Our last disruptor in the distribution series lands on a topic that can be overwhelming for many small to midsize distributors. Last year, we highlighted the fact that marketing was driving the buying cycle as a disruptor. This year, the marketing disruption goes deeper as distributors attempt to compete with the sophisticated, data-driven techniques adopted by larger distributors, B2C brands entering the market and of course, Amazon.
There’s no getting around the fact that strong data practices, including personalization, provide huge competitive advantages. Understanding historical and current customer behavior from a digital perspective is vital to influencing more of that desired behavior in the future. In addition, the bar continues to be raised in terms of customer experience as more people within B2B bring their personal buying expectations into their professional lives.
Facing competition from brands with a more robust track record of data-driven marketing can seem daunting, particularly if the distributor is not as digitally mature. Although the first reaction may be to start evaluating expensive technical solutions, we’ve explained earlier in this series why buying a sophisticated marketing stack can cause even more disruption. Distributors may also rely on manufacturers to provide desirable data about target audiences. Yet as manufacturers contemplate direct sales, as well as evaluate the digital readiness of their distributors, relying on this channel for data may not be a good idea either.
Data-driven marketing practices exist to help predict the behavior of a target audience. Information about target audiences then helps craft digital strategies that can influence and accelerate the desired customer experience. Frankly, smaller companies cannot compete on the concept of big data. The good news, however, is that they don’t have to.
In reality, small to mid-sized distributors have a massive advantage over their bigger competitors. They’re closer to their key customers and already have a great deal of information to begin successful digital marketing practices. They just have to follow some simple steps to building a comprehensive, centralized data source.
The first step involves gathering data from multiple sources. Most companies have siloed data because they have siloed departments. Identifying each customer touchpoint within the buying cycle can help determine where these islands of information exist, both online and offline. For small to midsize distributors, offline information gathered from sales, direct marketing efforts and other sources can often be the most valuable. The effort to gather this data, and build processes that update the data both digitally and manually, should be the primary focus when tackling this disruptor.
In addition, the fact that smaller distributors are closer to their customers is key to identifying audience segmentations, defining targets from a digital perspective, and creating personas. For large distributors and other competitors with thousands of customers, a significant amount of time is spent testing and looking for the right approach that will deliver the best conversion rates. For smaller companies, this knowledge has already been gained thanks to their deeper, more personal customer relationships. As a result of more concrete knowledge and fewer assumptions, digital marketing tactics often succeed more rapidly for smaller distributors.
Once a data-driven strategy is set in motion, it’s important to choose technology that is built to handle it. Any technology chosen to support data driven marketing, particularly for growing distributors, has to provide some key components right out of the box including:
- A CMS that allows marketers to manage unique user information and drive strong user experiences
- Dashboards and/or consoles that are easy to understand and use, so that managers don’t have to play the roles of data scientists
- Catalog management that is customized for specific buyers, enabling more efficient search
- Integrated promotions and merchandising capabilities, to help grow both share-of-wallet and productivity
- Personalization engines to create unique customer experiences with high value, that are highly efficient
An important note when turning this disruptor into opportunity is that data-driven marketing needs to support a hybrid B2B commerce experience. Remember that B2B buying cycles are rarely 100% online or full service, for that matter. A strong data-driven marketing strategy must acknowledge that both the eCommerce system and the people of B2B require information to do their jobs well. Creating strong feedback mechanisms in which data is continually updated is the final key to successfully incorporating data-driven marketing tactics into an effective, competitive B2B commerce strategy.
Did you miss the other disruptors for distribution in 2019? Click here to learn more about the hottest trends hitting the distribution industry this year.