Distributors have been long seen as the intermediary between the supplier and the customer, offering lower prices through volume purchasing models. With ongoing changes in the market, there have been four main disruptive forces that distributors have been tackling, namely:
- Shifting of customer demand
- New business models
None of these act in isolation of each other and in many ways act upon each other. In response to these, many businesses have altered their operating models by adding more value-added services; namely:
- Engineering solutions by offering industry or market expertise through brokering the right solution between brands, balancing cost and functionality for the customer
- Owning logistics in order to control on-time delivery for critical industries
- Offering implementation and installation services by dispatching technicians for both installation and repair driving to first-time resolution, offering remote diagnostics and managed services for ongoing repairs and maintenance
Naturally, strategies are dependent on the needs of the customers receiving the services and whether the market is currently underserved.
Customizing the consumer experience
The effects of Amazon-like experiences have equally forced distributors to think about treating their B2B customers as consumers. Like many supply chain organizations, consumerization is a bigger focus for those serving customers at the last mile of the chain. These customers need commerce solutions that allow them to buy online, create quotes, track orders and have inventory visibility in warehouses or stores. Whereas, for those that offer materials at the front end of a supply chain, the elements of consumerization that are most relevant are inventory visibility and order tracking.
“We want the B2C experience in the B2B world. ”Ajay Kamble, CIO, Turtle & Hughes
"We want the B2C experience in the B2B world. At the same time, we also want to enjoy the luxuries that a B2B customer has, which is the white glove service, the specialty value-added service which we don’t get as a consumer."
Regardless of which forces we are responding to, the ultimate goal remains to bring value to the customer in pursuit of a frictionless supply chain. Pairing this with an optimized customer experience, we see that distributors have to provide both digital and physical excellence. At Turtle & Hughes, Ajay explains both how and why they're achieving this.
“Frictionless supply chain doesn’t start at the last mile, in fact, it starts at the first mile. When I make my decision am I making my decisions to purchase a product, or am I actually getting a solution or a full-blown solution? The whole concept should be to provide that digital twin to your physical business. The reason why B2B customers enjoy that relationship is because of that personal touch, and how they experience that personal touch extended in a digital world. At T&H we allow our customers to choose to go from physical to digital as they choose and our systems must support this.”
Creating the digital twin with Salesforce
How can a platform like Salesforce enable distributors to be the digital twin of your physical business and extend that personalized relationship?
A platform centered not only around the customer, but all accounts that serve the customers creates the right frame from which any internal customer-facing or partner can leverage to respond, act or serve the customer. With Manufacturing Cloud, Salesforce has expanded the Account Management activities that are managed by the platform to include:
- Opportunity Management
- Service Management, AND
- Commercial Management
As a result, distributors can use Salesforce to:
- Garner insights into product pairing through cross customer order analysis
- Measure customer purchasing patterns to right size warehouses and measure existing business
- Drive real-time collaboration between customers and suppliers, creating transparency between demand and supply forecasts
- Drive standard processes for the selling and execution of value-added services
- Facilitate order tracking and status
Configuring quickly to pivot with changing business needs
Collapsing these on one platform enables distributors to capitalize on efficiencies in scaling through COEs, driving changes through data as well as pursuing insights through analytics.
Ryerson CDO, Don Fleschut highlights one easy implementation they administered within Salesforce, in response to the pandemic that brought much-needed insight to the organization.
“When COVID came along, in the early days of the pandemic, we quickly realized that we needed to get visibility into how this will impact our customers. A simple, low investment enhancement was to quickly give our salespeople attributes on the Account Profile to tell us how the pandemic was affecting the customer. Are they either part of the first line or second line response to the pandemic? Are there going to be any plant closures due to manufacturers shutting down due to government regulations or infections? Tracking both of these allowed us to make sense of the information and understand the impact to our business, so that we could better manage that supply chain.”
Research suggests those who are winning are investing in SG&A, in people, process and technology and seeing margin growth upwards of 30%.
Develop your digital strategy with Salesforce
To hear how Distributors using Salesforce are realizing their vision, watch this recent webinar: