Distributor Pubcast Episode 7: Me-Too Digital Transformation
by Matt Johnson, on Jun 30, 2021 10:02:00 AM
Today we're joined in the pub with Ateesh Vankayala, Head of Digital Marketing, eCommerce, and Product Information at Bunzl Distribution and formerly Grainger. We have a spirited conversation about what digital transformation is, what it is not, and how to get started the right way.
What you will learn in this episode:
- The difference between digital enhancement and transformation
- Overcoming traditional distributor objections and self-limiting beliefs
- Seeking to truly understand the problem instead of assuming the solution
- Digital transformation is not reactionary, it's evolutionary
- A step-by-step guide to thinking through digital transformation
Connect with Ateesh on LinkedIn.
Introduction to Digital Transformation
All right, gentlemen, welcome. Ateesh, welcome to the Distributor Pubcast. Great to have you.
Thank you, Matt. Happy to be here.
All right, we have a great conversation teed up for today, and before we get to that, we have to do a tradition here, which is we talk about what we're drinking in the Distributor pub. Today I will start off, because if you were listening last time Dave completely decided to forget about me. Cheers. Started the entire pubcast and I didn't even get a chance to say what I was drinking, so I'm taking this advantage to go first.
Very bad manners from my side. Sorry, Matt.
It was, but we'll let you slide. All right, so we'll get started. Dave, you usually bring a bottle. I brought this bottle just to show how crazy I am. This is a giant Maker's Mark whiskey, and you guys might know that we like our Scotch whiskey. It's kind of our favorite here. But there's only one place that makes whiskey almost as good as Scotland, I said almost, Paddy, don't worry, and that's Kentucky, so got my Kentucky Maker's Mark and ready to go. It's a really stock but also delicious Bourbon. Dave, beat that.
Well, I got to say actually you've now offended the producer of my whiskey because they're in the U.S. and they're in Oregon, and it's Westward single malt from Oregon. And I went to a tasting of this and ended up buying a bottle or two, but it's really good, so I got to say I think Oregon beats Kentucky.
Ateesh, welcome. What do you have for us today?
I mean, I'll describe the container first. This is I guess a pineapple-colored tumbler and I got this on a trip to Hawaii and this is a boutique coffee shop. It's called, let's see, Starbucks. Only two locations; one in Maui, one in the Big Island, so it's really good. And I've made a cocktail for myself. It's two parts hydrogen, one part oxygen. I know it's boring, so this is almost like announcing winners. Matt announced third place. Dave announced second place. I'll announce the winner. It's from our very own movie Lost in Translation, Japanese whiskey that takes top spot, better than any Scotch out there, by a company called Suntory Hibiki. If you can get the 21-year-old, which is literally impossible to find. I happened to sneak some in on the flight to Tokyo on ANA, All Nippon Airways, and it's only from New York. If you fly out of Chicago you get the 17-year-old one, so you have to fly out of New York. And if you're lucky, you'll get to taste the 21-year-old Suntory.
Ateesh, don't tell me that I didn't know this, but I may have drunk more whiskey in Tokyo than any other part of the world.
And there's nothing like ending the day with a lot of whiskey, which they seem to do every day there, right.
They love whiskey. When I was in Scotland, I can't tell you how many Japanese folks I saw visiting the distilleries.
Anyway, guys, it's great to be here with you. I'm looking forward to this conversation. We met Ateesh, actually it was the first time we met him. It was at the DC Cap Digital Summit that we had a couple of months ago and it was great getting to know him, and you were on a panel with him together, and thought you guys were awesome, just kind of bantering around the subject of digital transformation and all that that implies to our industry, and we just thought, "Man, Ateesh is such a fun guy. He's funny. He's really experienced. He's been kind of in the thick of it in different roles in his career, and he's kind of at the forefront of E-commerce enablement for distributors," and so we wanted to get him on the show and talk a little bit about digital transformation, maybe talk about what it takes to start off if you've never started, how to maybe go from good to great and great to remarkable. Ateesh, maybe you could start with just give us a background on how you got to your current role and what you're working on.
Absolutely, and I'm humbled by the introduction. I hope I can live up to half of what you described. Let's see. I like to talk about my career in two parts. Part one was as a technologist. I did my undergrad in Computer Science, and I spent the first half of my career primarily in financial services in various roles in software development and architecture. And then I was intrigued by the business side of things, and despite the curiosity and the interest, I never really got to fully immerse myself on the business side, right, like what do our customers need and how do we solve that need? Just basic things like that.
Among other reasons, I decided to get my MBA. I love technology, I still do, and I decided to pursue a career path in product management, which was a good blend of technology and business. After I was done with my MBA, I wanted to work at a startup where I wouldn't be working on a slice of something, which is typically what happens in a large organization, but I could have the breadth basically. I could work on things that I had the capacity to work on and not what the company was giving me, so I was fortunate enough to join some brilliant minds at a startup called Gamut, and then I spent a couple of years there and we were acquired by a company called Grainger, and I helped Grainger through their digital transformation.
