Determining what your customers want is the foundation for an extraordinary customer experience. If you know which products and services buyers find most valuable – and those they could do without – you can adjust your core capabilities, align your resources to deliver them and position yourself as their top distributor.  

Take these five steps to determine what your customers want:  

1. Conduct qualitative research – both internally and externally. 

Determining what customers want should begin with internal and external qualitative research. One of the best ways to get a pulse on what is happening within your organization and find opportunities for improvement is by spending time with salespeople. They interact with your customers every day and will better understand where you’re succeeding and where you need to make improvements.  

Customer interviews and focus groups can also be powerful tools. Talk directly with customers and prospects to see how they perceive your company. What are their initial impressions? What would they change if they had the chance? If multiple customers have the same feedback, it may be time to take a deeper look at your organization and make adjustments.  

2. Identify the core capabilities and services your customers value with quantitative surveys. 

Quantitative research is data-driven and typically includes customer surveys and performance analytics.  

If you want to know how your customers feel about your services, ask them in a survey. We also recommend integrating Net Promoter Score (NPS) into your ongoing feedback mechanisms, a macro performance indicator. Some distributors track satisfaction with a quick NPS survey each month, while others only survey once per year. 

Here is some more information on both:  

Net Promoter Score  

Your Net Promoter Score is based on how many people would actively recommend your business to their friends and colleagues. The simple survey asks: “On a scale of 1 to 10, how likely are you to recommend us?” Those who respond with 0-6 are detractors and will likely go elsewhere if they find better offers. Those who respond with 7-8 are passives and generally have a take-it-or-leave-it attitude. Customers who respond at the higher end of this scale, at 9-10, are considered promoters and are generally the most loyal and profitable customers.  

The higher the NPS, the more engaged customers are with your brand. The more engaged buyers are, the more opportunities you have to grow wallet share and profitability.  

Surveys  

When sending a survey to customers, remember to set a clear objective, ask tough questions, segment respondents and keep surveys short. Customers should not have to spend more than eight to 10 minutes completing your survey. Be sure to ask about the importance of your services to your customers and how well you perform them, both micro-performance indicators. Identifying which services and capabilities are most important to customers and comparing those answers with how well you are performing in each category will give you an idea of how well you are meeting customer expectations.  

Read more about best practices in setting up surveys for your customers: B2B Customer Surveys: How to Get Actionable Feedback from Customers. 

3. Determine how often and through what channels your customers want to hear from you. 

Most distributors find that their customers want to hear from them more often than they expect digitally – and less often in person. Customers tend to be more engaged and prefer more frequent communication from distributors that excel at providing relevant, helpful information, whether that’s online or off.  

Among DSG end-user survey respondents, we found that customers prefer the following mediums and frequency:  

• Email – Weekly  
• Print Flyer – Monthly  
• Print Catalog – Annually  
• Video Call – Quarterly  
• Phone Call – Monthly  
• Sales Rep Visit – Monthly  

Get more details on what customers want, based on our ongoing survey of more than 17,000 end-users. Download The State of Distributor Customer Experience: What Customers Want for the full results. 

4. Profile your customers. 

Another way to understand what your customers want is to profile them and then segment them accordingly. Customer profiles, or personas, combine the customer’s attributes, such as what kind of buyer they are, how big they are, purchasing patterns, the segment they’re in and so on. 

We can use the customer profiling process to understand how different types of customers behave and what they value most. 

Methods include: 

• Recency Frequency Monetary (RFM) Lifecycle: Measuring how often, how recently and the value of their purchases. 
• Segmentation: For example, understanding the differences between your most profitable customers and those in the bottom percentile will help you identify opportunities to find more of the former. Another way to segment is by firmographic variables. Even something as simple as Year of Founding may affect customer behavior. You may also look at size and NAICS/SIC segments.  
• Sweet Spot: Identify who your best customers are – and then profile them. Look at purchasing behavior over time, patterns, transaction volume, what they purchase and others. Then, look at patterns among customers. Your best customers are your sweet spot, and this will become a critical component of your prospect targeting. 

