The Distribution Blog

Q&A: Benco Dental's Chuck Cohen on the Secret to Long-Term Success

July 11, 2021

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Chuck Cohen’s entire life has been spent in the distribution space. Today, he’s the Managing Director of Benco Dental, a full-service dental distribution company his grandfather started in 1930.  

We recently enjoyed a conversation with Chuck where we discussed his 30-year career at Benco, the importance of knowing your customers, investing in technology, and more. We share highlights of our conversation with you here.  

Proton: Over your career, what are some of the biggest changes you’ve witnessed in distribution?

Cohen: I think distribution is absolutely necessary for most everything we sell today. Some of the technology and initiatives that distributors have discovered and implemented over the years are truly as game-changing as the patents and the new innovations that come from our friends on the manufacturing side.  

The biggest changes in distribution over my career have been on the IT side. Amazon is a great case study. My observation is that Jeff Bezos has been given too much credit for the idea that you start with a customer-centric attitude. I think that’s kind of table stakes. I think any business that stays in business clearly must be somewhat customer-focused.  

The insight most distributors need to learn from Jeff Bezos, and it’s a hard lesson, is that every business is an IT business that happens to do something else. So, I’m not a distributor of dental supplies at Benco Dental. We are an IT company that happens to also move boxes that contain dental products.    

Proton: What indicates a distributor has embraced this insight?  

Cohen: Distributors must continue to invest and focus on IT in our businesses. Any distributor that isn’t over-investing—or at least moderately investing—in IT is destined to be diminished. Distributors must put IT systems at the center of everything they do. If they don’t, they will remain mediocre going forward.  

Proton: What’s your advice to distributors who haven’t made this investment in technology?  

Cohen: I recognize one of the key advantages that we’ve always had at Benco is that one of the two co-managing partners in the business, my brother, is an IT person by training. When one of the owners says, “We need more programmers,” it tends to happen because people don’t typically argue with an owner. That’s really enabled us and given us a lot more focus on IT and IT expertise than most distributors have. Most distributors, I think, don’t focus enough on IT because it’s complicated, it’s expensive and it’s foreign.  

We’ve always invested more in technology as a percentage of sales than most distributors our size. We were always leading on the investment side. We don’t want to be bleeding edge because if you’re too far ahead of the customers, it’s hard to get traction. We don’t want to be too fast, because if you’re too far ahead of the customers, it’s very hard to get traction.

Over time that has proven to be one of the best long-term strategic decisions that we’ve made as an organization, because it’s enabled us to really adopt technology as a strategic innovation point in our business where other distributors our size have not.

Proton: Do you have guidelines to follow when selecting technology to invest in?  

Cohen: We always start with the customer. The first question we ask is, “What value does this provide to the customer?” As an example, technology might provide value to our customers because it enables them to order our products more efficiently. If this is the case, it’s a great thing to invest in. This starts with really knowing the customer. It’s an easy thing to say, but it’s very easy as distributors for us to lose sight of the customers. Speaking to my peers, a lot of them, truth be told, don’t spend enough time with their customers. They don’t understand their customers well enough.  

The second question we ask is, “What value does it provide us?” There are technologies that don’t provide any customer value, but they just enable us to be more leveraged or more efficient, and that makes it worthy of our investment. Usually, the value to us is something along the lines of making us more efficient or more productive.  

The third criteria we use is how technology can help grow our business over time. Technology can serve as a leverage point in the business so that we can grow the top line faster than the expense line. Anything we can do today to make the business more efficient and leverageable in the future is something we’re going to invest in. I’m not sure that’s true of every distributor.  

Proton: Sounds like you approach it with a growth mindset.  

Cohen: Yes, exactly. A growth mindset says, “Okay, in five years, we’re going to be X percent bigger.” Therefore, it makes sense for us to overinvest today in technology, so we can achieve that growth.  

Proton: What do you see on the horizon as we move on from the pandemic?  

Cohen: If you survived the pandemic, it was in part because you were lucky. In my 30-year career, I’ve never seen a macroeconomic event that’s been so arbitrary as the pandemic. Especially for distributors.

