2023 New Year’s Resolutions for Distributors

I hate New Year’s Resolutions. How about you? Aren’t you tired of making promises that fall short of expectations? It’s like a political season, but far more personal and disappointing. Well, cheer up. I’m here to offer you five New Year’s resolutions for your distribution business that you can feel good about because they are specific, measurable, achievable, relevant, and time-bound. That’s right, these resolutions are SMART goals. You can use this list and make it part of your sales plan heading into the new year. If you like our suggestions, please be sure to share this article with your executive, sales, and marketing teams.

1. Adopt a Hunting and Farming Approach to Sales

In more than fifteen years of working with independent industrial distributors, there’s one thing that separates those who consistently hit their sales and profit goals and those who do not. It’s the ability to effectively hunt, win, and automate new business opportunities. Distributors consistently struggle to develop sales teams, implement technology, and engineer processes that allow them to rise above the typical leaky-bucket sales cycles that often leave them feeling stuck.

The answer is to automate the ordering process for existing customers so that your sales team spends less time with happy customers and more time growing stagnant accounts. Legacy personnel, technology, and processes keep your sales reps stuck in the perpetual cycle of having to babysit customer accounts out of fear of losing an order to a competitor.?

What do your customers really want? This micromanagement is not the kind of experience your customers want. They want you when they need you… and that’s it. Business moves too fast for your field reps to spend time buying donuts and small-talking their customers. Ask your top accounts what they want from your relationship, and you are likely to find that pricing, availability, convenience, speed, and transparency are the highest priorities on their list. Sorry, Field-Rep Fred… it’s time to ditch the donuts for some documented value.

Example SMART Goal

“By June 30, 2023 we will implement a sales strategy that shifts our team's attention to new and under-performing accounts while automating our existing business. Our goal is to increase new business revenue by 25% while reducing customer churn by 10%.

Action Item Checklist

• We have the right people on the bus and the right people are in the right places.
• We have a documented sales strategy with customer stratification and target accounts.
• We have the ability to automate sales touch points through email, in-app messaging, and SMS.
• We have a CRM that everyone knows how to use and we have minimum activity requirements.
• We hold our sales team accountable for finding and winning new business.

2. Automate the Order Process for Existing Accounts

As mentioned above, one of the biggest roadblocks holding you back from consistent growth is your sales team’s inability to hunt new business and turn around failing accounts. That’s because most of their time is spent with the “Golden Goose”, and who could blame them? You may have inadvertently incentivized your team to stay stuck in this cycle of eroding margins and stale business. If this is you, relax. It’s fixable. A culture-shift in your sales operation is going to require no small amount of tenacity and commitment on your part. The answer is to automate the ordering process and customer touch-points.

Why do so many distributors fail to do this?

It’s not because the software doesn’t exist, and it’s not because they don’t know any better. If we’re honest with ourselves, it’s because we’re afraid. We are afraid that if we were to implement an eCommerce, self-serving, ordering experience that we will lose our best customers and sales reps. I absolutely understand that sentiment.?

Change hurts, but not changing hurts more. You may in fact, have some legacy accounts who have zero interest in implementing any changes. They don’t want eCommerce. They want Fred, donuts, and write their order on a napkin. That’s fine. But wouldn’t leaving you for some other supplier cause the same frustration? Don’t be so discouraged by change management. In today’s business environment, change is inevitable and frequent. Even the most archaic customers get it. With a great onboarding process and incentive programs for sales reps and customers alike, you can turn change management from a liability to an asset.

PS – Want to learn more about how we’ve helped companies like yours successfully implement sales tools and customer onboarding campaigns? I’m an expert in change management for distributors, and I would be happy to share some ideas. Click here to book a quick meeting.?

Example SMART Goal

“By August 31, 2023 we will have successfully launched a customer eCommerce onboarding process that automates customer shopping, quoting, ordering, and account management so that our sales team can focus on growing new business.”

Action Item Checklist

• We have the right software application(s) and partner(s) to help us implement a new customer ordering process.
• We have a documented strategy for both staff and customer training and onboarding.
• We have created or adjusted our compensation plan to encourage a new approach to sales.
• We have a documented customer onboarding strategy and incentive program.
• We have the technical ability to customize each customer’s online purchasing experience to achieve operational efficiencies for us and for them.

3. Make 2023 the Year for Record Online Sales

How long will you talk about eCommerce and digital transformation for your distribution business before you actually get serious about making it work? I mean REALLY making it work? There’s no need for us to list statistics about online B2B behemoths taking your market share. We all know that companies like Amazon, Grainger, Zoro, and the like are growing consistently year over year, outpacing industry growth and steadily taking your customer’s purchases.?

Eye-opening numbers that should stop and make us think! According to a recent B2B Buyer’s Survey from Digital Commerce 360, 40% of B2B buyers purchase at least 50% of their company’s purchases on marketplaces. YIKES! No wonder growth is so hard without a competitive eCommerce solution. You are losing HALF of your customer’s business to online marketplaces and big box retailers. We need to stop the bleeding, but how?

Maybe you’ve tried eCommerce before only to be disappointed with the results (or lack thereof). You’re not alone. From the same survey we learned that in 2021, 33% of distributors said that e-commerce accounted for less than 10% of their total sales. That’s post-pandemic. Less than 10% is non-existent and therefore a non-priority when it comes to strategic investments. Ironically, it should be the single most-important investment a distributor can make for the future of their business.?

