Six good data management strategies that electrical distributors can start using right now to improve their profit margins, lower operating costs, and help their customers tackle their biggest pain points.
In the first article in this series, we looked at how B2B distributors can use data to create a more customer-centric business approach online and offline. And while data management is a high hurdle for any company that lacks the internal resources needed to gather, assess, and use the information, getting over it usually pays off in the form of better profit margins, lower operating costs, and higher levels of customer satisfaction.
“At the end of the day, most distributors sell the same products and pretty much offer the same pricing,” says Dave Oldfather, VP of business development at Jigsaw Systems, Inc. “Knowing this, the electrical distributor that wants to succeed and get ahead over the next ten years will have to separate itself with good data analysis, and by engaging with customers in a different way than what they’re doing right now.”
To make that happen, distributors can use these key strategies for getting the most out of their data and develop a more customer-centric business approach:
- Foster internal staff to tackle data mining and analysis. The typical warehouse manager probably doesn’t have a background in data science, and neither does the average customer service representative. But that doesn’t mean those folks can’t be trained to adopt a more “data-centric” slant in everything they do on a daily basis. “It’s not a skillset that’s taught very well,” says Oldfather. “If you gave a sales rep a transaction table, he or she probably wouldn’t know what to do with it apart from figuring out what it adds up to.” On the other side of the equation, the typical IT professional probably doesn’t know much about attaining sales quotas for the month or quarter. Blend the two, however, and you get an internal resource that can assess data and make it more actionable.
- Cross-pollinate job roles for best results. For example, a distributor may send an IT professional out on the road to make calls with a sales rep once a month. “Get them out there making sales calls, talking with the customers, seeing the reports,” Oldfather suggests, “and getting an overall better understanding of what that world looks like.” Conversely, sales reps can get involved with the data and reports on what their activities generate on a daily basis. “Make them a part of the implementation time and focus on cross-pollinating roles,” Oldfather says. “These are just some ways that distributors can effectively link what seems to be two very separate worlds at the moment—sales and IT.”
- Focus on distinguishing yourself in the market. Every distributor wants to be able to say that it’s doing something different from everyone else. However, Mark McGready, Jigsaw’s CEO asks, if every distributor is selling the same kind of products at roughly the same price points, and if they have a similar inventory and sales approach, then how can they possibly distinguish themselves? “At this time, they’re all just the same,” says McGready, who sees good data management as a key differentiation point that all electrical distributors can tap into. “Without the software processes and data mining tools in place to raise their games, or to be able to engage with customers in new ways that other companies will be offering,” he warns, “distributors will quickly see that they don’t have anything exceptional to offer and the marketplace will just go somewhere else.”
- Solve your customers’ biggest pain points. Collecting and using the right data can help you identify your customers’ biggest challenges while also helping you know what you need to improve. For example, as customers express their frustrations about your products and point out where they are falling short, (even if they aren’t expressing it directly to you), you can use data to collect that information and, in turn, get more insight into what you’re doing right and what your customers feel you lack. “With that insight,” AJ Agrawal writes in How to Harness Data to Improve Customer Service, “you can then make improvements and changes to make the best version of your product possible without waiting for complaints to come in.”
- Think beyond order taking. Phrases like “terabytes of data” can send shivers down any B2B distributor’s spine, but there are still some straightforward ways to start leveraging data right now. For example, Gregory Smith, SPA, Inc.’s VP of strategic accounts and partnerships, says distributors can start by looking at what customers are buying, how they’re buying it (i.e., Online? Mobile? At the counter?), and how customers are actually using those products and services. By dissecting that data and seeing, for example, where fast-selling products should be positioned in the supply chain (at the manufacturer, in the warehouse, in the store), distributors can do a better job of fulfilling orders quickly. The same data can be used to help customers improve their own business processes. “Put the data in the context of the typical customer and look at how you can use that information to help it be more profitable, get into more markets, and plan more effectively,” Smith advises. “It’s all about being a value-added strategic partner instead of just picking up the phone and taking an order.”
- Plan for the future. Running a successful distributorship requires a solid plan for the future and goals to work toward. While goals and objectives may change over time as the market changes and as old goals are met and surpassed, new goals must continually be set, and new plans must be put in place to ensure that a business can keep moving forward and achieving results. “Thanks to data, it’s easy to plan ahead and continue improving your business for continued development and success,” Agarwal writes. “As you collect and analyze data about how your business is performing, where you need to improve, and how to better cater to customers, you can make plans and set goals that can help ensure your company’s continued development.”
Tagged with best practices, data