value is alignment with the customer’s mission and strategic objectives. A well-run transition delivers both. Low friction, because the customer never has to educate the new AM on their history, their pricing, or their quirks. And genuine upside, because a transition is the perfect occasion for a forward-looking business review: fresh eyes on the account, a re-examination of the customer’s goals, and visible proof that the company, not one individual, stands behind the relationship.

Plan the customer communication with the same care as the internal plan. Who tells them, when, and how. What they hear about continuity and what they see that proves it. The goal is a customer who finishes the transition thinking, “That was easier than I expected, and our new rep seems well-informed, caring, and attentive.”

Closing Thoughts

The retiring rep problem is not a surprise. The demographics have been public for years, the pattern is well known, and every distribution executive can name the veteran reps whose departures would hurt. What’s missing in most companies isn’t awareness. It’s a system: retirement forecasting owned at the executive level, honest buyer landscape and relationship mapping, multithreading done early, compensation structures that make the handoff workable, structured knowledge capture, CRM records that function as a brain/memory aid, account planning discipline, and a customer experience that turns a risky moment into a moment of value.

Distributor B isn’t a fantasy. It’s a set of decisions, made before the announcement instead of after it.

Because somewhere in your sales force right now, a rep is planning a retirement you haven’t forecasted. Do you know who? And if they walked into your office Monday morning and gave you four months, could you name every relationship and the associated revenue that walk out with them?

If yes, congratulations on the purposeful management of the silver tsunami. If not, you have some work to do and a way to go about it.

The post The Retiring Rep Problem: How to Transition Accounts Without Losing Them appeared first on Distribution Strategy Group.

As I progressed in my career and moved to other distributors, something clicked. The products we sold at Grainger? They were the same products we were selling at my new company. Same manufacturers. Same specifications. Same availability.

What was different? The experience we brought to customers. And that’s become the only real differentiator in today’s world.

The Evolution from Transactions to Touchpoints

Moving up through operations and into leadership roles, my perspective shifted again. It became less about individual transactions and more about how we were delivering experience across all the touchpoints in our business. That’s the real win in any customer experience work you do.

You need to understand all the points where your customer touches your business and know how each one is performing. Here’s the thing that keeps executives up at night: you can have an amazing experience up front with placing an order and receiving a delivery, but if you have a not-so-great experience on the back end when the customer wants to pay the invoice, all the work you’ve done up front has completely fallen apart because that one touchpoint failed.

I’ve seen it happen. A distributor invests in improving quote turnaround times, trains their counter staff to be more responsive, and optimizes their delivery routes for speed. All excellent work. Then customers hit accounts receivable with a billing question and suddenly they’re waiting three days for a call back or dealing with an inflexible credit policy. One weak link in the chain undermines everything else.

The Two Ways Customer Experience Initiatives Fail

I’ve lived through both extremes of how companies approach customer experience measurement, and both miss the mark.

At Grainger, we did surveys every quarter. The consistency was there. That’s because we measured religiously. But much of what we got back wasn’t actionable. We’d see scores, we’d track trends, but we didn’t have clear direction on exactly what to fix or where to focus. Valuable information, collected regularly, but not translating into concrete operational improvements.

At another company I worked for, we went the opposite direction. We’d do surveys occasionally when someone decided it was time. No consistent rhythm. No follow-through. And we shouldn’t have been shocked that we never got any better. We weren’t measuring consistently, and when we did measure, the insights weren’t specific enough to drive action.

Both approaches fail for the same fundamental reason: they’re missing the continuous improvement loop. It’s not enough to measure frequently if you don’t know what to do with the data. And it’s not enough to get actionable insights if you only measure once and never verify whether your changes worked.

The Measurement Cycle That Actually Works

Real progress comes from a complete cycle: measure what matters to customers at each touchpoint, analyze the results to identify specific operational gaps, implement targeted improvements based on those findings, then measure again to verify those changes moved the needle. This sustains the gains you’ve made. It’s continuous. It’s actionable. And it’s the only way to systematically improve customer experience rather than just tracking it.

Just today, I was reviewing results with a distributor who’s been following this approach. 18 months ago, their Net Promoter Score was 61—already superior performance by industry standards. But they didn’t rest on that. They continually and systematically measured to get better. They identified specific gaps between what customers valued and how they were performing, made targeted operational adjustments, measured again to confirm improvement, and then built those improvements into their standard operating procedures. Their latest score? 73. They went from good to exceptional by treating experience as a continuous improvement process, not a one-time achievement.

