The biggest challenges facing the distribution industry

Keeping low carrying costs, high sales order fill rates, and managing to maintain returns are some of the main KPI’s for distributors. To keep hitting those targets in 2018 and beyond, distributors need to prepare for the following evolving challenges that are impacting their industry.

1) Changing customer expectations

With customers being able to purchase so much online, they are getting used to same day shipping, which means their expectations for receiving your product are similar. Your customers, along with retailers, also want to pay less for more, but your operating costs continue to climb. You need to find a way to deal with these changing expectations, to keep your customers and retailers happy.

2) Increased competition

With everything becoming more accessible, it means distributors now have more competition than ever. Manufacturers are bypassing the wholesale distribution channel and selling direct.

3) Poor data infrastructure/Outdated lead management processes

When distribution networks become too big, you need to be sure you have a solid lead management process. The lack of a standardized lead management process will lead to wasted time, lost sales and upset customers. By not having all the information you need at a glance, you will inevitably keep customers waiting, resulting in lost sales and poor customer service.

The same can be said for distribution companies using several different programs to manage their leads. When employees are using more than one tool to track customer information, a considerable amount of time and resources are spent tracking and consolidating information, rather than closing leads and servicing the customer.

How lead management software keeps distributors performing

Investing in new lead management process takes time, but when done properly it will not only pay for itself, but allow distributors to stay competitive in the new economy and grow.

1) Rich customer data allows to distributors to better predict future customer demand.

Having a complete history of your customer purchases year over year is imperative when planning inventory. Being able to understand customer demand impacts your inventory control and puts you ahead of the curve by being prepared. Keep track of all customer purchases, sales and lost sales so you can better forecast your inventory levels.

2) Better understand your customers’ needs

Being able to better understand your customers’ individual needs gives you an advantage with your competitors. Customer retention is made easier when you aren’t making assumptions on what your customers’ or retailers’ needs are. A CRM software allows you to better track those needs on a case by case basis, giving your customers top of the line service, which brings them back time after time.

3) More time for what’s important

Having all your customer information in one centralize place, and being able to have that 360 degree view of your customers and leads, you’ll be able to spend more time on what’s important. Rather than spending valuable time tracking down data and guessing why a customer’s sale was lost, you can access that information within your CRM in an instant, and move on to closing leads and growing your business.


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Posted by Rodrigo Fernandez

Hey there! As Method's Director of Marketing, I have a natural passion for building and designing solutions that enable revenue growth from a customer acquisition perspective. When I'm not at Method leading the marketing team and making fun videos, I am grilling and travelling with my wife and three children.