Survey: 80% of McKinsey Clients Fret Business-Model Risk

So much for global-2000 CEOs. What are distributor CEOs thinking?    

1. What percent of distributors – with commissioned, field-sales reps- have business-model worries?
2. What percent believe the results (from multiple surveys) that: a majority of millennial B2B buyers don’t want regular sales calls; or, to pay for them in higher prices?  
3. How many CEOs are “well-informed” about their key suppliers’ plans for: digital engagement of end-user customers along with new, omnichannel journeys for them?
4. What are the dis- and re-intermediation realities of suppliers’ digital plans?

Distributors – Survey Key Suppliers and Customers – ASAP

What will you discover? Model-innovation opportunities will emerge at three levels: collaborating with suppliers’ omnichannel plans; hybid e-selling options for customers; and replenishment system-solutions for key accounts.

Assumptions:

1. 24/7, total product information and digital-seller pricing are burgeoning.
2. Digital disruptors (starring direct-factory resellers on Amazon) will target your high-profit SKUs and self-help customers.
3. You can’t meet disruptors’ prices with your existing, service-cost-bundle model.
4. But, you can pivot to co-create – new, open-book, a la carte, services-for-fees replenishment contracts – with key accounts.  

How to invent new business-models? The template (and necessary talent to steal) already exists within: the third-party logistics industry; and, big-volume, distribution channels (Retail: drug, grocery. Hospital supply. Integrated supply for MRO. Etc.)  

More Specific Steps:

1. Get cost-to-serve-model analytics at the line/SKU level. 
2. Act upon the insights within the profit/loss cross-subsidies that exist amongst both customers and SKUs. (How? See my 12 webinars )
3. Learn and be able to sell service-activity costs on an a la carte basis.
4. Create an – “everyone-can-win with big-change” – transformational story and roadmap. You must sell your troops on moving towards new, digital-commerce models. For a generic example: download my “Core Renewal Roadmap”.
5. Adopt a business-model innovation mindset. Set up a formal innovation department around your new: analytics, change champion and skills. Remember: maintaining the status quo is a most risky option.

Conclusion

It all sounds scary. But, getting new – analytics, insights, plays and education – all combine to reduce concerns and enable low-risk, baby-steps forward. You don’t have to be perfect. Just be earlier and better than the majority of legacy competitors who won’t change.