By Bob Linderman, Director, Strategic Account Management, IBC
In this blog series, we’ll be exploring how independent distributors can leverage their pooled abilities and efforts to service larger regional and national accounts. In Part 1, we’ll explain how IBC helps distributors centralize their operations for the customer to standardize pricing and consolidate billing. Part 2 will outline five best practices that lend themselves to an extremely cohesive national account program.
With competition coming at the distribution industry from all angles right now, having a solid customer base comprised of a good mix of company sizes, industries, and verticals, is one of the best ways to ensure a steady sales pipeline. To get the most out of those pipelines, independent distributors should look to integrate both regional and national sales accounts into their business models. The former focuses on working with other distributors to service a specific customer on a regional level, while the latter widens the scope and finds a group of companies working to fulfill the needs of larger, multi-location (and even global) customers. By pooling their efforts and fulfilling one or more aspects of a customer’s needs, independent distributors can effectively leverage their strengths while providing service and support levels that the big box retailers can’t touch.
Having special contracts with large customers isn’t a new concept for independent industrial distributors, many of which have been successfully working together to fulfill the needs of large clients for decades. Both national and regional accounts come into play when a large customer has needs that outsize the capabilities of a single, independent distributor. By leveraging the “power of one”, and by centralizing purchasing, payment, and support operations under a single umbrella, the distributor effectively creates a win-win proposition for itself and for its customer. Instead, of having to write multiple purchase orders, field multiple invoices, and write multiple checks to dozens of different vendors, for example, the customer uses the centralized, national or regional account setup to work with a single entity (which, in turn, is supported by multiple distributors). In addition, to centralizing its purchasing, invoicing, and payment operations, the customer wins on another, rather significant front: the ability to tap a technical and sales knowledge base that only a group of reputable, independent industrial distributors can provide.
Leveraging IBC’s “The Power of One”: Centralizing purchasing, payment, and support operations under a single umbrella, the distributor effectively creates a win-win proposition for itself and for its customer.
IBC is seeing continued interest in national accounts on the part of large customers that want to purchase multiple product and/or lines of products from a single source. This trend creates both opportunities and challenges for independent distributors. On one hand, the enterprising distributor that steps up to the plate, bids on, and then ultimately lands the national or regional account comes out a winner — but they must have a plan and the infrastructure in place to service the account. On the other, the existing distributor that opts out of the process can quickly find itself written out of the relationship. It’s the phone call that no company wants to get: you’ve had the account for many years and serviced it on a 24/7 basis, only to have your customer consolidate its purchasing operations to a far-off corporate office. What do you do? Mourn the loss of your long-term customer, or find a viable way to keep it onboard?
National accounts aren’t just for distributors that are trying to save existing relationships by broadening their scope. In fact, they can be a particularly great tool for landing that account that you’ve been calling on unsuccessfully for years. You know the opportunity is there, and the potential customer isn’t happy with its current supplier, but you just can’t seem to break through the barrier. Enter the national or regional account system — a setup that allows you to gather a strong team and strategize on how to win that elusive customer. Let’s say the targeted end user is unhappy with its current supplier’s performance. Now, you don’t actually know what’s going on behind closed doors, but you do know the dissatisfaction exists. This is the perfect setup for a strong team of independent distributors to make their entrance and show the customer how they can do it better, provide more, cover a wider scope, and otherwise beat the competition. Independent distributors can either start making these moves now, expand on their current efforts in this area, or wither away as they hold out hope that the “old ways” of buying and selling industrial goods come back.
The follow-up blog post in this series will explore 5 best practices of a strong regional and national accounts program, so stay tuned!