5. Map your value. 

You have probably heard the old saying, “Jack of all trades, master of none,” but how often do you apply it to your business? Trying to be everything to everyone makes it difficult to do anything very well. Instead of outperforming competitors on every core offering, take the time to determine what is most important to your customers.  

There are three parts to a value proposition:  

• Differentiated Attributes: What does the company do that differentiates it from its competitors?  
• Important Attributes: What is important to customers and the market?  
• Unclaimed Attributes: Which attributes are largely unclaimed by your competitors?  

The ideal position is the center of these three attributes, where you have differentiated products and services that are important to customers and unclaimed by competitors.  

Learn more about creating an effective value proposition: 

The post 5 Ways to Uncover What Your Customers Really Want appeared first on Distribution Strategy Group.

But B2B is a far more complex market. Some companies are rising to the challenge and are developing solutions designed for industrial distributors and contractors to help them save time, boost productivity and cut expenses.

We recently spoke with two companies that designed solutions to aid in deliveries, improve technician education and connect contractors with local brick-and-mortar suppliers. Their app solutions are solving previously overlooked industry needs.

Educating and Connecting Technicians

Bluon is a platform built to support HVAC professionals. The app houses a database of 300,000 unique models of HVAC equipment with original manuals and part lists. The app also connects its members to live support – provided by Bluon’s veteran technicians – to assist with diagnosing and repairing problems. Soon this will connect them directly to their local supply houses. Chairman and CEO Peter Capuciati says the Bluon app has more than 100,000 active users, and has grown mainly by word of mouth among technicians.

Capuciati says there is currently a 100,000-technician shortage in HVAC. Bluon helps alleviate the burden by helping technicians be more productive, saving on average two hours a day. This extra time means they can perform more jobs, help more customers and buy more parts and equipment. Capuciati says this is a win-win for everyone – technicians, contractors, distributors and manufacturers.

While Bluon focuses on supporting HVAC service technicians, they are developing a new way for contractors to connect with local distributors. Starting in June 2022, techs will be able to find and purchase parts from their preferred local suppliers directly through the app. In addition, the platform will soon give recommendations as they shop to ensure techs have all the parts needed to complete the job.

Capuciati says part suggestions are curated by Bluon’s in-house technician team, who are all industry experts. He believes this feature will help technicians avoid last-minute supply runs while also facilitating upsell and cross-sell opportunities for local distributors. They are focusing exclusively on local, brick-and-mortar distributors to preserve and enhance the relationships between technicians and their local suppliers.

Distributors can access Bluon’s extensive database through the BluonLive Web App. With access to the company’s informational and cross-reference database and curated product pairings, distributor sales reps will have the tools to be more consultative and make more informed sales. Capuciati says the mobile app will also be the perfect platform for manufacturers and suppliers to showcase new products. Because so many HVAC technicians already use the mobile app on a regular basis, local distributors will have direct access to their target demographic when it matters most.

Enabling Last-Mile Delivery

Curri offers logistics and delivery support for industrial distributors and contractors. 

Their mobile app allows users to easily request one-time last-minute deliveries or schedule recurring shipments with the vehicle of their choice. For example, if a contractor realizes they don’t have a necessary component for their project, they can place an order through their distributor and receive the shipment the same day, CEO Matthew Lafferty says. Because of the elasticity of Curri’s fleet, distributors can quickly send loads of any size to their customers.

Lafferty says the platform enables distributors to provide a better experience to their customers. Customers know they can rely on distributors to deliver what they need when they need it, even on short notice – which is often impossible for distributors with static fleets. As a bonus, distributors can take advantage of Curri’s fast shipments and flexible load options to compete against online marketplaces like Amazon.

With Curri, distributors don’t have to worry about buying trucks, hiring drivers or paying for insurance.

