Plumbing contractor and distributor relationship
A familiar refrain I hear in my travels is “Thisalways has been and always will be a relationship business.”
More often than not this claim is made by individuals who have been in the business — let’s just say — a few years. They successfully built their territory, career and/or business on the basis of these relationships. They have friends in the business. They enjoy each other’s company at the annual industry meeting. They always can rely on the other for a game of golf or lunch.
And in the middle of all that relationship activity, they transacted business with one another. But things are changing rapidly.
Business is being done differently. In many of my presentations I begin with the context that we find ourselves in the age of disruption. And one of the first aspects of our business being disrupted at what seems warp speed are the relationships that got us to where we are today.
For example, a large plumbing contractor recently blindsided an incumbent rep agency, distributor and manufacturer by moving business to another solution despite the incumbent being good friends with the contractor’s service manager.
In a changing world, the relationships we have relied on for so long are being disrupted. They are under siege.
- Forrester reports that while it varies with product complexity and market maturity, today’s buyers might be anywhere from two-thirds to 90% of the way through their buying journey before they reach out to the vendor.
- The Corporate Executive Board estimates 57% of a customer’s buying decision is made before her or she even speaks to a sales rep. Today’s buyers are getting more of their information from outside (mostly digital) sources rather than directly from the supplier.
- At the recent Advance Profit Innovation Conference in Phoenix, Jonathan Bein, PhD, managing partner with Real Results Marketing, reported an ongoing survey of 3,000 end users from multiple distributors shows 16% of customers never want a sales rep to visit and 21% want a visit once a year. Clearly the relationship that was once the cornerstone of the business is being disrupted.
Much of the relationship model was based on local proximity, logistics and knowledge sharing — issues that still are important today. But increasingly there is an intersection of technology, process and human interaction that will drive a new form of relationship going forward. Our challenge and opportunity is identifying what that intersection looks like for each of our businesses and then designing models and platforms that will meet these changing needs of the customer.
When we continue to say “This is a relationship business,” it is code for, “I want to continue doing business the way we’ve done it for the last 20 years.” It is code for ignoring and discounting the new ways business is being transacted today and in the future.
A key aspect of innovation is creative destruction — destroying something that once served us well in order to make room for something new. It’s time to creatively destruct the word “relationship” in our businesses.
Get your sales, marketing, operation, IT and administration team around a table and present this problem to them.
“Assume in three years core customers will not want to see any outside salespeople. How will we effectively market and sell to these core customers?”
I’m not suggesting this will happen, but this exercise will help you begin to form a new paradigm beyond “this is a relationship business.” You just might discover a new mantra to drive your sales, marketing and innovation efforts. Mantra’s such as:
- This is a business about relevance.
- This is a solutions business.
- This is a customer-centric business.
- This is a business of business outcomes.
Our relationships are under siege. Let’s not fight it. Let’s embrace the disruption and use it to innovate new models and platforms of leading our customers to a better future for which they are willing and capable of rewarding us.
This article was originally titled “We are under siege” in the November 2015 print edition of Supply House Times.