That kind of sustained improvement isn’t unusual when distributors commit to the full cycle. We typically see 12% to 18% improvement in customer satisfaction scores within the first year for companies that measure consistently, get actionable insights into what specifically to fix, implement those changes and measure again to track progress.

But here’s where many distribution companies stumble: they make improvements and see scores rise, then assume the work is done. Six months later, performance slides back. Why? Because they didn’t sustain the improvements. The cycle isn’t measure-analyze-improve-done. It’s measure-analyze-improve-sustain-measure again. You need to lock in the gains by updating training materials, revising standard procedures, and continuing to monitor performance so improvements become permanent rather than temporary fixes.

The pattern is consistent: identify the specific touchpoints where performance lags what customers care about, make concrete operational changes, verify those changes moved the needle, build them into your ongoing operations, then start the cycle again. Not measurement for measurement’s sake. Not occasional surveys that gather dust. A real loop that drives lasting improvement.

One distributor told us recently that their customer satisfaction metrics have become “our barometer of what to do.” Not a nice-to-have data point filed away somewhere. The actual guide for resource allocation and operational priorities—measured consistently, acted on specifically, sustained through process changes, and verified through the next measurement cycle.

The Real Product Sitting on Your Shelf

Walk into any distribution warehouse and you’ll see rows of products. But talk to the customers who keep coming back, and they’ll tell you something different. They’re not buying your ball bearings. They’re buying the fact that when their production line goes down at 4:30 on a Friday, you answer the phone. They’re buying the reality that your inside sales team knows their operation well enough to catch a potentially wrong order before it ships. They’re buying the seamless experience from quote to delivery to invoice.

They’re buying every interaction they have with you.

This isn’t just intuition. When you measure what drives customer loyalty, asking them to rate not just their overall satisfaction but the importance and performance of specific touchpoints like delivery precision, quote turnaround, credit flexibility, and billing accuracy—patterns emerge. The companies that excel at the handful of things customers genuinely care about across the entire journey. They keep those customers. The ones that excel at one or two touchpoints but fail at others? Well, price becomes the tiebreaker.

What This Means For Your Operation

Here’s where most distribution companies get stuck. They invest millions of dollars in inventory, hundreds of thousands of dollars in warehouse automation, significant capital in fleet vehicles. All critical investments. But then they treat customer experience like an afterthought—something the customer service department handles when there’s a problem.

That’s backwards.

Your inventory management system tells you exactly how many units of each stock-keeping unit (SKU) you’re carrying. But can you tell me with the same precision how long customers wait on hold? How many times must the average buyer call to get an order update? How satisfied they are with your billing process? Whether your credit terms align with what matters to them?

The distributors winning in competitive markets treat customer experience with the same rigor they apply to inventory turns and fill rates. They measure it systematically tracking not just whether customers are satisfied overall, but which specific capabilities matter most to them at each touchpoint and where performance gaps exist. They get actionable insights that point to concrete fixes. They implement those improvements. They sustain those changes by embedding them into standard procedures. Then they measure again to verify progress holds.

A distributor might discover their Arizona branch has slow quote turnaround times that don’t exist in California. They address it by revising the quoting workflow. Six months later, they measure again to confirm Arizona’s performance improved. Then they update training materials and performance metrics to sustain the improvement. Or they find that construction customers rate them lower than manufacturing customers on delivery precision. They adjust delivery processes for construction accounts, train drivers on the new standards, and track whether satisfaction moved—and stayed there.

These aren’t massive strategic problems requiring complete overhauls. They’re specific, fixable issues at individual touchpoints that directly impact whether customers stay or leave—and the only way to know if your fixes worked and stuck is to keep the measurement cycle going.

The Interchangeable Product Problem

When products become commodities, purchasing behavior shifts. Price matters, but it stops being the only thing that matters.

A purchasing manager facing identical products at similar prices will choose the distributor that makes their job easier across the entire transaction. The one that provides accurate order tracking. The one whose team responds to emails within an hour instead of a day. The one that handles returns without an interrogation. The one whose billing is straightforward and whose credit team understands their business cycles.

Your competition isn’t just other distributors anymore. It’s Amazon Business setting expectations for same-day delivery transparency. It’s consumer experiences training buyers to expect real-time updates and frictionless transactions at every step.

The gap between what customers experience in their personal lives and what they tolerate in business-to-business (B2B) transactions is closing fast.