Although their customer base consists primarily of distributors (90%), Lafferty says Curri is also helping contractors cut costs and improve operations. He says that owner-operators can lose up to a month of revenue on yearly supply runs. With Curri, contractors can save time and labor by outsourcing pickups and deliveries. Curri aims to pass along these savings, so contractors can better utilize their time and take care of their families.

The Role of Apps in Supporting the Customer Journey

Apps like Bluon and Curri help distributors deliver a better customer experience. Technologies like item recognition, 3D printing, artificial intelligence (AI), drones, voice ordering, collaborative robots and blockchain payments enable distributors to serve their customers more effectively, ensuring their customers have the support they need.

Learn more about new technology and how distributors can differentiate their value proposition in the State of Distributor Technology: A Guide for Growth.

The post B2B Apps Are Changing the Way Distributors and Contractors Operate appeared first on Distribution Strategy Group.

In this webinar, Distribution Strategy Group shared how best-in-class distributors deliver seamless customer experiences no matter where their customers shop and buy. 

We identified, explored and explained best practices in omnichannel and what it means for various distributor business models, including sales and branch-driven, distribution center-based and pure digital. 

Watch now, on-demand to learn how to:

• Harmonize customer experiences across channels
• Define omnichannel capability requirements by channel
• Integrate data and customer touchpoints to build new capabilities
• Use customer interaction and account data to provide superior insights to the distributor and provide greater relevance to buyers

Watch now, on-demand >

The post Webinar: True Omnichannel: Digital, Sales, Branches & Phones – Part 1 (March 9, 2022) appeared first on Distribution Strategy Group.

In the second of two webinars on the State of eCommerce in Distribution we share how your distributor peers are planning to enhance and augment their ecommerce capabilities over the next three years – and how you can differentiate by keeping customer experience front and center.

You’ll learn:

• Why customer experience must be the center of everything you do online
• Next-step technologies and their states of adoption among distributors
• How distributors are differentiating online vs. pure ecommerce players and marketplaces
• Digital excellence requirements through 2025: Core functionality, UX and customer journey
• The importance of a capability roadmap

Watch now, on-demand >

The post Webinar: State of eCommerce in Distribution, Part 2 (February 23, 2022) appeared first on Distribution Strategy Group.

Have distributors continued to adopt ecommerce at a rapid pace? How are they integrating digital channels into their go-to-market approach?

Find out in the first of two webinars for the results of our exclusive 12th-annual State of eCommerce in Distribution research, a leading benchmark in the industry for adoption and drivers of ecommerce.

You’ll learn:

• The proportion of sales from digital channels across multiple distribution verticals
• Evolving expectations from distribution customers
• What distributors need to meet customer demands
• Technology best practices: ERP, CMS, PIM, CRM, etc. to meet those needs
• How digital capabilities are supporting performance of other channels

Watch now, on-demand >

The post Webinar: The 2022 State of eCommerce in Distribution, Part 1 (February 2, 2022) appeared first on Distribution Strategy Group.

eCommerce includes transactions through website, mobile and app but excludes EDI, punchout, email, fax and so on.

As we prepare to unveil the results of our 12^th-annual survey, the 2022 State of eCommerce in Distribution, we’re finding that not only have adoption rates continued to rise, but maturity rates have spiked in 2022. Maturity is measured by the percent of a distributor’s revenue that goes through ecommerce.

• Nascent: Greater than 0%, less than or equal to 5% of revenue
• Development: Greater than 5%, less than or equal to 10% of revenue
• Mature: Greater than 10%, less than or equal to 20% of revenue
• Leader: Greater than 20% of revenue

Ideally, the time you spend in the nascent state of ecommerce maturity is short and sweet. The percentage of respondents with ecommerce still in the nascent phase of maturity fell from 32% to 22% in this latest survey (2021 vs. 2022). That’s a good sign.

In this latest survey, we also saw a massive drive to maturity.

Register now to access part one of our 2022 State of eCommerce in Distribution webinar series.

Sixty-three percent of respondents with ecommerce have more than 10% of their revenue coming from ecommerce. That represents a significant 19% increase in the number of distributors that fall into the mature and leader stages of ecommerce. Thirty-seven percent reported greater than 20% of their revenue comes from ecommerce, which is a 16% increase in distributors that fall into the leader category.

By maturity, 43% of respondents in the hardware segment reported greater than 20% of their revenue would come from ecommerce in 2022; HVACR was next at 39% of respondents. About 36% of respondents in JanSan, a segment leader in ecommerce adoption, reported greater than 20% of their revenue from ecommerce.

The pandemic accelerated the maturing of ecommerce offerings. But what’s fueling the ongoing growth is a focus on providing a better customer experience online. Seventy-one percent of survey respondents placed customer experience as their top or second priority for their ecommerce investments.

That seems to be paying off in the form of more revenue from their ecommerce channel.

To increase the speed by which you move out of the nascent and development stages – and build the customer experience B2B buyers want – distributors must:

• Ensure their foundation is solid, including an analytical customer profile and lifecycle analysis; understanding how their customers want to shop and buy; and establishing a clear value proposition. 
• Create a solid SEO strategy and plan that also includes local SEO.
• Develop a demand-generation strategy, including inbound and outbound components.
• Continually test and measure activities to optimize performance and conversion.
• Provide personalization capabilities. For example, customer-specific pricing is critical. Without it, your ecommerce won’t get off the ground. Consider landing pages or other content to address key customer segments.
• Modify key product content where possible to increase the chance of being found in search engines.
• Improve the user experience by looking at persona journeys, improving Core Web Vitals and optimizing conversions.
• Integrate with other channels. A solid ecommerce initiative provides key information that supports an omnichannel customer experience.
• Add marketing automation to put email communication on steroids by allowing automated campaigns, giving different messages to users depending on their behavior.

In part one of our webinar, we’ll dig into these results and what they mean for you. Register now.

The post Better Customer Experience? Distributors Lean Into eCommerce in 2022 appeared first on Distribution Strategy Group.

A growing number of end-users want purchasing options beyond the traditional distributor. That means for some sectors, revenue through traditional distribution will significantly decrease as customers’ buying behavior continues to shift. 

Based on Distribution Strategy Group research, manufacturers predict a 1270 basis points drop in the share of sales they expect to get from distributors in the next five years, as published in “Channel Transformation from Supplier to Customer,” our recent National Association of Wholesaler-Distributors (NAW) report. From the distributor standpoint, that is a 20% drop. 

Even as manufacturers forecast sales through traditional distributor channels to decrease over the next five years, they expect to see sales increase in retail channels, and with direct-to-end customers, third-party marketplaces and purely digital distributors. When asked what is driving their companies’ channel shift, manufacturers cited: 

• Improving ease of buying for customers 
• Fewer end-users purchasing from distributors and spending more online due to quick shipping and availability of vast purchase information  
• Traditional distributors not making necessary digital investments to meet expectations of “digital-native” buyers 

For these reasons, having robust digital capabilities is no longer optional for distributors who want to retain channel share as a distributor’s lack of strong online presence is by far the most important concern held by manufacturers. 

We asked manufacturers what distributors could do to differentiate themselves from the competition and solidify their channel partnerships. An overwhelming 96% of respondents said it would help to improve customer-facing employees’ understanding of their products. Other top recommendations included:  

• Improve digital capabilities  
• Improve marketing capabilities  
• Sell a broader portion of the manufacturer’s product portfolio 
• Carry more inventory and rely less on direct shipments 
• Reduce the number of competing lines they carry 

How can distributors offer value beyond logistics to ensure long-term survival?  

As manufacturers continue to evolve distribution strategies to reach end-users, it’s clear traditional distributors must rethink their approach. Every year, business is won or lost based on the experience you deliver to the customer and your channel partners.  

