Dave Baiocchi The CX
The primary task in the distribution business is to care for the customer and meet their needs. This is an indisputable fact. A wise man once told me that “NOTHING happens until something is SOLD”. Selling, however, used to be a much simpler process. In days past, the customer purchased equipment. It was our job to demonstrate to the customer that our brand, its capabilities, and our support team were the best fit for their needs. If we could prove that…. we usually got the order.
Things are not so simple anymore. Our transactions with clients are no longer so one-dimensional. Where in the past the customer was looking to simply purchase equipment, both the customer’s needs and our offerings have now evolved. It used to be that we had customer “presentation opportunities”. This was our singular opportunity to create our best “pitch” and gain an advantage. Over the years, our customers tired of the “pitch”. They no longer want sales presentations. In fact, they no longer want to purchase equipment. This started the industrial movement away from self-sufficiency, and toward core-competency.
An example:
If my customer bakes cookies for a living, they naturally want to devote all of their time, energy, creativity, and attention toward baking cookies. Everything else involved (packaging, storing, and shipping the product) is NOT BAKING. These may be necessary functions, but they are not the core competency. Customers discovered that there are other organizations that have a core competency that involves these functions….so, “let’s partner with them to do that…so we can bake cookies”. This is where the 3PL business was born. Manufacturers wanted every square inch of their plant floor dedicated to manufacturing. That desire to focus on core competency gave rise to an entire industry.
Even the 3PL business has a point of focus, and (surprise) it’s not about forklifts. Their core competency is getting the products delivered to their final destination as cost-effectively as possible. They want to invest their time, energy, creativity, and attention to material flow, logistics, and transportation. Once again, they want SOMEONE ELSE to care for the equipment fleet.
The evolution in our customer base toward core-competency has shifted our primary encounter with customers away from “selling equipment” and toward “building advisory relationships”. In order for the dealership to secure repeat customers today, they have to do more than represent a good OEM, have a sales story to tell, and train their techs. They have to expand their discovery methods to truly craft customer solutions that are SPECIFIC to the objectives of each individual customer. They have to design relevant and accurate fleet reporting, then, schedule regular meetings where real-time data can lead to meaningful fleet decisions.
Relationship selling requires constant visitation, ongoing discovery, and a focus on continuous improvement. No more pitch-and-close. No more one-and-done. We are no longer hired to provide equipment, and bill repairs by the hour. This is a much deeper offering, that will require us to satisfy a new set of expectations. The new standards will include:
- Optimized solutions
- Accurate operational reporting
- Specific actionable advice
- Ability to adapt to real-time change
- Ongoing communication
- Trackable cost reduction
This means consultative partnering can’t be reserved in the purview of the sales department. As I am fond of saying…” the customer couldn’t care less about our departments”. He wants our solutions to be seamless, efficient, almost invisible, yet so valuable that the fleet nearly “pays for itself”. Every customer-facing department and employee has to understand what is at stake, and how the expectations have changed.
The new B2B buzzword today is the “Customer Experience”. You may have seen the new acronyms float through your Linked-In feed. The “CX” (customer experience). The “ICX” (interactive customer experience). What is the CX?
The CX is simply a model for customer interaction that not only engages customers with products but also establishes an emotional connection with them. It uses a hierarchy of connections that starts with providing data, moves into actively resolving primary needs, then continuously resolving ongoing needs in a way that engenders customer confidence on a long-term basis. The CX informs customer interaction at every level, and every customer-facing employee is trained to support the objectives of the CX.
Is building a CX platform really necessary in our business? The short answer is YES. The reason is that our customer’s needs have so drastically changed, that we need a way to orient our resources and ensure that our practices actually support the new expectations. Some organizations have an entire team, including senior executives, that actively and continuously manage the CX. I’m not talking about computer companies or clothing stores. I’m talking about forklift dealerships.
One notable example was created by Associated Integrated Supply Chain Solutions, out of Chicago. Shari Altergott served as their VP of Customer Experience and crafted a CX solution that resonated so well, that she started her own firm to help other organizations replicate CX success. Her company – The CX Edge, now assists dealers (and others) with focused customer interactions that are consistent with the goals of their CX objectives. When asked about the Material Handling Industry’s adoption of CX initiatives Shari had this to say: “While the Customer Experience is nothing new to this industry, in fact, many MH companies have grown their business through deeply personal relationships with clients. However, some have been slow to embrace how buyers and these relationships have changed over the last 20 years. We need to begin to look at the Customer Experience as a measurable strategy with goals and investments instead of an ideology.”
Many of you already have an active CX. Many of you do not. Like it or not…this is the new business model. Expanded discovery, customized solutions, and the investment of time and attention to ongoing customer requirements maybe feel awkward and unsettling. Each department will need to adopt new processes and re-think their customer contact practices.
Next month, I will continue this series and suggest measures that each department can take, to position themselves to actively manage their CX.
Dave Baiocchi is the president of Resonant Dealer Services LLC. He has spent 39 years in the equipment business as a sales manager, aftermarket director, and dealer principal. Dave now consults with dealerships nationwide to establish and enhance best practices, especially in the area of aftermarket development and performance. E-mail [email protected] to contact Dave.
