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Why Data Sharing Leads to Improved Value for Customers

By Mark Dancer posted 03-24-2017 03:18 PM

  

Hello! I’m a new member of DAA and thought I would share some of my ideas about how data and analytics can strengthen a company’s channels. My expertise is around channel management and digital transformation … and I am very interested to hear the perspectives of data & analytic professionals. Please feel free to comment or reach out to me directly at mark.dancer@channelvation.com.

The following material is from my post on the Distributing Ideas blog at NAW’s Institute for Distribution Excellence. It is written for the perspective of distributors, but the ideas can work any company that goes to market through channel partners ...

With the adoption and use of digital tools by wholesaler-distributors, new possibilities for working with suppliers are becoming possible. Truth be told, the partnership between manufacturers and distributors has always been a kind of love–hate relationship. Distributors need products to sell, and manufactures need access to their customers. But, the threat of disintermediation by manufacturers has always been real, and supplier websites, inside sales, and other digitally enabled capabilities make going direct ever more possible. Manufacturers are concerned because distributors are leveraging videos, configurators, and other digital tools to lessen their dependence on suppliers for product expertise, and thereby potentially weakening the partnership.

Despite all of this, the fact remains that the case for partnerships between manufacturers and suppliers remains strong, although the basis for that partnership is changing. The most important rationale for manufacturer and distributor partnerships lies in working together to create value for another party – the customer. In doing so, both partners receive value in return while the customer receives value that would not be possible otherwise. This has always been true. There is nothing new in this argument.

What is new is that digital tools can enable traditional partnerships to create higher and higher levels of value for customers, through . Some of these methods go to effectiveness (better solutions of products and services) and others go to efficiencies (removing redundancies and excess costs from the value chain). Each partnership will have its own customized and unique executions, but the common ingredient is data – the data created by digital tools. By sharing data collected through CRM, distributors and manufacturers can better coordinate resources, speed time to market and improve customer satisfaction. By sharing data collected through marketing automation tools, manufacturers and distributors can better tailor their website experiences, video, and configurator assistance, and create a seamless environment as customers migrate from one partner’s site to the other and back again.

Of course, manufacturers and distributors both know that data, specifically customer data, is at the heart of conflict between manufacturer and distributor partnerships. Distributors want to protect customer data as their final defense for preventing disintermediation. Manufacturers jealously guard their own data about sales and especially margins, because they believe distributors will use that information to lobby for better prices to improve their own bottom line. But none of this matters. Digital tools enable disruption. If one set of manufacturer and distributor partners does not figure out a new way to collaborate around data, another will.

Or, look it from still another perspective. Online marketplaces (like Amazon) are a huge disruptive threat for both distributors and manufacturers. Alone, manufacturers and distributors may not be able to counter the threat. But, working together, there may be new possibilities.

One distributor described their efforts to drive new levels of collaboration and partnership:

 “One of our best suppliers asked all of their distributors to start using a specific CRM package. We did. We were skeptical at the start, but as we analyzed CRM data for this supplier, we began to find opportunities for the supplier to help us drive results faster. Because we managed against a sales process with win-rate metrics, we were in a strong position to ask for joint sales calls when they could make a difference. We went to other suppliers and convinced them that our use of CRM made us a better partner for them. Over time, CRM has dramatically improved our ability to proactively drive partnering expectations with our suppliers.”

This distributor is on to something: Data is the key to new levels of channel partnering. It’s a tough nut to swallow, but D comes before C – data before collaboration. Data sharing will lead to improved results for customers, justifying the need for ongoing and improved collaboration between channel partners.

The complete and orginal  blog post is here.

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Comments

04-06-2017 03:30 PM

I am working on this field as well, however our challenge is how to get alignment with our channel partners to feed Ecommece point of sales data back to us as a vendor. 

It it is a painful process to go thru

03-24-2017 07:39 PM

Very interesting Mark and thank you so much for bringing a new segment of commerce into the conversation.

Every article and every presentation at conferences about ecommerce have been about consumer sales. When “B2B” comes into the picture, it’s all about sales reps and Account Based Marketing. It’s been about ten years since I’ve been in a conversation about distributors and wholesalers and I’m a little surprised at the silence. Perhaps I’ve just been hanging with the wrong crowd   ;-)

I’m feeling this an area that’s been under-served by digital analytics and, therefore, ripe for disruption. I’d be very interested in putting together a call with you, where those of us working for wholesalers or distributors (and those who have wholesaler or distributor clients) could brain storm about the potential competitive advantage of the analytics of combined data.

Show of hands - how many of you are working in this area?

Jim

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