Two common mistakes are made when choosing an eCommerce partner and/or platform. Firstly, many small-to-medium sized distributors opt for a “budget solution” like an ERP add-on, WordPress plugin, or B2C Shopify store. This is a huge mistake because these solutions lack the (often) complex B2B features and integrations that make for a good shopping and purchasing experience.?

Secondly, small and large distributors alike are guilty of throwing money at enterprise solutions that have the ability to deliver a great B2B experience, but then relegate what should be a full-blown strategic initiative to an IT or marketing “project”. Anyone who understands software implementation knows that unless your eCommerce solution is championed from the top-down, it’s doomed for failure.

Our suggestion is to take a multi-year, incremental approach to digital transformation that includes specific milestones on the path to online maturity. Rome wasn’t built in a day, and 50% of sales online doesn’t happen overnight. While patience is required, results can happen overnight. Upon the launch of a documented, frictionless eCommerce experience, your sales team now has the playing field leveled and can regain ground lost to online competitors.?

Example SMART Goal

“By March 31, 2023 we will have chosen our eCommerce partner and developed a multi-year, incremental digital transformation strategy with documented milestones and SMART goals.”

Action Item Checklist:

• We are confident that our current eCommerce platform / partner can help us achieve 50% online sales in the next five years.
• We will explore software applications and strategic partnerships that can help us achieve our goals for digital transformation.
• We are willing to invest in the future of our business.
• We have the right leadership in place to champion our eCommerce business.
• We understand the importance of digital transformation and have communicated our vision to our customers and staff.

4. Develop a Quote Process that Converts

If record sales is your goal this year (as it should be every year), then we should focus our attention on closing individual deals/quotes faster and more frequently. The sales cycle for distributors and manufacturers is often slowed-down and stalled-out by outdated tactics.?

A plea to change your outdated sales process: If you are in sales, it’s time to lose the spreadsheets and endless follow-up associated with the way things are currently done: you’re introduced to an opportunity, you make an in-person visit or respond to an email, you throw together a list of items and pricing, and you beg for the order. Meanwhile, your prospect is using the very spreadsheet of MFG part numbers and pricing to shop your quote against other distributors. Then, even if you get the go-ahead on the order, your customer has to get management approval… and the process drags on for eternity.

This is the most out-of-date, old-fashioned, and detrimental sales process you could possibly employ.

A better solution would be to start with rich product content (images, descriptions, downloads, etc.) integrated with your inventory and order management software. Rather than sending a spreadsheet, this product list is prepared and presented through a secure, online portal where your customers can view related products, make pricing comparisons, and ultimately add items to a favorites list or shopping cart. Imagine your customer’s online portal including custom payment terms, shipping options, incentives, and a clear brand promise that aligns with your customer’s goals.?

All of this is so easy a caveman can do it. With a few clicks, your sales rep can create a customer account, add items, implement custom pricing, and email the customer a link to login, shop, and checkout to complete the order. The order information is stored in the customer’s portal and (here’s the magic), your customer will receive automated emails and notifications when it’s time to reorder, finalize checkout, make payments on their account, and view related offers. Ahhh… time to relax. Just kidding, get out there and knock on some doors!

Example SMART Goal:

“By August 31, 2023 we will improve our closed opportunities by 20% by training our sales team to utilize our CommerzNXT platform to sell faster, easier, and better.”

Action Item Checklist:

• We have the right software solution(s) / partner(s) to automate the quoting process.
• We are prepared to incentivize our sales team for online sales associated with their accounts.
• We have a brand promise or value proposition that aligns with our customer’s goals.
• We have a documented tiered pricing model and the ability to research pricing from other online competitors.
• We have documented supply-chain workflows for in-stock, drop-ship, and storeroom management.

5. Become More Visible to More End-Users

Who wouldn’t want to be discovered by more potential customers this year? It’s easier said than done, but search-engine optimization and top-of-the-funnel marketing tactics can be easily measured, reported on, and improved through a team effort. SEO is different in 2023, and the ways that it’s different is absolutely to your advantage as a wholesale distributor or manufacturer. No more cramming keywords into your web pages! Today’s search algorithms are far too complex to manipulate through keyword stuffing. Instead, search engines, like Google, are looking for thought-leaders with very specific and helpful content that aligns with your customer’s search intent.

For more information, check out this article from SEMRush about current SEO trends. Pay attention particularly to the EAT principle: expertise, authoritativeness, and trustworthiness. These factors help determine if a web page has useful quality content. This principle is especially relevant in business niches like industrial tools, safety, industrial automation, and medical supply.

Example SMART Goal

“By December 31, 2023 we will increase our website traffic 200% by implementing a weekly content marketing strategy that aligns with our overall business development plan.”

Action Item Checklist

• We have a website that features search-engine-optimized product content and EAT content (expertise, authoritativeness, and trustworthiness).
• We are utilizing a SEO tool to help us identify areas of technical improvement.
• Our website has been submitted to Google and other search engines.
• We have a Google Business Profile that is accurate (bonus points for customer reviews).
• Our website has a way to generate leads (quote requests, contact us, forms, and special offers).
• We have a documented content marketing strategy and calendar for at least the next 3-months.
• We have thoughtful buyer personas that help us develop content that will EAT.