Tuesday, April 28, 2009

What Drives Distributor Performance

What drives competitive advantage? Affiliated Distributor members regularly outperform the general market. Something like "8% greater growth than the market year over year" has been reported.

AD uses incentives to encourage their members to build a proactive sales process. Things like vendor planning sessions, targeting competitive accounts and use of modern techniques in the daily operation of the business all come to mind. AD distributors were among the first to use electronic and email communications back in the 1990's.

Any reasonable person involved in Distribution understands that we have a problem with data synchronization. As we move into the future, data needs to migrate from manufacturer to distributor to customer and back again - seamlessly, efficiently and without costly human interface.

I believe that any distributor who develops this skill ahead of the market will have a competitive advantage. And, this advantage will turn into market share on the other side of the recession. Unfortunately, many distributors are paralyzed by the economy. Any efforts to build long term competitive advantage are sacrificed in the name of the recession.

IDEA and Affiliated Distributors just announced a Pilot Program that will once more incent AD distributors to put a process in place ahead of the pack. Modern Distributor Management reports,
"IDEA had been working with four A-D members over a 60-day period to help both organizations define the scope of the program – which is exclusive to A-D for the 2009 calendar year. IDEA will introduce the program industry-wide after an A-D pilot program is completed."

read here

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