What Changes Monday Morning

Stop treating customer experience as something you understand intuitively and start measuring it with the same discipline you apply to financial metrics. But don’t just measure—make sure you’re getting actionable insights that tell you specifically what to fix. Ask customers what matters most to them at each stage of doing business with you, then track how you’re performing on those specific dimensions across every touchpoint.

Then—and this is the part most companies skip—do something about what you learn. Make targeted operational adjustments based on clear priorities. Build those changes into your standard procedures so they stick. And measure again in six months to see if those changes moved the needle and held. That’s the continuous improvement loop that works.

The insights won’t require a complete business transformation. More often, they’ll point to specific operational adjustments at touchpoints that have outsized impact on retention. It’s integrating customer feedback directly into your customer relationship management (CRM) system, so your sales team sees it in real time. It’s identifying that your Milwaukee customers are genuinely satisfied across the board while your Phoenix customers love your sales team but struggle with inventory availability. It’s discovering that your accounts receivable process is the weak link undermining otherwise robust performance.

These aren’t abstract improvements. They’re concrete changes that protect revenue—but only if you have consistency in measurement, actionable insights that tell you what specifically to improve, and the discipline to sustain those improvements through process changes and ongoing monitoring.

Your products are increasingly interchangeable. Your experience across every touchpoint doesn’t have to be. But you need the complete cycle: measure consistently, get actionable insights, implement specific improvements, sustain those gains and measure again to verify progress holds.

 Are you measuring customer experience consistently enough to track real trends? Are your measurements telling you specifically what to fix? And when you make improvements, are you building them into your operations so they last?

That’s the difference between a measurement program and a continuous improvement system that protects revenue.

The post Your Product Isn’t What Customers Are Really Buying appeared first on Distribution Strategy Group.

I was lucky enough to begin my career at Grainger, and they taught me early that the lens of the customer is the most important one you have. What I learned there, and with every company since, is that looking at the business through the lens of the value stream is how you make improvements that matter.

At one of those companies, I watched a good account walk out the door, and not one department thought it was their fault. Sales had hit quota on that account. Customer service had closed every ticket inside its service window. The warehouse posted a 98% fill-rate that month. Credit has done its job protecting us from a slow-pay risk. Every scoreboard reads green. The customer still left and took 11 years of purchases with them.

The bottom line: customer experience is a company-wide responsibility that crosses every function you run. It must be a team effort because no other way works. Most distributors manage it as if a single team can own it. That’s backwards. And it’s why so many improvement efforts stall after the first survey.

The Myth of Customer Experience (CX) Ownership

The instinct, when a leadership team decides customer experience matters, is to name an owner. Hand it to marketing because they run surveys. Hand it to customer service because they answer the phones. Create a customer experience (CX) manager and check the box.

Back at Grainger, we relied heavily on cross-functional teams, and the person in charge usually wasn’t from customer service. It was the person who could impact that problem the most. Their job ran past their own department. They had to bring the rest of the departments along, so that when we implemented a solution it didn’t break something else in the value chain. That distinction matters.

Here’s the reality of our industry. There’s rarely a formal customer experience (CX) title. Marketing usually spearheads the data because they own the survey. You can even name an owner. None of that changes what the work is. Whoever you put in charge inherits responsibility for an outcome and authority over almost none of the inputs. They can’t set credit policy. They can’t change the warehouse slotting that drives short ships. They can’t rewrite how sales set delivery expectations. So, they do the one thing within reach: they send more surveys, build prettier dashboards, and watch the number sit flat, while the actual drivers of dissatisfaction live in the other departments that never got the memo.

You can assign a steward for customer experience. You cannot delegate it. Those are different things and confusing them is where most distributors get stuck.

Why Customer Experience (CX) is a Team Sport

Walk one order through your building and watch how many hands touch the customer.

Marketing sets expectations before the customer ever calls. Sales make the promise on price, availability, and delivery. Customer service fields the question when something’s unclear. Operations and the warehouse pick, pack, and ship it, and decide whether it arrives complete and on time. Inventory and supply chain decide whether the item was even there to sell. Finance, through credit and billing, decides whether the order ships today or sits on hold, and whether the invoice is clean or triggers a dispute. Executive leadership decides whether any of these groups get measured on the customer’s experience or only on their own departmental number.

