We recently chatted with someone who explained why AI couldn’t completely replace humans. They said that AI lacks emotional intelligence and human-like consciousness and has limitations in adaptability. They concluded that AI should be used to augment human intelligence rather than replace us altogether.
Okay, so this wasn’t a someone so much as a something: Microsoft’s Bing AI chatbot. And while conspiracy-minded people might say, “That’s just what they want us to think,” we agree with the AI’s self-assessment. AI isn’t some sentient killer robot that’s coming to get us. It’s an incredibly useful tool, and it’s coming to help us. It’s up to us to figure out how best to make that happen.
Fears about technology replacing jobs go back centuries, possibly all the way to the invention of the wheel. More recently, ERP systems didn’t replace accounting or logistics jobs but automated routine tasks, letting employees focus on more strategic tasks. eCommerce platforms didn’t kill retail but instead helped retailers reach more customers.
AI is a true game-changer, but not in the ominous way that some of the hype around it would have you believe. Like ERP and ecommerce, its main function is to make things easier for the people using it, making business better for the companies that embrace it. As Harvard Business School professor Karim Lakhani puts it, “AI is not going to replace humans, but humans with AI are going to replace humans without AI.” And distribution sales is one area where it’s primed to do just that.
Sales reps spend a mere 34% of their time actually selling. They spend the rest digging up product information, filling out order paperwork, reconciling inconsistent data and other tedious activities. No wonder only 44% of distributors are satisfied or very satisfied with their sales efforts, according to the Distribution Strategy Group’s 2022 State of Sales in Distribution; sales reps are getting burnt out — they’re barely getting to do what they’re passionate about!
Why AI is Especially Useful in Distribution Sales
Take the amount of data that an average sales rep must sift through, multiply it by a lot, and that’s what a distribution sales rep has to deal with. Not even the most talented distribution sales rep can possibly memorize their company’s huge, diverse product catalog, much less use that knowledge to take advantage of every opportunity to cross-sell and upsell. Plus, with every acquisition the depth of the product catalog and book of business increases. It’s hard for sales reps to keep up and keep track of all the new products and customers.
Unlike human brains, artificial intelligence tools are made to work with massive amounts of data. It can consume millions of data points, including transactional history, customer locations, customer types and information about customers with similar behavior, analyze those data points and recommend actions to a sales rep who can then take the baton and run with it. Without machine learning, it would be very difficult for a distribution sales rep to consistently pinpoint the kinds of opportunities that AI can find in a matter of seconds.
How AI Has Helped Distributors
Mike Page, CMO and CTO at R.S. Hughes, was an early adopter of AI with his sales teams and found that not only did it help new salespeople get up to speed much more quickly than usual, but it also helped experienced salespeople move faster to make targeted pitches to their most important clients. As Page told Industrial Supply, “The data tells you, ‘Here’s who you need to talk to today. Here’s the content you need to talk to them about.’”
In other words, far from replacing R.S. Hughes’ sales reps, AI gave them customer-service superpowers. Distributors need to deliver value to customers to stand out, and AI tools help reps do that without all the overwhelming manual work.
At ORS Nasco, AI “simplified the day in the life of our sellers,” according to Brett Dingwall, Director of Sales Technology. “We had so many different places they had to go and they were duplicating efforts all the time. Now they’re not wasting that time anymore. They get that time back to be proactive.”
Distributors who embraced AI have also described it as “keeping the flow going” and “changing customer relationships drastically.” Far from replacing workers, AI is actually helping companies build sales dream teams.
AI Makes It Easier to “Wow” Customers
Contrast that with a distributor that hasn’t updated its sales processes in decades. We recently shadowed a rep who was sent into the field with nothing but a spreadsheet. He had to parse through the spreadsheet, row by row, identifying which customers to prioritize, where customers are starting to slip, products the customer should be ordering based on historical patterns but have stopped, and any gaps in wallet share.
Even an expert analyst would need to pore over that spreadsheet for hours before making any decisions, but this sales rep was expected to do it on the fly. If he manages to deliver value to customers, it’ll be through sheer will and a lot of luck — and he’ll be under a lot of pressure.
Customers today really value a consultative sales approach. They want someone who isn’t just going to show up and take their order, the way reps have been doing for years, but someone who can be a partner to them — someone who will help them make their business stronger and more profitable. According to McKinsey research, 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when it doesn’t happen.
Even if a sales rep put in all the hard work necessary to fully analyze a big, complex customer spreadsheet, they’d be looking at what happened in the past, not predicting the future. But AI, with its predictive analytics capabilities, can help a sales rep anticipate their customers’ needs in a way they were never able to before. They can offer a level of service they couldn’t offer before. And they can distinguish themselves from competitors who still rely on the status quo.
With AI, sales reps can “wow” customers at scale without digging through mountains of reports or scanning endless spreadsheets. It makes them better at their jobs and indispensable to the customer.
When sales reps are simply reactive order-takers, there isn’t much to separate them from the vertical marketplaces that threaten distributors. But if you’re comparing a vertical marketplace to a sales consultant who shows up and says things like:
- Looks like you’re due to reorder Products X, Y and Z. How are you doing on those products?
- Here’s what similar customers are buying from me. Where are you sourcing these products? Should we talk about pricing? I think I can save you $X in shipping costs each month if you were to buy those from us instead.
- I saw your team was browsing Products X, Y and Z online, so I’m dropping off some spec sheets and information so you can dig into those a little deeper. If you have any questions about them, we can chat about those today.
Now that’s a rep that’s adding real business value.
With AI, Distributors and Their Sales Reps Have Nothing to Fear
I received this advice from one of the best salespeople I know: “People buy from you when they feel like you know something they don’t.”
With predictive analytics, a sales rep can know things about a customer that the customer might not even know about themselves. They can predict products the customers are due to order again and ensure a perfectly timed reorder. We’ve shadowed dozens of reps who had customers thank them for spotting low stock before they did and preventing a stockout. The customer is happy, the rep feels valued, and the distributor improves its business.
We recently ran an analysis at a $1 billion dental supplies distributor in which we segmented their sales reps into three groups. The top third used AI a lot, the middle third used AI a bit, and the bottom third didn’t use AI at all. The results?
- Regions using AI were growing sales 13% more than those who weren’t.
- Sales reps using AI were growing sales 9% more than those who weren’t.
None of the distributors we’ve worked with have eliminated their sales team in favor of AI. It’s safe to say that the “sentient killer robots” are neither sentient nor killer, but rather gentle giants that exist to make lives easier — and help distributors succeed.
Benj Cohen founded Proton.ai, a growth engine for distributors. His company’s mission is to help distributors harness cutting-edge artificial intelligence (AI) to drive increased sales. Benj learned about distribution firsthand at Benco Dental, a family business started by his great grandfather. He graduated Harvard University with a degree in Applied Math, and speaks regularly at industry events on the benefits of AI for distributors. Benj has been featured in trade publications including MDM, Industrial Distribution, and Industrial Supply Magazine. His company, Proton.ai, announced a $20 million Series A round of funding in 2022, led by Felicis Ventures.