A Better Customer Experience Will Save Distributors in the Age of Amazon

by: Mark Herbert August 29, 2018

Many B2C companies jumped on the customer experience bandwagon long ago. And in July 2017, many distributors realized that, in order to survive, they'd have to soon join them. That summer Goldman-Sachs sent its clients a note titled, “Distributors Disrupted.” In it was the shot heard around the B2B space:

“The value proposition of the industrial distributor is not keeping pace as new entrants like Amazon are disrupting the traditional models. As a result, we see $130bn of industrial distributor TAM [total addressable market] on the line.”

So first Amazon came for the retailers. Then they came for healthcare. And now, Amazon Business has its eyes on you. Described as a “disruptive juggernaut” by most major business publications, Amazon Business has many wondering what the future of distribution will look like. Some distributors are already seeing the revenue-dropping results of the Amazon Effect. Others faced the challenge and, by all counts, rose above by just competitively lowering prices.

Why just lowering prices may not save your distributorship in the long run.

In his book Good to Great, author Jim Collins pushes companies to confront the brutal facts. It’s in the brutal facts, Collins says, that “the right decisions often become self-evident.” What are the brutal facts about Amazon’s move into your B2B space?

Statistics on Amazon Business and how it's disrupting traditional distribution.
*https://www.inc.com/business-insider/amazon-year-old-business-hits-billion-dollars-revenue.html

Maybe. But only lowering prices, no matter how competitively, won’t cement your place in the market in the long term. One of the most powerful forces of the Amazon Effect is its ability to lower prices and absorb financial punches more readily than smaller companies. In fact, the purpose of Amazon Business is to help savvy B2B buyers negotiate lower prices with their suppliers.

And prices are just one side of the coin. The other side is customer loyalty and achieving greater market share during a time when Amazon Business adding on to their value proposition every day. It's positive customer experience that keeps your existing customers buying and your prospects looking at you as a potential supplier. So how do you create a customer experience capable of fighting back the disrupting powers that be?

Get real personal with a data-driven customer experience strategy.

There’s one mistake B2B businesses have been making for a long time: believing B2B and B2C customers are two different animal species. They are not, and have not been for a very long time. B2B customers are people, too, and people want a personal customer experience alongside that smart, shiny product you’re selling. Treat your B2B customers to the same personal touch that B2C customers have enjoyed for decades. But before you begin piecing together a customer experience strategy, start with your available customer data for better insights into what your buyers want.

Dive into your data for a better customer experience.

Some naysayers have already given up the ghost, saying Amazon Business is going to take down all distributors like you slowly but surely. And they make this prediction on one true fact –

Amazon Business collects customer data better than you.

Amazon uses Big Data to drive more success with customers. You may not be able to fight Amazon’s data-collection technology, but you can still get up close and personal with your end-customers with your data. Here’s how to kick start your data-driven customer experience strategy:

Create a better customer experience strategy. Find out more about our Performance Tracking Module here.
Customer data gets you closer to building out better customer experiences and relationships. Better customer relationships matter because buyers want to purchase from companies they find credible, trust and know will continuously deliver top-of-the-line service.

According to a recent CNBC article, “small companies may use Amazon [Business] more because price is the most important factor for them. But larger companies will still want relationships with [distributors] because larger companies place higher value on receiving expertise and customer service.”

Train up distributor sales reps or exit stage left.

Gone are the days of hapless consumers who just wanted a product. Gone also are the days when you could simply label your distributor sales reps just product sellers. Say hello to the days of wildly informed consumers with the power of the internet buzzing in their pockets. What does your customer experience strategy have to offer them?

Hopefully, expert distributor sales reps. Your DSRs should be part of your first line of defense when it comes to personalizing the customer experience. Because nowadays, consumers don’t just want a product. They want the services, support and advice your distributorship offers. Sure, you could press DSRs to learn more with existing training in hope of turning them into product experts. But what about a more long-lasting and surefire solution?

Give DSRs an offer they can’t refuse – incentive rewards they’ll actually use.

People love incentive rewards when they are aligned more closely to their individual preferences. Your DSRs (being human themselves) are no different. So one creative and effective way to motivate salespeople to become your product evangelists is to onboard an online incentive program that rewards DSRs with special items and experiences for training.

Strategically rewarding your sales reps with special items they actually want motivates them to make moves on your goals (increasing sales or loyalty) while helping them accomplish their own (say, finally taking that family vacation to the Bahamas). Incentives are an innovative, and increasingly necessary strategy distributors can turn to for an out-of-the-box sales solution.

Some of the industry’s best incentive programs are accessible on-the-go and offer millions of online rewards to your people for learning more about your inventory, best sales techniques and technical aspects.

Stop harking to the good ol’ days of B2B marketing – Millennials and Gen Z aren’t hearing it.

Not only are they not hearing it, they don’t even know what you’re talking about because your B2B marketing efforts exclusively target the C-suite. How your father or grandfather marketed, distributed or sold product is not what the new generation of B2B buyers respond to. In their fast-paced world where they make up over 50% of the B2B workplace, it’s either their way or no way.

This means that while the C-suite executives do sign off on the big checks to make big purchases, it’s the bright-eyed millennial and, more recently Gen Z employees doing product research and influencing final purchasing decisions. In fact, over 81% of them are. If millennials and Gen Z employees are making the big decisions now, how can you reach them?

Mobilize and digitize your message and your products better, now.

Mobile phones don’t kill distributorships. People kill distributorships. And right now, people really like what Amazon has to offer. Why is that? It’s simple – Amazon Business makes the consumer journey easy with mobile access to what may be billions of products to choose from and a simple, consumer-friendly interface.

Because today’s buyers are used to detailed information on everything from a product’s availability to pricing to their order’s exact location, distributors have to keep up. Anything less than what buyers – especially Millennial B2B buyers – expect is quickly becoming a hassle. So when it comes to your online presence, operate like an e-commerce site: fast, helpful and easy-to-use.

You may be thinking, “But Amazon may become a trillion dollar company soon. I can’t do what they do.”

You’re right about that, but wrong about another. You can make the consumer journey much simpler by changing one thing: how you present your company and brand online. Your online presence and property should

How distributors should set up their online customer experience. *https://www.emarketer.com/Article/Mobile-Usage-Among-B2B-Buyers-Expected-Grow/1015024
**https://www.scientiamobile.com/mobile-site-visitors-abandon-more-than-3-seconds/

According to a survey by Accenture, 86% of US-based B2B companies with over $500 million in annual revenue have already implemented e-commerce solutions. That's a sign that good customer service and catalogs simply aren't enough for customers anymore. Putting your best foot forward online helps you capture new buyers and stay top of mind with existing ones.

The bottom line is this: you need to understand the voice of the customer.

Customers define everything you do: the quality of your partner's products, your brand promise, your usefulness and so much more. There's a lot that rides on a positive customer experience, especially as Amazon Business reaches for more market share. So kick start your customer experience strategy with good data, trained up DSRs and a online presence your customers feel safe cozying up to. With better data, tools and strategies, Amazon Business won't be the end of distributors as you know it. After all,  you already have the strong, long-lasting relationships with customers that preceded Amazon Business. The key is to make those relationships stickier through a tactical customer experience strategy.

PS - Did you know?

When life gives you Amazon-sized lemons, make lemonade with an incentive program. Incentive programs are one of the few ways distributors can still increase sales and gain market share, creatively. Done right these programs help you hear your customer's voice loud and clear. Ready to open up the door to a new normal with bigger B2B sales in the age of Amazon Business? Give us a call!