Lay your touchpoints out on a wall and you’ll count a lot more boxes than people. They don’t map one to one. Eight or nine names end up owning all of them, and which names matter depends on the touchpoint you decide to fix. The divisions are also finer than the organizational chart admits. Inside finance alone, the credit manager who puts an order on hold isn’t the billing clerk who lets a bad invoice go out. Same department, two different players, two different ways to lose a customer.

The customer doesn’t see eight or nine departments. They see one company, and they judge you on the weakest link in the chain. A flawless sales relationship doesn’t survive, a billing department that fights every credit. A great price doesn’t survive, a backorder nobody communicated.

The Problem with Departmental Thinking

Now it gets dangerous. Every department optimizes the metric it’s measured on, and each one looks like a winner while the customer’s experience erodes.

Say you’ve got a credit problem. The worst thing you can do is hand it to the credit manager and tell them to fix it. They will. They’ll fix it for credit, optimize it for their number, and in the process create a problem for sales, for service, for inventory. The fix is local and the damage is company wide. Multiply that across every function: credit tightens terms to protect days sales outstanding (DSO), and a customer who’s bought from you reliably for a decade gets treated like a flight risk. The warehouse hits its fill-rate target by shipping the easy lines complete and shorting the one item the customer built their job around. Sales books the order and moves on, never flagging that the delivery date was optimistic. Each manager defends their number on Monday. Each number is real. The customer is still unhappy, and no single report shows why.

This is the part operators understand from the plant floor: you can run every workstation at peak efficiency and still ship a bad product, because the problem lives in the handoffs, not the stations. Customer issues always originate in one department and surface in another. The credit hold becomes the service team’s angry phone call. The slotting decision becomes the salesperson’s lost renewal. Look at only department by department and you’ll never find the root cause, because the root cause is the seam between two departments that don’t share a scoreboard.

A Value-Stream Approach to Customer Experience

Stop managing customer experience as a set of departments and start managing it as a value stream. A value stream is the full end-to-end sequence of activities that carries a customer from first request to delivered product—the whole path, not any one department’s piece of it. It’s the same discipline you’d apply to any operational process improvement, pointed at the customer instead of the warehouse.

One of the companies I worked with made every one of us own a value stream. Not in your department. A value stream that cut across all of them. Owning it meant owning the whole path—the handoff coming into each department, the work that happened inside it, and the handoff back out to the next one. You had to walk into credit, into the warehouse, into billing, into customer service, and learn what each group did, how they did it, and how their piece landed on the customer. It was uncomfortable, and it was the most useful thing I did that year, because it forced me to see the handoffs instead of the boxes. That’s what real ownership of customer experience looks like: somebody who can shepherd a problem all the way through the organization rather than optimize one stop on it. Doing it this way forces you to think of the customer first and see it through that lens.

Map the full journey the way the customer travels it: discovery, quote, order, credit approval, fulfillment, delivery, invoicing, support, reorder. Then ask three questions at every step. Who owns this touchpoint? What does the customer expect here? And how do we know whether we’re delivering it? Most distribution leaders can’t answer the third question with data at more than half the steps. That gap is the whole problem.

A value stream needs shared visibility. Everyone must see the same customer, the same feedback, the same metric, at the same time. The credit manager needs to see that the account they just put on hold is one your top rep has been nurturing for two years. The warehouse needs to see that the line they shorted last week is the reason a customer rated delivery a two. When the data sits in silos, nobody owns the seams, and the seams are where you lose customers.

How the Cross-Functional Team Operates

A cross-functional team lives or dies on how it’s run. I won’t tell you what your org chart should look like, because a single-branch distributor and a national platform don’t share one. The mechanics, though, travel everywhere. Five rules separate a committee that meets from a team that moves.

Pick the lead by leverage, not title. The person who can move the problem the most runs the team, whether that’s the credit manager, the ops lead, or a service supervisor. When the problem changes, the lead changes.

Charter it around the value stream, not a department. The mandate is the customer’s path through the issue, start to finish. The lead doesn’t fix their own piece and hand it off. They carry the fix across every department it touches.

Put everyone on one scoreboard. While the team is working, every member is measured on the customer outcome, not their own departmental number. Drop that rule and the credit manager goes right back to protecting days sales outstanding (DSO).

Give it decision rights and a clock. The team meets on a fixed cadence, makes calls that cross department lines, and escalates the minute it hits a wall it can’t clear. A team that needs permission for every cross-functional move die of slowness.

Disband it when the seam is fixed. Then stand up the next one around the next problem. The capability is permanent. Any single team is temporary.