I know distributors who are really smart distributors, very well run, and they just happen to be in the wrong business at the wrong time. I don’t care how smart you are, or how good your business is. If your business is to distribute food to stadiums for concerts, you’re out. There’s nothing you can do.

On the other side of the pandemic, it’s my opinion and one shared by others, that we’re going to be on a bit of a growth trajectory as an economy as we catch up. I expect growth is around the corner, especially for those who are smart operators and happen to be operating in the right space.  

I also think the biggest challenge will continue to be growth. I think every business that’s in the right space will have a growth spurt over the next year or two.  

Proton: What’s your advice for distributors to make the most of this growth spurt?  

Cohen: The question is: What will you do during your growth spurt? Will you get more sustainable? Will you make investments in your business? Will you build a growth engine that’s sustainable for three or four years after that? Distributors need to make sure they grow in a way that’s leverageable and sustainable.  

Distribution is a simple (but not easy) business. My father taught me and my brother that years ago.

The whole game in distribution is an incremental improvement game. Which is, “How do we grow our top line faster than we grow our expense line?” That’s it. That’s scale leveragability. If you’re not employing technology to get that done, you’re not going to get it done. You’re going to fail.  

Technology is what enables us to have more productive people, beginning, middle and end. So, leveraging technology is key to any distributor finding scale.

Proton: What's your advice for helping distributors differentiate themselves today?

Cohen: I know a lot of distributors. I’m proud to be a distributor. Most distributors I know do not spend enough time with their customers; they do not understand their customers as well as they need to.

I really believe that distributors looking to differentiate themselves and looking to grow, need to ask: “What are we doing to really understand our customer?” Once you do that, then I think you’re much more likely to figure out how to differentiate your business.

What really creates the Benco difference? Everybody at Benco with any decision-making responsibilities, from me and my brother on down through the organization, must spend at least a day a month in the car with a Benco frontline sales or service person, visiting our customers in their dental offices. On these visits, I want to see what’s going on. I want to observe. It’s not a staged visit.  

If you want to sit in that room and make decisions about this company from a strategic and forward-thinking point of view, on a regular basis, you are out visiting customers with sales and service techs.

Until you walk a mile in your customers’ shoes, visiting them in their environment, seeing what they’re doing, really understanding what customers are going through on a day-to-day basis, how you're helping them or not helping them, you don’t really know your customers.

When our leadership team gets together for our meetings and we’re trying to make decisions for the long-term health of the business, I know I’ve done my job when it’s not just, “This is what I think we should do.” It is, “When I was out visiting in North Carolina last week, this is what I saw. That’s why I think we should do this.”

That's what makes us different. That’s why we could keep growing. In my opinion, that’s the one thing we do that’s different. So, that’s our secret sauce, and then that leads to sitting in a room and making decisions with the customer's needs first.

Proton: Can you speak to the balance that distributors need to strike between technology and the personal touch you described with these in-person visits?  

Cohen: You need both. A good way to illustrate this is to think about your doctor.  

I don’t want to live in a world where doctors get replaced by some sort of AI tool. I want to go to a doctor with a lot of experience who’s using tools like X-rays and computers to inform their diagnosis. I hope we never live in a world where I’m just typing into some sort of Google engine my symptoms, and it’s coming back with, “You've got this.” That’s not where I want to be.  

I also don’t want to go to a doctor who’s just using his or her gut feel. I want to go to a doctor who says, “I just invested in these three new machines, or our hospital did, I’m going to put you through them. Then I'm going to take all that data from the machines, and then I'm going to add my expertise to it.”

So, in my opinion, it’s an “and.” It’s not an “either or.” It’s A and B.  

And because of the doctor’s investment in technology, they can be more productive. They can see more patients. They can be smarter about diagnoses. They can more likely get it right than get it wrong.

There’s nothing, in my opinion, that takes the place of the observation and experience that a doctor— or a salesperson—brings to the conversation.

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