By Bill Wade, Wade & Partners
Your brand statement encompasses your company’s beliefs about your competitive edge. It’s your company mantra. Many distributors proclaim something like, “Our good people deliver good service” (ATA’s unfortunate Good Stuff… Trucks Bring It!).
Fine, but most companies don’t have measurable, customer-centric service excellence that could help them earn a dominant share of accounts, have the firmest prices or become first-choice for supply chain partnerships.
Do you have a plan to power your brand with service excellence? Whether yours is a big warehouse in a warehouse district and an outside sales force or a single branch where the freight yards are, your future has been here in other channels for some time.
Your Future Is a New Service Promise
A promise can be easily understood be an ‘IF, THEN’ statement. IF your customer buys all they can from you, THEN you will:
- Lower or optimize all 11 elements of total procurement cost, including price;
- Minimize employee downtime costs due to avoidable stock-outs;
- Maximize uptime and on-time productivity for better customer satisfaction and retention;
- Be able to partner in a continuously-improving, win-win, supply chain relationship;
According to distribution guru Bruce Merrifield, this pattern has been around for over 60 years! “McDonalds started partnering with its distributors in 1956, many that they still have today.”
Bruce further notes “In the 1980s, entire retail channels switched to integrated, sole supply contracts (drug, grocery). In the 1990s the hospital supply channel went the supply chain route. And, the biggest accounts in other channels have been increasingly migrating to supply chain buying solutions since the mid-1990s.”
Do All Customers Want Replenishment Partnerships?
No! Supply chain partnerships work only when both parties can realize, co-create, and share system savings. I think that no more than 10 percent of heavy-duty truck parts and service customers and distributors seem willing and able to synergize… no more than 15-20 percent at the manufacturer-to-distribution level. All others increase costs by struggling over price.
For both the supplier and parts distributor (including heavy-duty vehicle dealers), the customers who are ripe for win-win partnerships are:
- Ambitious, innovative and growing fast
- Open and progressive
- Already giving you big net profits to offset your losing accounts
These customers have ready-when-you-are capabilities (including team selling), so you can grow with them instead of a competitor.
How to Upgrade Your Partnering Capabilities
To partner you need an augmented product, with features like this (in this order):
- One-stop shopping with the highest guaranteed fill rates
- Basic service excellence, including zero errors, 100 percent on-time delivery, plus five or more service metrics tuned to the customer and/or their niche
- Extra services to sell, install, maintain, and improve supply-chain math-based solutions
To become customer-centric, retune these components guided by deeper insights from additional customer-needs research and customer-profitability analytics at the line-item level. Providing standard service with rep-does-all coverage just can’t win.
Bill Wade is a partner at Wade & Partners and a heavy-duty aftermarket veteran. He is the author of Aftermarket Innovations. Contact [email protected] or [email protected] if you’d like to discuss these concepts further.