Get those five right and you stop coordinating departments. You start moving as one company toward the customer.

How Technology Enables Cross-Functional customer experience (CX) Management

This is where good intentions die for a practical reason: you can’t shepherd a problem across eight or nine departments if you can’t see the customer in one place. Spreadsheets, an annual survey, and a gut feel won’t get you there. You need a dedicated customer experience platform built to do the cross-functional work, not just collect feedback.

A platform earns its place when it does three things your spreadsheets can’t. It centralizes feedback so every department reads from the same source instead of trading anecdotes. It surfaces the ownership gaps, the touchpoints where the customer is struggling and no one’s accountable. And it shows you how much each capability matters to the customer, not only how you score on it, so you invest where it moves the relationship instead of where it’s easy.

That’s the design philosophy behind Customer Experience RX, the platform we built at DSG specifically for distributors. It puts importance and performance side by side on every capability, benchmarks you against other distributors, and lets you slice feedback by segment, geography, and job function in one portal every department can open. One distributor used it to target the improvements that mattered most to their customers and moved their Net Promoter Score from 57 to 70 in a single year.

What matters is what the tool makes possible: one version of the truth is that finance, sales, service, and operations all trust enough to act on together. A platform won’t fix your customer experience. It gives your leadership team the shared visibility and accountability to fix it themselves.

The Leadership Takeaway

Customer experience is the main differentiator left in distribution. Product lines converge, prices get matched, and the company that wins is the one the customer trusts to get it right across the whole relationship. That’s a leadership problem before it’s a software problem.

What changes Monday morning:

Stop asking which department owns customer experience. Own it yourself, at the leadership level, and build the cross-functional team to carry it, led by whoever can impact the problem most and bring the other departments along. Map the value stream. Put one source of customer truth in front of all eight or nine stakeholders. Measure importance alongside performance so you invest in what customers value. Then do the unglamorous work of fixing the seams between departments, because that’s where your customers are quietly deciding whether to stay.

Your competitors are still arguing about whose fault the last lost account was. Get your teams looking at the same customer, and you’ll stop having that argument. That’s the game.

The post Customer Experience Is Everybody’s Job appeared first on Distribution Strategy Group.

W.W. Grainger is embedding artificial intelligence across customer service, finance, warehouse operations, and ecommerce as the company expands AI from isolated applications into core business infrastructure, chairman and CEO DG. Macpherson told analysts during the company’s recent first-quarter earnings call.

Macpherson said Grainger’s AI deployments now fall into two primary categories: internal productivity and customer-facing digital capabilities.

On the operational side, the company is using AI tools to support customer service agents, automate finance and back-office workflows and improve supply chain execution inside distribution centers. Macpherson said Grainger is also applying AI to drive more “one-piece flow” within warehouse operations, an approach designed to improve throughput and operational efficiency.

The second category focuses on ecommerce and customer experience. Macpherson said AI-powered search and merchandising enhancements are becoming increasingly important to Grainger’s long-term competitive position.

“It is pervasive and will be even more so,” Macpherson said. “Pointing at the right things to create advantage, in addition to driving productivity, is really important.”

Macpherson also pointed to AI initiatives at Zoro, Grainger’s endless-assortment ecommerce business, which reported 18.7% daily sales growth in the first quarter.

He said the Zoro team has focused on improving customer acquisition quality and increasing repeat purchases, with AI-enabled website improvements expected to drive additional margin expansion and revenue growth over time. Macpherson said those enhancements were not yet fully reflected in first-quarter financial results but are expected to contribute more materially as deployment expands.

The AI discussion came during a strong earnings quarter for Grainger. Grainger reported higher first quarter sales and earnings as growth in its North American operations and digital businesses offset continued tariff and geopolitical uncertainty.

The Chicago-based distributor said first quarter sales increased 10.1% year over year to $4.74 billion, up from $4.31 billion in the same period last year. Net earnings attributable to the company rose 15.9% to $555 million from $479 million a year earlier.

Operating earnings increased 18.0% to $793 million from $672 million in the prior-year quarter, while gross profit rose 10.9% to $1.90 billion from $1.71 billion.

Jonny LeRoy, Grainger senior vice president and chief technology officer, will deliver the closing keynote on June 25 from 11:15 to noon at Distribution Strategy Group’s Applied AI for Distributors conference

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The post Grainger Embeds AI Across Warehouse Operations, Customer Service and Ecommerce appeared first on Distribution Strategy Group.

