Demonstrating value
The growth in B2B e-commerce has put increased pressure on traditional distributors to demonstrate their value to customers. In a relatively short period of time, Amazon Business has become one of the largest industrial distributors in the United States. Yet despite that impressive growth trajectory, the fragmented nature of the industrial products marketplace proves that there are still plenty of business-to-business customers who continue to do business with distributors that have been around for decades. Why is that?
One reason is because many customers are looking for more than simply the convenience of online ordering. They need valued business advisors who can help them solve the problems they face every day. They choose to continue to do business with companies like yours because you have demonstrated the ability to be a problem-solver, which is more important to them (at least for now) than anything an online marketplace can provide.
In order for traditional distributors to compete effectively moving forward, they must step up their game in demonstrating why customers should buy from them rather than from an online marketplace. Historically, distributors have not been very good at explaining their value to customers in a way that’s meaningful to the customer. As a result, conversations often turn to price.
In the article “How the right data can help your sales team” Senthil Gunasekaran of ActVantage lays the groundwork for how salespeople can better articulate value to customers. It starts by understanding your customer’s specific needs (what they value), understanding your company’s value proposition (how you meet your customer’s needs) and then giving salespeople the right tools to help them move the conversation from price to value. If distributors are unable to adapt to this new era of selling, and don’t successfully shift the focus to the entire value chain, it will mean that traditional distributors will have no choice but to try to compete on price alone.
Rich Vurva
Editor/Publisher
Twitter: @IndSupplyMag
This article originally appeared in the March/April 2020 issue of Industrial Supply magazine. Copyright 2020, Direct Business Media.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