Protect your business from disruption by:  

Simplifying online transactions. Make your company easy to do business with. Ensure your technology stack supports a positive online experience and is flexible to meet the demands of your end-user. Make it as easy as possible for your customers to access information, find products online and navigate your website. This is especially important on those products that don’t require a value-add or have logistical complexity and are thus more vulnerable to channel shift. 

Differentiating value-added services. Understanding and monetizing value-added services is critical to the future of the traditional distributor. Offer value-added services for an omnichannel approach that includes logistics services like kitting, labeling and asset tracking, information services like safety consulting, technical support and financing alternatives, and value-added processing such as product modifications, repairs and software setup. 

Embracing digital transformation. Distributors need to take bold action and create an omnichannel strategy in line with their customers’ purchasing journey. Increase digital marketing and extend awareness of manufacturer offers and promotions. Help manufacturers gain share with prospects and new buyers. Upskill your teams to sell solutions, not just products. And prioritize online and offline customer experiences. 

Implementing multiple technologies for touchless ordering. Touchless ordering through email order automation, EDI and punchout decreases the time and cost for the transaction and increases profit for the distributor. Set a goal to increase the percentage of orders you can automate or process without human intervention. Over a two- to three-year period, you’ll experience significant cost savings if you can move that number to 50%.  

For more on manufacturers’ plans for distribution and other sales channels, read our report, The State of Manufacturer Sales Channels. 

The post Distributors Must Go Beyond ‘Price and Availability’ to Remain Relevant to Manufacturers appeared first on Distribution Strategy Group.

While product data has seen major improvements in the past five to 10 years, a massive opportunity remains for the next five years. This opportunity is about making product data more usable, or consumable, for B2B buyers. In other words, it’s about the needs and shopping requirements of the customer.  

Download now: The Future of e-Business in B2B 

Many companies have a good amount of product data on their website. However, how it is organized and presented often falls far short of meeting customer needs, and the products aren’t discoverable.  

To be discoverable, the data must be optimized for search engines, as this is where a majority of B2B buyers begin their journey. Appropriate keywords need to be aggressively employed. Failing here usually means a buyer does not take the next step to shop and buy from a distributor’s site. 

Next, understanding how the customer searches is paramount. How will they ask the question to find what they need? Does the product data alone address what they need? In many cases, the answer is no. Assuming the buyer has made it to a distributor website, they need to be able to find the product. If they know the SKU number, it may be simple to find. Of course, if a SKU number is known, that also makes it easier for a buyer to purchase from another pure-digital seller, such as a marketplace. 

Often a shopper goes to a distributor website, enters a search term, and is presented with page after page of product options. That isn’t helpful. The quicker and easier it is for the customer to filter and find what they need, the better the customer experience. So, how can the customer experience improve? For this, proper product taxonomy and filtering is important.  

A new era of product information is contextual. Contextual information can be described as marketing information and/or conversion information as it can significantly increase revenue by improving the customer experience. 

Additionally, if a buyer doesn’t know the name or SKU of the product and needs assistance in configuration and/or selection, having appropriate and useful product selectors and configurators enhances the customer experience. This is a capability we see rapidly increasing in importance in the future. Companies that can provide these tools, whether it is manufacturer or distributor provided, make it easier for customers to find what they need and keep the business. 

After all this, what about conversion? The result everyone wants is a transaction, regardless of the method or channel that takes the order. Keeping the customer at the center is key to providing the information a customer needs to find a product, then transact. Websites will always play a critical role in assisting in the order process, which helps justify the digital channel. 

Where Product Data is Going 

So, how should distributors approach product data to increase the chances a shopping experience will lead to a transaction? Let’s look at where product data is going. 

First, it is critical to ensure the 4 Cs of product data (thanks to Hein for the framework) are met: 

• Clear 
• Complete 
• Correct 
• Consistent 

One major area of opportunity for improvement in product data is in personalization. Personalization uses customer information to assist in presenting the right information based on a buyer’s role or segment/sector they are in, attributes that are usually slow to change. Personalization is already important in the B2C world as our basic preferences don’t change much over time, and data can help predict what we like and need. 

