67. Distributors, Retune Your Brand and Find Your Partners

Your brand statement encompasses your company’s beliefs about your competitive edge. It’s your company mantra. Many distributors proclaim something like, “Our good people deliver good service”. But, most companies don’t have measurable, customer-centric service excellence that could help them earn a dominant share of accounts, have the firmest prices, or become first-choice for supply chain partnerships. Why not retune your brand?

What’s your path to powering your brand with service excellence? So, if you have a big warehouse in a warehouse district and an outside sales force, your future has been here in other channels for some time.

Your Future in a New Service Promise

A promise should be an IF, THEN statement. Most of all, IF your customer buys all they can from you, THEN you will:

  • Lower or optimize all 11 elements of total procurement cost, including price
  • Minimize employee downtime costs due to avoidable stock-outs
  • Maximize uptime and on-time productivity for better customer satisfaction and retention
  • Be able to partner in a continuously-improving, win-win, supply chain relationship

McDonalds started partnering with its distributors in 1956, and many that they still have today. In the 1980s, entire retail channels switched to integrated, sole supply contracts (drug, grocery). In the 1990s the hospital supply channel went the supply chain route. And, the biggest accounts in other channels have been increasingly migrating to supply chain buying solutions since the mid-1990s.

Do all Customers Want Replenishment Partnerships?

No! Supply chain partnerships work only when both parties can realize, co-create, and share system savings. Therefore, about 5% of customers and distributors seem willing and able to synergize. As a result, all others increase costs by struggling over price.

The customers who are ripe for win-win partnerships are:

  • Ambitious, innovative and growing fast
  • Open and progressive
  • Already giving you big net profits to offset your losing accounts

These customers have ready-when-you-are capabilities (including team selling), so you can grow with them instead of a competitor.

How to Upgrade Your Partnering Capabilities- Retune Your Brand

So, to partner you need an augmented product, with features like this (in this order):

  1. One-stop shopping with the highest guaranteed fill rates
  2. Basic service excellence, which include zero errors, 100% on-time delivery, plus five or more service metrics tuned to the customer and/or their niche
  3. Extra services to sell, install, maintain, and improve supply-chain math-based solutions

So, to become customer-centric, retune these components guided by deeper insights from additional customer-needs research and customer-profitability analytics at the line-item level. In conclusion, providing standard service with rep-does-all coverage just can’t win.

Contact me at bruce@merrifield.com if you’d like to discuss these concepts further. 

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