For B2B Distributors: The risks of change vs. staying the same

Over the last two and a half years, I’ve spoken with sales leaders and executives from over 300 Distributors. All are considering ways to improve their sales organizations, and most are moving away from donut drop-offs and reactive customer relationship management.

The shared motivation during early conversations is to figure out fit. Is Proton’s software a legitimate solution for this specific company and its growth objectives? Will it make their Sales or Customer Service reps more productive? And will it work given the nuances of their business? It’s in everyones best interest to proceed only when the answer to each of these questions is a resounding “Yes”.

What’s interesting is how often the answer is “Yes, but…”. The “but” always represents the abstract cost of moving away from the status quo — which I admit, is hard to quantify. And I think that’s what gets in the way of Distributors being able to make stepwise improvements that transform their businesses over time.

Proton provides Sales AI (which uncovers cross-sell & upsell opportunities, product affinities like similar or related items, and helps prioritize customers that need attention), and a purpose built, low-admin CRM built for B2B Distributors. Even though I’d boast the simplicity of Proton’s product, it is a transformational software. It will change the way your sales team operates, and it will change the experience your customers have with you. Transformation is intimidating. So in those early exploratory conversations with Distributors, the common versions of “Yes, but…” that I hear are:

• Yes, but my Sales Reps are old school. They’re pen and paper. Getting them to track their activities or use software to find sales opportunities is a nightmare. I see how this could work for a lot of Distributors, but I’m worried about change management.
• Yes, but my Sales Reps are already inundated by a bunch of tools and systems. I’m trying to make their lives simpler, not more complex.
• Yes, but my Sales or Customer Service Reps are order takers. They aren’t really sales people. They’re not comfortable pitching products during an email interaction or phone call with a customer.

Below are the questions I think every Distributor needs to answer to figure out if the “but” — the cost of the status quo — is affordable.

Assessing the risk of staying the same:

For Distributors with old school salespeople, ask:

• If we don’t motivate and hold our sales reps accountable for tracking customer relationships and finding new ways to generate sales opportunities in a system like Proton, how will we close our tribal knowledge gaps? How much tribal knowledge will become completely lost when our reps leave or retire if we don’t do something about it now?
• When we recruit or promote new sales reps, what will they expect from us? Are pen and paper and legacy systems like ERPs and janky CRMs acceptable to great talent? How much talent will we miss out on because we’re unable to provide great, supportive tools to them?
• Assuming our competitors are making upgrades to more modern Sales Enablement tools, how soon will the customer experience we provide become obsolete?

For Distributors that are already inundated with systems, ask:

• Why does our commercial team have access to so many systems in the first place? Distributors typically have a hodgepodge of software systems or tools, each primarily good at one or two things in a world where reps do tens of things. ERPs are the backbone where quotes or transactions are made. PIMs or Ecommerce sites become the source of great product data. CRMs are a repository for customer information. BI tools help visualize data. This list goes on… Is it possible that consolidating more info and tasks into the right system would lower this system complexity rather than intensify it?
• Have we chosen the right ‘single screen’? A lot of Distributors worry about the ability for a Sales rep to manage multiple systems or screens, so they double down on a vision to make their ERP or a generalized CRM the source of truth. It’s a compelling vision, but have we done our diligence to ensure the ‘single screen’ we choose is the most strategic and effective one? The most productive Sales reps do not operate primarily out of an ERP.

For Distributors whose “order takers” are uncomfortable with the idea of pitching products, ask:

• What does great customer service look like nowadays? Is it not the duty of our Customer Service reps to deliver great experiences? And is it not the new normal for customers to expect helpful recommendations from their Distributor? Will my customers leave if they know they can expect more personalized attention elsewhere?
• How big of an impact would “order takers” becoming “order makers” have on our business? During phone call and email interactions with customers, could we meaningfully increase order profitability by pitching re-order reminders, recommending an add-on item, or following up on an item the customer browsed online or has an open quote on?

Assessing the risk of transformational change:

In a lot of ways, the status quo has worked for Distributors. Many are 20, 50, 100+ years old and haven’t pursued dramatically progressive innovation to get there. So it’s reasonable to ask what the cost of transformational change might be.

For Distributors considering transformational change, ask:

• How much would it cost us — both financially and culturally — if we roll out a new technology like Proton for a year and it doesn’t work? What is the sum of IT resources expended, budget used, Management and Rep attention, and cultural back and forth? We’ll call that sum the ‘risk’ of trying something like Proton. What is our total ‘risk budget’ that we’re willing to expend in our efforts to stay competitive and get ahead?
• What is the forecasted or potential upside that this vendor is claiming we’ll receive? If there is a strong possibility we will get >$2 in margin plus sales productivity gains for every $1 we spend on the software within the first year, can we agree this is worth spending the ‘risk budget’?
• Does the risk of staying the same compound? Assuming the upside from a technology like Proton is possible for our business, what is the opportunity cost of waiting 3 months? 6 months? 1 year? 5…? Does this growing opportunity cost justify re-allocating light IT resources to the project now instead of later — or, famously, “after we finish our next big ERP upgrade”?
• Do we have Sales or Customer Service Managers that can be accountable for championing this change? To win, we need to adapt. To adapt, we need sales leadership that is open-minded and can get on the boat.

I do not insist that the answer for every Distributor is “Yes, change!”. I would just insist that these questions deserve airtime, and that ‘Yes, but’ should not be the end of the conversation. Bring these existential questions to the table, have the conversations, consider how these decisions impact your legacy, and see if there are ways to de-risk whichever path you take.