Companies that will grow the quickest in the future are those that embrace contextualization. A B2B buyer’s behavior is generally dynamic in that they could be working on one project in the morning and another in the afternoon. That means the context of what they do is changing, so they require different products and solutions.  

Localization is also important to both personalization and contextualization. We’ve worked with distributors where customers call a part one thing in one part of the country and something else in another part of the country. Having that context is key when a customer searches. This is also information a distributor is uniquely qualified to provide as a manufacturer is not likely to refer to a part by multiple regional names. 

A marketing department can also be a resource for and provide contextual and conversion-related information that is solution- or locally oriented to differentiate product data.  

Such differentiation is crucial if you want to show up in Google and other search engines. If I search in Google and over 100 distributors have the same product data, how does Google know which to show first? Sure, Google applies algorithms based on the device used, location and Core Web Vitals scores. Outside of that, Google will generally use the site with the highest domain authority. For example, if the product is available on Amazon, that usually appears high in the search engine results page due to Amazon’s massive domain authority. Relevant contextual information helps a distributor differentiate products and leads to higher conversions. 

Here’s what to expect with product data in the future: 

• A move away from synchronous emails and Excel files for updates. The new process will be automated, streamlined, and more agile – such as syndication of data with manufacturers. Automated data feeds fix the problem of stagnant data that comes from updating data through an emailed Excel sheet, outdated by the time you receive it. 
• More detailed data. This includes a move from 20 fields of attributes to hundreds. 
• More data normalization (such as consistent measurements across manufacturers). 
• Distributors will use all data available from manufacturer, not just a subset. More will use services to analyze and bridge the gap between available and used data to make the data more useful to the customer. Data service providers will become a strategic partner. 
• The cost of data acquisition will fall over time. 

Learn more about what to expect in eBusiness in B2B in the future by downloading our whitepaper, The Future of eBusiness in B2B. 

The post Product Data is Critical if You Want to Compete in the Next 3-5 Years Online appeared first on Distribution Strategy Group.

Part 3 in the Reinvention of Distributor Sales and Service series

As digital channels grow in importance to the buyer, Customer Service Reps will do less order entry and other repeat tasks. That opens a big opportunity for CSRs to add more value, including providing technical support and supporting customer operations.

In the third part of our Reinvention of Distributor Sales and Service series you’ll learn best practices in implementing a new model for engaging with your customers, including:

• How technology supports an integrated sales model
• Key performance metrics for an integrated sales model
• Blending customer service and marketing contacts
• Key elements of implementation
• Selecting integrated sales team members
• An account planning roadmap

The sales function is extremely important for many distributors – and will remain so. This three-part series of webinars and research reports guides distributors on how they can build a stronger sales function, align it tightly with a more focused customer service capability and get a better return on their investments in these crucial roles.

Watch part one here > | Watch part two here >

The post Webinar: A New Sales Model for Distributors appeared first on Distribution Strategy Group.

Distributors need dedicated account managers to reach out to customers over the phone, not just a customer service department to answer the phone when a customer calls.

This is the second of three webinars on the Reinvention of Distributor Sales and Service. You’ll learn the value of and process for creating a team of professional account managers who work proactively over the phone. In this webinar, you’ll hear the compelling economic case for an integrated sales model, including:

• How an integrated sales model improves distributor lifecycle performance
• The typical obstacles preventing a distributor from adopting an integrated sales model
• Segmenting and grading customers
• How an integrated sales model improves your market and customer coverage
• Adjusting your coverage plan based upon customer worth
• The importance of account and territory planning

This webinar is part of a three-part series, in which we are guiding distributors to build a stronger sales function and align it more tightly with a more focused customer service capability. The result: a better return on their investments in these crucial roles.

Watch part 1 here >

The post Webinar: The Reinvention of Distributor Sales & Service appeared first on Distribution Strategy Group.