The manufacturing industry has seen significant disruption over the last ten years or so, especially in the way companies manage their approach to trading – from the move to customer self-service, to the evolving role of distributors in the sales ecosystem. Such disruptors are the direct result of digital transformation in the manufacturing sector and the accompanying growth in B2B eCommerce. However, in our experience, these disruptors are better viewed as business facilitators that need to be integrated into your business model to maximise their value. Let’s take a closer look at some of the challenges that come with business disruptors and how we can turn them into business opportunities.
Manufacturers with stockist or distributor networks need to adapt to an increasing desire by end-user customers to have greater control over the purchasing process – which usually centres around the ability to bypass resellers and buy direct. Larger customers that struggle to find additional value in their relationships with distributors and prefer to buy directly from the manufacturer often drive this disruptor. With increasingly sophisticated eCommerce platforms that integrate with business and accounting systems like Sage or Pegasus, manufacturers can provide a smooth and seamless experience that’s highly customised to individual customers.
Selling direct to end-users also has additional benefits, such as collecting data from customers to inform product development, improve personalisation and enhance the customer experience, and fix operational issues before they become business problems. However, it is important that manufacturers give careful consideration to the implications of the direct sales model before making their move. They must weigh up the benefits of data ownership and the potential for increased margins, against the strength of any customer relationship that distributors may have forged and the added value they bring to those relationships.
Customer demand for changes in the way manufacturers approach pricing is another disruptive challenge. Traditionally pricing for manufacturers’ products has been a complex, manual process based around the creation of individual prices for individual customers. This is time consuming, inefficient and error-prone. By embracing eCommerce that is fully integrated with existing business systems, pricing can be simpler and more transparent, based on the information for each individual customer account already held in Sage or Pegasus. Switching to a faster, more dynamic technology-based solution delivers a step-change in support and adds value to business relationships by enhancing the customer experience.
Getting to grips with the changing role of the business-to-business sales representative is also a potential disruptor for manufacturers. Automated sales processes and the self-service customer experience have now put marketing at the centre of the buying cycle, while the sales role is more of a support offering. Consequently, reps must be prepared to offer consultative advice and customer support at any stage of the sale process and play a particularly important part in selling higher ticket items. They also have the chance to optimise up-sell and cross-sell opportunities. In reality, sales and marketing functions must be more closely aligned to ensure a streamlined customer experience across a multitude of possible interactions.
Perhaps the biggest disruptor in the near future for manufacturers and wholesalers will be the Internet of Things (IoT). Smart, fully automated factories managed using real-time data received from machines, and in-field products transmitting a constant flow of information that predicts performance and operational issues are set to transform B2B buyer-seller relationships and open up opportunities to deliver new services across the entire customer journey.