Artificial intelligence (AI) is transforming how we sell. For distributors, there are personalization opportunities that can improve customer relationships and scalable processes that bring new sales reps up to speed faster. It’s all designed to help distributors work smarter and faster to generate more profitable sales.
Jonathan Bein, Ph.D., Co-Founder and Managing Partner of Distribution Strategy Group, recently spoke with some key players in the AI-powered technology space to find out how distributors can take advantage of these intelligent tools.
The panelists included:
- Chris Bauserman, Chief Marketing Officer, Conexiom
- Sandeep Anand, Head of AI/ML Solutions, Infor
- Jacobi Zakrzewski, Vice President, Technology & Strategy Solutions, Luminos Labs
- Chris Vanittersum, CEO, SupplyMover
Missed the webinar? Watch it on demand.
How Well Do You Really Know Your Customers?
Customers want to feel like you know their wants, needs and priorities. You win when you find the right customer pain point and match it with the right solution. How can AI help distributors figure out the what, why and when to reach customers?
Bauserman believes AI solutions create a more personalized experience. He said AI can “help target accounts and deliver the right message, the right pitch, which turns it from another spam into something of value.”
Vanittersum also sees AI as useful for knowing when and how often to contact customers. “It’s about prioritizing your day to maximize the ROI potential with those accounts, whether that’s a current book of business, reactivating old accounts or proactively contacting new leads. What I should do throughout each segment of my day is a big piece of that.”
Existing customers have a rich purchasing history but there are more efficient ways to understand what matters to that customer in the moment than digging through old invoices or computer screens. Vanittersum sees value in AI for “surfacing better data for that sales experience.” Traditionally, distributors run a blanket promotion and carpet bomb segments of their customer base. AI offers distributors a better way – similar to our grocery store experiences. “These days, they send you a mailer and it’s got the coupons for things you care about because you buy those products. If distributors can specialize communications to the things that each of our customers is most likely to care about, that’s where we’re seeing a lot of good connections,” Vanittersum said. With AI, you can also surface lookalike audiences from specific market segments to find customers who are more likely to be interested in particular products and services.
Key to personalization is the data itself. “I don’t know that technology is necessarily holding a lot of distributors back at this point, but maybe business processes and data are,” Zakrzewski said. Integrating an AI solution can bring disparate data together for a unified picture of what’s happening with customers – personalizing sales reps’ experiences, as well.
Zakrzewski said: “We see a lot of organizations treating internal team members as a customer base, serving up data like, ‘Hey, your customer’s doing this. Knock on their door, call them up.’” Some tools build out customer outreach programs on their own, based on past buying patterns, but Zakrzewski warns of the need for human oversight.
Personalization in eCommerce
Using the grocery store analogy again, Vanittersum says AI in ecommerce about guiding behavior online. “Imagine that you walked in and they gave you a set of shelves with exactly the stuff you cared about. That’s what we want to do for ecommerce.” Customers appreciate it when they log in, and your website reminds them to reorder or suggests products they didn’t know they needed.
“When the system is highly aligned with the customer from the customer’s habit standpoint, that’s how we find that the system is going to win because it’s automatically surfacing the things they care about, and that’s where they want to spend their time.”
AI prompts the right action, eliminating research or guesswork. Bauserman said AI could look at order history to spot trend changes that could have stemmed from a manual error. For example, if the customer suddenly changes where products are shipped or the cadence for a reorder is much shorter than the average.
Then, there is the element of automation — the standard for any AI solution — that frees up time. “If you look at a typical CSR organization and distributor or account management team, they’re probably spending half their time doing repetitive work, entering orders, sending shipment delivery updates manually and more,” Bauserman said. “It’s tough for them to think about building relationships if they’re trying to troubleshoot and process activity.”
Vanittersum added: “The cross-sell is fantastic, but the problem is getting the chance to talk about it. You can’t just go through a whole list of cross-selling items because it’s irrelevant. So, you must find careful times to suggest hand-selected items to surface.” AI can do this faster and more intuitively.
The value of AI goes beyond greater sales opportunities. Zakrzewski suggests these platforms offer real value around training. New sales reps often rightly struggle to learn the catalog; even experienced reps don’t know everything that is available. AI drives suggestions to sales teams to improve their performance without time spent scrolling screens.
Anand agreed with this best-use case for AI. He said: “Reducing the time it takes to find the item allows that customer engagement to bring them in – smart search is a low-hanging fruit of AI.”
AI’s Role in Creating Content
Generative AI in the form of ChatGPT and other platforms can help reps and others create content such as emails. These tools have considerably lowered the barrier, but distributors should be cautious.
Zakrzewski said: “Just because you can, doesn’t mean you should.” Sales reps can generate their own content, “but make sure that our brand and our content are consistent with our value proposition versus people going off and being cowboys. We need to be intentional.”
Vanittersum thinks distributors should govern generative AI within the framework of developing content around what their customer cares about. “For example, we could say, ‘Hey, it looks like you stopped buying such and such product from me. I want to let you know we’ve got a promotion on that right now, and if you’ve transitioned to something else, let us know.'”
AI solutions offer pattern recognition that pairs well with generative AI to create—not just content—but content that is meaningful to sales reps and helps customers. Vanittersum mentioned Expedia as the website to watch. “If you’re looking at a hotel, it summarizes all of thousands of comments into ‘customers like the beds but complain about the noise.'”
Amazon has a similar feature on customer product reviews. “That’s a super advantageous feature for distribution sales teams when they’ve got to touch potentially a hundred or more accounts daily. When I open that account profile, and I see a summary of what’s going on, it saves time. You don’t need to research customer behavior before making the call.”
Real World Wins with AI
These capabilities mean nothing if they don’t yield a real-world win. The panelists were asked by an audience member to provide some examples where applying AI to sales and marketing had an impact on revenue.
“We see a lot of wins with pricing in margin rationalization and dynamic pricing,” said Anand. “We see use cases with AI around managing inventory for optimal customer service levels. I think the concept of the right goods at the right time, place and price is where we see a lot of examples.” He said that distributors have seen added value in their upselling volume within 60 days.
Bauserman shared the story of a large industrial distributor considering AI to automate order processing and fulfillment. Their goal was to cut the order error rate in the field from 4% to 1%. “Most companies process orders manually. Our benchmark study showed an average total cost of errors per order was $18,000 when you include churn, reverse logistics and destroying inventory.”
Where Should Distributors Start?
The panelists believe ROI of AI is significant and measurable. For distributors, this leads to the logical question of what they to start.
Vanittersum said IT infrastructure depends on the company’s phase of life and business maturity. His organization created a roadmap maturity matrix on where companies typically start with their technology upgrade. “Each company and what they’re trying to solve today can be tackled in different ways depending on where they’re in their life phase. There’s a lot of solutions in the sandbox.”
However, organizations should only consider AI once they have an established set of sales processes with desired outcomes that work well for the business. “Once you have an understanding of the right way of doing things for your business model, now you want to take that and apply that into technology.”
Missed the webinar? Watch it on demand.
