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It’s been reported that the well-known Aerosmith song, “Dude Looks Like a Lady” was conceived after Steven Tyler, lead singer of this iconic group, saw Vince Neil of Motley Crue in a bar.  At the time, Vince had a lot of long, blond, luxurious hair.  (Now, remember, this was during the mid 80’s when big, bold hairstyles were the rule for everyone – male and female.)   It’s also been reported that Vince was quite flattered when he was told that he was the impetus for the song.  And, we all know the wonderfully funny movie, Mrs. Doubtfire, which follows a recently divorced actor who dresses up as a female housekeeper to be able to interact with his children.   Now, please let me make it clear that I am one of the most politically correct people I know.  What follows is not an opinion on gender identity, but an opinion on customer identity and intimacy.

So, what does this song and movie have to do with customer intimacy?  As it turns out, quite a bit.

The underlying notion of the phrase “Dude Looks Like a Lady” is that something is not what it appears to be upon initial observation.  In speaking with many wholesale distributors around the globe, most tend to believe that they know their customers quite intimately.  Yet, upon further investigation and observation, they find many whom they really don’t know or understand at all.

So, how can we overcome this challenge?

One way is to throw people at it – a costly solution that is not very sustainable.  Yes, your sales representatives and customer service agents can spend more time with customers, dig deeper and report back to the leadership team, but this information only goes so far for a short period of time.  Instead, why not consider using the wealth of data you already have in house to gain a deeper, sustainable and perhaps most importantly, unbiased view of your customers?

A first step in this process is to stratify your customers, much like you already do with the products you sell.  This stratification can identify which customers are most profitable, which are least profitable, and which fall somewhere in between.  Distributors who’ve conducted this relatively simple exercise have found some surprising results.  Think about it:  Many of your “best” customers have been buying from you for a long period of time, show great revenue results, which in turn enable you to offer them even deeper discounts each year.  But, if we don’t understand the true cost to serve these customers, we aren’t getting the full picture.  For example:  What, if any, transportation costs do you incur on their behalf?  How much time does your sales representative and customer service agent spend each week with these customers?  Are you accurately reflecting returns from these customers?  Are some of the product categories they buy from you more or less profitable?  Are you accurately pricing your products in order to ensure customers can and will buy at a particular price point, while you’re able to maximize your profit margins?  All great questions, for which you already have the data!  But, are you using that data to its fullest advantage?

Once you have an accurate reflection of a customer’s true profitability, you can then begin the next step:  How do you increase profits and more effectively engage with your customers?  How do you offer them enticing, new and easy ways to do business with you that will ensure they don’t turn to the competition, but remain loyal, continue to increase their annual spend, and begin to buy new products?

The answer to these questions is to provide true customer intimacy.  This isn’t just a weekly meet and greet with your sales representative, but using the data you already have to understand what they buy, when they buy it, and how they want to buy it.

Consider these ideas:

Is your customer a one-man contractor who has to do all the ordering, installation, invoicing, and more?  Why not offer him the ability to text you an order directly from the job site for same/next day delivery?  Imagine the time you would save for this small business owner.  I would venture to guess that the ease of ordering with you would prevent this customer from turning to the competition.

Is your customer a facilities manager who is resolving issues every day?  A chair breaks, lightbulbs burn out, cleaning supplies run low, an overhead projector no longer works, and the list goes on for these overworked customers.  Why not provide an app for a smart phone or tablet with this customer’s most frequently used items, pre-loaded, so that the busy facilities manager can reorder with one or two taps of the finger?

Is your customer the small manufacturing plant who needs a variety of tools, as well as work gloves, goggles, and small parts like nuts and bolts?  Why not consider installing a smart vending machine on site.  The machine becomes your 24×7 sales rep, supplying all the regularly needed/ordered products that can automatically be replenished based on the data you receive back in real time from the smart vending machine.  Easy to do business with you?  Yes.  Easy to switch to your competitor?  No, of course not.

Is your customer a restaurant owner/operator?  Imagine a “pantry” app that would enable her to simply input the current stock levels on all products in the pantry, and then, based on safety stock/reorder points, you automatically replenish only what’s needed based on today’s on hand inventory.  You’re now letting the restaurant owner worry about her patrons instead of trying to become an expert at inventory management.

I would be remiss if I didn’t mention ensuring that you have a beautiful, easy to use webshop for any and every customer.  As your customers continue to get younger, they might not place a high value on that face-to-face connection, but will want to place orders in their business lives in the same easy way they order in their personal lives – on-line.  Your webshop would, of course, offer special deals and upsell items based on past ordering history.

These are just a few examples of how your organization can begin to improve customer intimacy by looking beyond your impressions of a customer and truly understanding what your customer needs and wants, all while continuously measuring their true profitability.  At the end of the day, we’re all customers.  And, we all derive great satisfaction when those with whom we do business know who we are, what we want, when we want it, and how we want to buy it.  Rest assured, if you make the commitment to customer intimacy, you will see revenue and profits continue to grow.  And you may be surprised that what looks like a “lady” may actually be an opportunity in disguise.

Karen
Karen S. Lynch
Global Head of Wholesale Distribution Industry Business Unit
SAP

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