Global Industrial Co. reported higher first quarter sales and profit as growth in strategic accounts, ecommerce and Canada helped offset rising transportation and fuel costs.

The Port Washington, New York based distributor said first quarter sales increased 9.2% to $350.4 million from $321.0 million a year earlier. Net income from continuing operations rose 13.3% to $15.3 million from $13.5 million.

Operating income increased 13.2% to $20.6 million from $18.2 million. Operating margin improved to 5.9% from 5.7%, while gross margin was flat at 34.8% compared with 34.9% a year earlier.

“We delivered a strong start to 2026 as we benefited from solid execution and continued momentum across the business,” CEO Anesa Chaibi said during the company’s earnings call. “We generated growth each month during the period and have seen this top-line momentum carry into the second quarter.”

Chaibi said results were driven by both price increases and volume gains, particularly among large strategic accounts and ecommerce customers. Canada revenue increased 24.4% in local currency, marking the third consecutive quarter of double-digit growth.

The company said it continues reorganizing sales and merchandising teams around customer verticals to deepen specialization and improve account penetration.

“Our sales realignment into customer verticals is progressing well, allowing us to better meet our customers’ needs through deeper specialization and tailored experiences,” Chaibi said.

Global Industrial also said it is expanding e-procurement and integrated ecommerce capabilities as more customers shift purchasing into digital procurement systems.

“We are also continuing to expand our e-procurement and integrated ecommerce capabilities, which are helping us to deepen relationships, improve retention, and position us to capture greater share of wallet over time,” Chaibi said.

Executives pointed out maintenance, repair and operations, or MRO, products, and consumables, as a growing opportunity for expanding customer spending.

“It is MRO. It’s natural adjacent categories for what we do,” Chaibi told analysts. “We’re not going to go too far afield and beyond what our core business is.”

Chief financial officer Tex Clark said the company expects revenue growth in the second quarter to remain in the mid to high single digits, though fuel surcharges and transportation costs are expected to pressure margins in coming months.

“We continue to closely monitor the macroeconomic and geopolitical environment, including developments in the Middle East and their impact on transportation and manufacturing costs, as well as the evolving tariff landscape,” Clark said.

Executives also said the company has adopted more dynamic pricing systems to respond faster to tariff and cost changes.

“What we have inherently in the business now is initiative-taking pricing,” Chaibi said. “We are watching real time and reacting dynamically from a margin perspective.”

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So, if they know, why haven’t they changed it? In many cases, the problem isn’t quite painful enough to force a different approach.

It’s just like the old story of a hound dog lying on a porch, whining. A neighbor asks what’s wrong. The owner says, “He’s lying on a nail.”

The neighbor looks puzzled. “Why doesn’t he get up?”

The owner thinks for a moment. “Doesn’t hurt enough yet.”

That’s where many sales teams are.

Reps are over-concentrated on the same top accounts. Remote tools that briefly expanded their reach during the pandemic have been abandoned by many. Some, but not enough, distributors have grown their inside teams to touch more customers more frequently.

The coverage model is still too narrow to capture competitors’ Critical Selling Events (CSEs), a disruption outside the rep’s control that makes a customer look for an alternative.

That matters more than most distributors realize. 90% of customers don’t change suppliers each year. The remaining share—the small percentage of business that moves—is always tied to a disruption.

Which means growth doesn’t come from calling on the same loyal accounts more often. It comes from being there when something changes. And most distributors, as they’re currently structured, aren’t.

The Comfortable Route

Field sales in distribution have always been self-directed. Reps decide where they go, who they see and how they spend their time. Over years, this freedom settles into predictable patterns, familiar faces, and reliable rhythms.

This is route mentality. And it works until it starts limiting what you can see. The same accounts get the most attention, not because they always need it, but because they are responsive, good for a fun conversation and unlikely to make the day difficult.

The pandemic broke that pattern. Reps who couldn’t make in-person visits adapted quickly. Remote engagement turned out to be surprisingly effective at expanding coverage. Reps were reaching more accounts, more often, with less windshield time. It wasn’t the plan, but it worked.

Then travel returned, and so did the routes, as if the past two years had been a temporary inconvenience rather than a working experiment.

In our research conducted with the Heating, Air Conditioning, & Refrigeration Distributors International (HARDI), more than half of distributors reported little to no focus on remote engagement after the pandemic ended. The tools were still there, but the habits had fallen away.

Why Nothing Changes

The gap between knowing and changing has structural causes.

