August 18, 2021
Jonathan Bein is a managing partner at Distribution Strategy Group, which offers thought leadership, research and consulting services for distributors. With a track record of success as an executive for software product and services companies, Jonathan helps companies win in today’s changing market.
We talked to Jonathan about the influence of technology on the customer journey, DSG’s research and State of Technology report, and the importance of a good customer experience.
Proton: What are the top technology priorities for distributors as B2B customers shift toward shopping digitally?
Jonathan Bein: I would answer this from a customer-journey perspective. There’s a lot of technology in terms of how customers shop for products, including how they find, research, evaluate and assess the product. The technology is driving efficiency gains for the customer, making them more efficient at finding what they want. That’s a big part of how customers are going to evaluate their customer experience with a distributor. How was it for me to shop there? If I go to a distributor website, and I search for something that I know they have, but I can’t find it in the search engine, it’s a big turnoff. It’s a sales prevention technique. How easy is it to navigate the site? Can I get things done quickly when I’m in the shopping part of the customer journey?
In the buying stage in the B2B world, there are 10 or 11 different ways to buy, such as through EDI or sending a purchase order through email. There’s a lot of automation already in this stage of the journey. These touchless ordering technologies provide efficiency for the distributor and the customer.
In fulfillment, there’s significant automation available in the order-to-cash cycle, and it provides a significant benefit to the distributor. Depending on the size of the distributor, it frees up multiple FTEs who would otherwise do the order and payment processing. These technologies are really powerful in terms of generating efficiencies and value for the distributor. For the customer, there’s improved accuracy and ease of doing business. I think every distributor should be looking at these technologies.
Also in fulfillment, there’s a lot happening regarding automation in the warehouse. However, what we’re talking about in our research is the automation that a customer would see, like autonomous vehicle delivery or drones. I think by mid-decade, we’ll see about 15% of distributors doing something with autonomous vehicles.
Proton: The DSG State of Technology report suggests that respondents were not satisfied with their CRM solution. This is at least partially a result of inconsistent adoption across an organization and solutions being used for management oversight. What advice would you give distributors?
Bein: I think the biggest problem with CRMs is that the deployments are not oriented toward making the user’s life, whether a sales rep or customer service rep, better and more productive. They’re often set up as management control. But from what we’ve seen, the percentage of CRM solutions that are successful — meaning they get used and provide value — are few and far between. There’s a next generation of things flowing into CRM. Right now, CRM is a passive technology. The sales rep tells the CRM who the customer is, what the opportunity might be and inputs the follow-up action. There are technologies coming out that say here’s who you should call and when you should call and what you should try to sell them. What we’re going to see over the next few years is the presence of CRM solutions that are active or proactive.
Proton: What do distributors risk when they’re technology-averse?
Bein: Our expectations for technology in the B2B world are driven by our experiences with technology in the B2C world, and that dynamic was accelerated by COVID-19. We knew ecommerce business was going to be a much larger part of the total experience, but COVID-19 came along and accelerated that by at least three years. The role of sales is changing. We’re seeing a greater movement toward self-service. We’re seeing more distributors with ecommerce. We’ve seen a 30% increase in adoption from last year to this year. The general trend of more and more companies doing this means that you have to deliver a better experience than the next guy or gal. A few years ago, it was sufficient to merely have ecommerce. You didn't have to do it well to be impressive. Now, you have to do it well.
Proton: Let’s discuss a little bit more about how technology augments human resources rather than replaces them.
Bein: The hardest part of shopping—helping someone figure out what a solution looks like or even what category to buy in—is going to remain in the realm of human beings for a long, long time. The more complex the solution, the greater value add from a human. There are many technologies, like Proton, that help sales and customer service reps be more efficient and consultative. This is one way technology augments human resources.
In our State of Distributor Analytics research, we laid out different stages of maturity of analytics for a company. These are commonly accepted descriptors of maturity. One is descriptive analytics, which is simple reporting. Second is diagnostic, so why is something happening. The third is predictive or what will happen. The fourth is prescriptive, so what should happen. One of the things that we saw in the survey responses and in doing interviews with survey respondents was that there were a number of cases where people are working with the analytics. They’re taking a descriptive analytic piece of data, and they are doing something that’s diagnostic or predictive.
If you don't start using this data to make decisions, you’re going to lose your competitive edge. If you don’t use the resource of data and the machines to help analyze it to get insights quicker, you won’t be able to compete with companies that are using technology to leverage and inform their decision-making.
Proton: What do you see as barriers to technology adoption by distributors?
Bein: Some companies don’t have the budget for newer technologies. Because of their budget limitations, they have to wait until the technology becomes commoditized and more affordable.
Another population of distributors still believe that business is all about relationships and people. For these people, it’s not that they don’t have the resources; rather, they don’t have the inclination. They’ve yet to figure out how quickly things are going digital. These people aren’t going to be in a good place in a few years because they will not have the benefits of the efficiencies on both sides, for the customer and the distributor.
Proton: How do you think distributors can keep customer satisfaction high by adopting technology?
Bein: Customer satisfaction is related to retention. In the buying stage, there are make or break experiences for retention. I don’t think we’re at a point where if you don’t have automated order-to-cash or you don’t have an autonomous vehicle by 2024, you’re out. It’s really in the shopping and buying stages where people have expectations that will make or break the customer experience today. About eight years ago, we researched whether a good ecommerce experience was a prerequisite for doing business with somebody. There was a meaningful portion of the customer base that said if you don’t have a good ecommerce site, we’re not doing business with you. I would hazard a strong guess that a good ecommerce experience is even more of a requirement now.