In the latest edition of its highly influential series, Facing the Forces of Change, The National Association of Wholesaler-Distributors (NAW) discusses many of the disruptions facing those in the Wholesale and Distribution industries. In a prior post, we took a macro-level view of the whole study. Here, we will look at the importance of leveraging relationships. Ultimately, managing relationships means understanding your company’s value, meeting the needs and expectations of your customers and suppliers, and differentiating yourself from the competition.
What It Is: When customers, suppliers, or prospects hear your company’s name, what pops into their mind? Is this how you want to be seen? The company’s value proposition (what it offers to customers and suppliers) should be readily communicated in a 30-second elevator pitch designed to convey your value and what sets you apart from the competition.
What You Can Do: Invest time and energy to develop a compelling value proposition that defines your business: who you are, what you do, who your target customers are, why they should buy from you as opposed to competitors. Actively communicate this branding message to your market.
Ask Yourself: Are we using social media and blogs to create awareness of our company and provide information on topics of interest in our industry? If a potential customer was searching for products and services we provide, how likely would it be able to find and consider us?
Distributors As Service Providers
What It Is: In today’s fast-paced, technologically-integrated business world, customers and suppliers increasingly expect more from their wholesale distribution partners. Becoming a service provider, as opposed to only an aggregator and supplier of products, is a great way to differentiate yourself from your competition.
What You Can Do: Quantify your value by looking internally at what you do efficiently and what activities are valuable to your business. Then, look outside and measure the importance to customers and suppliers as well as the level of differentiation from your competitors.
Ask Yourself: What knowledge and information do we have that our customers and suppliers do not and that would be valuable to them? Are there functions that our customers and suppliers need that we can perform more efficiently than they do? Can we provide this to them?
What It Is: Conventional wisdom has long held that relationships constitute the bedrock of sales. Have a good relationship, and the sales will follow. However, although relationships still play an important role, they have been increasingly decoupled from the ultimate purchase decision. Amazon is probably the most obvious example of purchasers choosing value over relationships.
What You Can Do: Remind your customers and suppliers of your value. Regularly communicate to them what you are providing. Use your relationships to understand your customers’ deepest needs and figure out ways to meet those needs in ways that competitors cannot.
Ask Yourself: How often do we communicate our value to our customers? Have we lost any long-tenured customers recently? Do we know who we lost them to and why? Are we properly balancing the value of any services we provide, with the price that the customer is willing to pay?
Successfully managing your relationships in today’s turbulent marketplace is crucial to continued success. It starts with knowing exactly who and what your business is, and communicating that branding message to your market.
If you have any additional questions or would like to discuss the Facing the Forces of Change: Leveraging Relationships in Wholesale/Distribution more in depth, please contact a Barnes Dennig Representative here.