Commission-based compensation is one of them. When a handful of top accounts represent a sizable portion of a rep’s income, protecting those relationships is a financial necessity. Time spent broadening coverage on accounts that don’t currently generate commission feels risky because it doesn’t directly pay the bills.

Sales management is another. Most sales managers came up as closers. They know how to win a deal. They’re less practiced at coaching reps on how to allocate time across a territory, or how to think probabilistically about where growth is most likely to emerge. Pipeline reviews tend to focus on specific opportunities, not on whether time is being invested in the right places across the full account base.

And then there’s the planning gap. In our research, fewer than 1 in 3 distributors reported doing any structured call budgeting — deciding in advance how selling time will be distributed across accounts. Most are logging into what already happened, not planning where time should go next. Useful for accountability, but it doesn’t change behavior.

What Moves Share

The deeper issue is a set of assumptions about how growth happens, and the data consistently challenges. Deliberate persuasion — a rep convincing a customer to switch suppliers — accounts for only about 2% of spend changes in any given year. Most share shifts come from something else: disruption events that cause customers to reconsider their options, not because a rep sold them on it, but because something happened. A supplier failed them. A key contact left. A new requirement forced a reassessment.

These moments are not predictable. They’re distributed across the customer base throughout the year. The best distributor positioned to capture them isn’t necessarily the one with the best pitch. It’s the one whose rep is already in the customer’s awareness when the moment arrives.

That’s a coverage problem. And coverage is a time allocation problem. The market’s share-shifting moments don’t wait for a rep to show up after months of absence. They resolve quickly, often within days, with whoever happens to be top of mind.

Getting Off the Nail

A few concrete shifts move the needle without a full organizational overhaul:

• Helping reps budget their selling time in advance across their full account base, not just their top accounts.
• Using remote touchpoints deliberately for mid-tier accounts, rather than treating in-person visits as the only legitimate engagement
• Building a management cadence on how time is being distributed across the market, not just what deals are in the pipeline.
• Revisiting compensation structures that inadvertently punish broad coverage by tying income entirely to the largest existing accounts

The distributors who move first on this won’t see the results in next quarter’s report. Market share in a mature industry shifts slowly. The effects grow over years, not months.

That’s partly why the nail doesn’t hurt enough — the cost of inaction is real but deferred, while the discomfort of change is immediate. But the nail is there. And it’s not getting more comfortable.

The post Sales Coverage Isn’t Working. It Just Doesn’t Hurt Enough to Fix appeared first on Distribution Strategy Group.

In a situation like this, it’s easy to recognize value.

But when you’re caught up in the day-to-day of growing a business, it’s hard not to focus on holding onto every customer, even when some add more weight than value. Many distributors focus on preventing customer turnover without asking a more important question: Which customers create profit?

When it comes to preventing customer turnover, focus on two things. First, recognize when customers enter the “at-risk” zone — changing their behavior in ways that show up in order size, frequency, or engagement. Second, and more importantly, identify which of those customers belong on your profitability A-list.

Not All Customers Are Created Equal

When segmenting your customers, your “A” customers are not necessarily your biggest ones. They may buy a lot on a regular basis, but if they require significant resources to support, those larger accounts may belong in the B or C tier in terms of profit generated.

If you don’t distinguish between customer size and customer profitability, you may find your team stressing out over the wrong accounts. The priority should be high-risk “A” customers that drive disproportionate profit and may be on the verge of defecting. When they do, the impact won’t be linear. It will be outsized. You’ll lose their revenue and margin contribution.

You’ll also lose operating leverage as you scramble to make up the difference. Order velocity will slow. And looking ahead, it doesn’t take many high-value defections to materially impact your valuation multiple when it’s time to exit.

Unfortunately, many distributors struggle to identify these high-value customers at risk of leaving until it’s too late. That’s because they’re not taking a close enough look at customer profitability at the order level.

The Value of Visibility

As a distributor, if you don’t have full visibility into how profitable your customers’ orders really are, your most valuable customers can look just like everyone else until it’s too late. For most distributors, we’ve found that up to 35% of all orders contain profit leaks. Without a way to identify those defects, they’re flying blind. They’ve got thousands of customers and no way to properly prioritize them. They’re often relying on their ERP to surface the necessary insights, even though ERP is a system of record, not intelligence.

If you and your team are constantly putting out fires, it’s a sign you need better visibility and a practical framework for acting on what you see to retain your most valuable customers.

