Customers are calling for more personalized experiences in what can be a cold impersonal online universe. Customer experience (CX) and digital experience (DX) are used to measure these digital interactions.
But Harvard Business Review says, “Unfortunately, many organizations have it backwards: They start with the technology and then back into customer understanding. Their unending question for operational efficiency is prioritizing automation over customer empathy—and that is a problem.” Their point is that without compelling CX/DX upfront, the software will fail from the customer’s perspective.
Ian Heller, Founder of Distribution Strategy Group, hosted a Technology Leader Panel of experts on “Navigating the Digital Customer Experience Frontier in Wholesale Distribution.” The panelists included:
- Dave Bent, Senior Vice President of Operations, ECI Software Solutions
- Alex Timlin, Chief Customer Experience and CRM Advisor, Customer Success, SAP
- Jason Hein, for Bloomreach, and Founder, Acumental B2B
Heller pointed out the reality of CX/DX: “Most distributors haven’t done a good job taking their physical value proposition and extending it to the web.”
Missed the conversation? You can watch it on-demand here.
Defining CX/DX—Who’s Winning the Experience War?
What makes a great distributor in the digital space? Bent thinks it’s the “service level proposition.” He continued:
“For me, it’s stepping back as a distributor and asking a simple question: What interactions am I having with customers that I could digitize but not degrade the relationship experience? That’s the foundation.”
Timlin mentioned the Breakthrough Beverage Group, a North American beverage wholesaler and distributor, as an example of successful CX/DX.
“They are the trusted advisors to restaurants and bars. They help people navigate how to get the right amount of inventory at the right price so that the business makes margin.” He said the business has done a nice job of answering the question, “How do I supply 200,000 or 300,000 small businesses with technology that allows them to change an order or reorder without needing to make a phone call or send an email?”
The trick for distributors, Timlin said, is to focus on lower-value transactional tasks to free up internal account managers to become trusted advisors to their customers. While technology vendors may focus on the features for distributors, they may miss how these tools interact with human customers on the ground.
“You need smarter, more enabled humans to have those relationships. Otherwise, there is no differentiation,” Timlin said.
Hein said distributors’ customers have two moments: an “uh oh” and an “ah ha.” But the uh oh, or the problem they’re trying to solve, is complex. For example, customers don’t just need a motor; they need a motor, a bushing and a housing.
“Technology today moves us beyond just an order pad to, ‘Hey, do you need this? Here’s the nut, here’s the bushing, here’s the lubricant.’ We’re helping customers solve their whole problem, not just the thing that’s created the uh-oh moment. They trust us to have the product, they trust us to know which ones are the right one. If we create experiences online that are inconsistent with reinforcing that trust, that’s where the relationship starts to break down, and that’s where we lose customers.”
Smaller Distributors and CX/DX—Staying Competitive in an Amazon World
A webinar attendee posed an important question: “How can small distribution companies compete with Amazon and other platforms like build.com?” The answer is that small companies have a big advantage over these behemoths because they take the time to understand the needs of customers and the industries they serve.
Timlin said small companies must define, “How do we differentiate beyond a transaction?” While small distribution companies cannot provide a more efficient ordering experience than build.com or Amazon when a customer understands what they’re buying, he suggested small companies have the advantage when customers don’t understand what products they need.
Amazon offers a transactional experience, and “the small distribution business model is fundamentally different. Don’t compete on the transaction; compete on the education and the value piece and look at how you win the lifetime of the customer and the lifetime of the next project. Not just how do I give you the product you need as simply as possible? It might sound counterintuitive, but you won’t win on that game.”
Hein agreed. “Gen Zs and Gen Alpha, the next generations coming up, their BS detectors when it comes to digital are very finely honed.” He said these generations understand when they search on a site like Amazon that the results are influenced by paid search. “So, if you want to compete with Amazon, then compete by knowing what the right product for customers is. Small distributors can demonstrate that genuineness, that authenticity by creating a digital experience that demonstrates you have expertise.”
Technology to Drive a Better Customer Experience
When distributors adopt technology to improve CX/DX, a few critical steps can facilitate seamless integration. Let data drive the change management and decision-making process, Hein said. “The way you evaluate and make decisions for digital is different. You may have relied on your experience and anecdotes in the past. But it’s so important for companies to learn how to become driven by data” during software implementation. He recommended setting up a pilot and a proof of concept, then creating rigor by A/B testing various features to ensure your success.
“The magic of digital is that we can try it for 5% of our traffic to see how it works. If it doesn’t, you roll it back.” The ability to implement these tools incrementally can improve customer experiences instead of creating a big-bang implementation that ultimately turns into a business disruption.
Bent’s company distilled these concepts into three critical areas for distributors to focus on:
- Have great data and content. Is the product data in your ERP clean? How rich is the content about your products (pictures and descriptions)?
- Connect and integrate with your ERP so that product and customer data flows over in real-time.
- Make sure you have a team that understands the ins and outs of B2B eCommerce.
“It’s about the use case,” Timlin said. “Look at what’s in it for your customers and business users. Where’s the pain point for your service team, for sales, for your accounts team that you can resolve, and what’s the pain point for your customers that you can resolve?”
The Need for CX/DX User Groups in Distribution
Distributors need a learning community around CX and DX technologies. While distribution-themed conferences are excellent for solutions and capabilities, users need to share real-world experiences and best practices. “Who do we learn from, and where do we start looking at the good ideas, what are the bad ideas, and what are the learnings?” Timlin said. “Because half of the transformation that’s happening in this industry is how the changes are affecting the customer’s customer, as well.”
Bent said his organization gets a lot of requests for: “Hey, can you connect me with another customer that kind of looks like me?”
Hein agreed: “There is still a need for people to apply the functionalities of these platforms in a way that makes the most sense for your business. It’s in the way we solve problems and build relationships; where it gets nuanced is how do we use technology to help build those relationships, to validate the trust that our customers are putting in us?”
Want the full experience? Watch the webinar on-demand.