172. Grow Traditional Core Competencies, Then Digital Ones

Distribution Channels’ Big Challenge

Suppliers and their distributors will have to rethink their combined channel models to digitally engage end-users within the fast-unfolding digital commerce era. Most distributors must first, however, get more competent at customer-centric service value. Digital innovations come when that foundation has been built.

Core Competency?

A “Core Competency” is the competitive advantage(s) that you have over all other competitors, which is the engine for your superior profits and growth. If most of your sales are on commodity products to repeat buyers, what’s your edge? “Good” service sold by “solid” reps is a commodity, and far from “the best”. You will get “survival profits” if lucky, and have no chance of getting to the digital future first, or on top.

You must immediately begin to re-invent best, total-service value, and replenishment-process-cost solutions, for one target-customer niche at a time.

You Will Be the Best When:

  1. You know which best target customers, (or customer niches), are most vital, (net-profitable), to your firm.
  2. You have done customer research to define service metrics that are tuned to each target customer/niche.
  3. You have engaged all employees to achieve best service consistency. They, in return, will earn job pride, security, growth, and premium compensation.
  4. Your reps get (from transactional buyers), the “last-look”, and successfully insist on extra points for their own value-added, and your superior value service.
  5. Reps will also be able to turn “price requests” into better, win-win replenishment relationships. Their Quid Pro Quo response: “Better prices are only possible, if you (customer) are willing to change your buying policies and/or processes. Our win-win goals: reduce your total-procurement-system costs beyond just price; and, to lower our total cost-to-serve as a percent of your (increased) purchase volume. We can only afford lower prices paid by reduced service-activity costs. Shall we put my analytics team to the task?”
  6. All customers have become and will stay net-profitable!
  7. All four of your major stakeholder groups – customers, employees, shareholders, and suppliers – are loving the rewards of your competency innovations.

And, you will then have the courage and cash-flow for digital innovations.

More Help for This Journey?

For a detailed how-to document, download my Core Customer Renewal Roadmap

Then, contact me for a free virtual-session for your management team to cover both the Roadmap and the supporting analytics. (bruce@merrifield.com)

Finally, for existing Waypoint clients, I will be doing a whatever-you-want-to-know/do session in Phoenix on November 7th.  

WayPoint Institute 2019