The good news is that this problem is solvable if you put the right structure in place:

1. Take a closer look at your orders. Orders are the atomic unit of value, and they tell the story of a customer’s profitability in real time. The problem is that they get aggregated into monthly financial reports, where the story gets lost in the big picture. Invest in a way to surface that data and then commit to using it in your day-to-day workflows.

2. Leverage order-level visibility to segment customers by value. Once you have a grasp of which customers are most profitable, segment them into A-, B-, C-, and D-level customers. You may be surprised to find some of your biggest accounts on the lower-level lists.

3. Identify behavior changes, not just inactivity. Customers who buy annually can trigger false alarms, while returns can artificially reset the clock on customer contact. Instead of worrying about how long it’s been since you heard from an A-list customer, look at their usual cadence and determine if they’ve made any changes worth worrying about.

4. Keep risk buckets simple. You don’t need a dozen gradients. Just sort by low, medium, and high risk. Cross-reference these buckets with your value-based segments, and you’ll have a neat list of the customers you need to focus on.

5. Encourage value-based discipline. The above steps are not a one-time solution. A low-risk customer can become high-risk quickly, and if you wait for a monthly report, you’ll fall behind the curve. Implement clear rules for resolving your high-risk “A” customers. And don’t remove a customer from that high-risk bucket until their behavior has returned to normal.

When you know which customers to prioritize, you move from a reactive position to a proactive one, protecting profit rather than scrambling to maintain the status quo. And that opens the door to what I consider to be the biggest benefit of all.

More Profit Means More Freedom

Protecting high-value accounts is profit discipline, a risk management strategy, and a valuation booster, all in one. And all those things add up to more freedom for an owner.

When I talk to leaders, that’s the word I hear the most. They want the freedom to invest in their business and their people. They want the freedom to execute their vision and finish what they started. They’re not just trying to make money. They’re trying to build something great and leave a legacy. Without a strong profit engine, companies are vulnerable to external shocks and unlikely to command significant multiples from prospective buyers.

The path to real freedom starts when you ask the right questions. Rather than asking about revenue and turnover rates, ask:

• Are we focusing on the customers that really matter?
• Which of them are starting to drift?
• And can you catch them drifting before it hits the P&L?

Customer turnover is inevitable. You can’t send out an S.O.S. every time someone threatens to jump ship. Save it for your most profitable customers because those are the ones that hurt the most, especially if you didn’t see it coming.

The post The Only Customer Turnover That Really Matters appeared first on Distribution Strategy Group.

Capstone Holding Corp., a distributor of stone veneer, hardscape materials and modular masonry systems, reported $46.9 million in full-year 2025 revenue and projected $72.1 million in 2026, citing a full year of contributions from two acquisitions completed in the second half of last year.

The New York-based company closed 2025 with a gross margin of 23%, up from 21.4% the prior year, and expects that figure to reach 26% in 2026. Operating profit, which totaled $0.9 million in 2025, is projected to reach $3.8 million this year. Capstone expects to make a profit on an ongoing basis beginning in the second quarter.

The revenue and margin gains were driven primarily by two acquisitions that added approximately $26 million in combined annual revenue and expanded Capstone from a single-location operation to a nine-location platform covering 38 U.S. states and Canada. Carolina Stone Products closed in August 2025, contributing approximately $11 million in annual revenue and establishing Capstone’s first presence in the Southeast. Canadian Stone Industries closed in December 2025, adding $15 million in annual revenue and extending the company’s reach into Canada.

“It was a transformational year for Capstone,” said Matthew Lipman, chief executive officer. “Synergies from our recent acquisitions are enabling margin growth and operating leverage across the platform. With a full year of contributions from these assets, along with our product and geographic expansion, we expect 2026 to deliver a sharp increase in both revenue and profitability.”

Capstone also identified approximately $480,000 in annual cost savings from facility consolidation, with additional savings expected from logistics and inventory improvements. The company distributes through its Instone platform, which uses a digital inventory system to manage and deliver stone products across its network.

A recently awarded distribution agreement for Eldorado Stone, a premium manufactured stone veneer brand from Westlake Royal Building Products, is expected to contribute $5 million in annual revenue by the third quarter of 2027.

Capstone has set a longer-term target of $100 million in annual revenue and outlined a path to 10% operating profit margins through organic growth, cost leverage, and additional acquisitions. The gap between its 2026 revenue projection of $72.1 million and that $100 million target suggests the company’s acquisition pace is unlikely to slow.

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