Why Having A Good Distribution Strategy is Important for Building Customer Relationships
by Black Ink Team
Whether you are making outdoor power equipment, motorcycles, kitchen appliances, or anything else that’s complicated and heavy you need a reliable way to get as many of your products to as many of your customers as possible. Some companies sell their products directly to their customer, whereas others deploy ‘indirect’ means of distribution – in other words, other companies sell their product for them. Before an end user buys a product, it may have changed hands multiple times; it may have first been sold by the manufacturer to an independent wholesaler, who then sold it to an independent dealer.
The distribution method your company uses should match its requirements. There are many factors to consider, such as what the demand for your product is, where your customers are located, how often your product will need to be replaced/serviced, and more. Take Apple, for example. Their smartphones would probably not do so well if everybody who wanted one had to trek all the way to California to buy one in person. Conversely, a very high-end sports car manufacturer may be able to attract enough willing customers to make a direct, single-location strategy work.
Distribution networks can be measured in multiple ways. One is the scope – how far-reaching it is and the number of products it can facilitate selling. Another is the flexibility – how difficult it is to change the geographical locations that the products are going to and which products are being sold. The ‘reversibility’ of your distribution is an especially important quality for it to have in the event that you must issue a recall. You can also measure distribution networks by how possible it is to use them to satisfy individual customer demands. Say you run a company that has its own delivery trucks. In that scenario, you could make last-minute changes to delivery routes until the cows come home. But, if your company hires someone else to deliver your products for you, you are at their whim and may end up incurring additional costs.
In a B2B context, distribution can either be a competitive advantage or a weak spot. Customers appreciate and may even pay a premium for deliveries that are on-time, customized, and error-free. But no distribution apparatus is perfect; sometimes a shipment gets lost or delayed, and you must inform your customer of the situation. Furthermore, whenever something goes wrong for a customer buying your product, it pays to keep a record of it because that customer will probably expect to be treated better later as a result. A CRM can help your sales teams keep your customers better informed, and can also serve as a comprehensive record for when unfortunate mistakes get made and amended.