I had left Grainger in February this year to join my current employer, which is Bunzl. At Grainger and Gamut I was fully into product management, starting as a product manager, going up to leading a product management team, but the role at Bunzl was interesting. We had one product manager and a technology team, and it was a very difficult decision for me to make because I have not really done technology for several years now and now I'm leading a technology team fully, but I'm glad I took that plunge.
Most recently, in addition to leading the E-commerce team, I have also been given responsibility of the business, so now it's like the entire package including everything that goes on the website, the systems that house the content that goes on the website, and then the teams that create the content that goes into the system that goes on the website. So I have business and the technology teams with me. I've been in this role for just a month and a half and the impact that I see in front of me is just phenomenal, so I'm happy to talk about any of these gigs.
I think what's cool, Ateesh, is you kind of just said it when we were talking before, but you're kind of a newbie.
Real fresh eyes and no fixed perspective that at least people as old as me tend to bring and let get in the way. I think that kind of new perspective is actually fascinating.
Current State of Industrial Distribution
Yeah, I think that's a good place to start, Dave, is just talking a little bit about the current state of industrial distribution or distribution in general, the traditional distribution that we all think about and, Ateesh, maybe your perspective on what you see as you've worked in your roles at Grainger and now Bunzl. What have you seen out of traditional distribution, and what are some ways that maybe there's some noticeable gaps in maturity? What are some ways that we need to improve our go-to-market strategies?
Yeah, I'll answer that question on a very fundamental level. I think the biggest difference or the biggest challenge is change, so it's not about old or new. You move your kids from daycare to school, that's a change, so the challenges that come with change is what makes this really hard.
In our context we're talking about technology, right. Technology has the power to basically turn a business on its head, and those that are able to make that journey are successful and the others perish, right. It's that simple. It's evolution. And turning a company on its head is what some of us like to call a digital transformation, but it's incredibly hard to do and not everyone can do it, and not everyone is ready for it.
In my experience, I've seen two camps. People like the one camp that would say, "This is how it's done in company X," and that by definition is against transformation, right, because that is the enhancement mindset, which is you stay in your swim lane and do not take steps forward. But the transformation mindset is you break your swim lane, you pick what direction you want to go in to describe your future, and then you decide what base you want to go with.
Any time I hear things like, "It cannot be done," or, "This is not how it's done here," or, "Our customers are going to hate it," that is just a signal to me to dig deeper and to ask the questions and to bring about change. And it's not change for the sake of change. It's change because we said, by definition, you have to turn the business over its head, which means that you have to change. You just have to figure out what that change is.
Atees, you would say It's more of a revolution than an evolution, right? And most companies get stuck trying to evolve, but not really change. It's incremental. It's a great point.
Yeah, it's rare to find that person in the organization that has the willingness to change, but also has all of the subject matter expertise, right. The challenge for someone like me is I don't know the business and I can learn it very fast, but it would still be education. It would not be experience. You look for those Michael Jordans who have an open mind and who are able to evolve, but also know the business like the back of their hand.
Enhancement versus Transformation
I think it's a huge point that you made about enhancement versus transformation. A lot of times we might run into a distributor who is under the impression that they need an E-commerce website, and it's really in response to market pressure from a customer and so they decide to add it on. It's almost like adding a cherry on top, rather than creating an entire new dish. You know? And that's really what we're talking about is if you're really going to embrace a digital world, a digital commerce space, omnichannel marketing, you really can't just add on an E-commerce website and think that that is digital transformation. That's not digital transformation. That is a step in the direction that you need to go, but ultimately it's a mindset, isn't it?
Absolutely. I mean I couldn't have said it better. It's not a bolt-on. You're driving a different vehicle. It might not even be a car. It might be something else. It's not adding a Nitro boost to your car. Your car might not be ready for Nitro boost.
One of the things that we talk about with digital transformation is this buzzword in our circles and I think we've probably said it like five times already on this show. I mean all of the other people, the other pundits in the industry, are talking about it, but it's sort of like this hypothesis. It's sort of like this idea and it's very ethereal. It doesn't have very much substance to it because nobody really talks about how to actually do it.
So I think that would be a fun thing to explore with you, Ateesh, because you are coming from sort of an out-of-the-industry perspective and you're coming into the industry and you're a technology guy and you see what's available. You see what can be done. But you also realize that the limitations that traditional distribution businesses put on themselves, where would you say that you would start if you were a management team and you were looking at, "How do I start to fundamentally transform my business from the way it is done today, and the way it's been done 30 years, to the way that it should be done tomorrow and five, 10 years from now?"
The 80/20 Rule
Yeah, that's a great question. I typically use one of the principles that I learned as a product manager, which is when you're thinking about what you want to do, you have to ask someone. You have to get your inputs. And when you're getting your inputs, it's important to seek out the problem and not the solution.
We as product managers, all the time, get a request like, "I want to add typeahead to my search because when people type a few words I want to show them the results are proactively..." So that is like a great idea. It's a problem. It is a solution that is described as a problem, right. And I just made it up. I don't know what the solution here is, but it's important to understand what the problem is. And it's uncanny the number of times that my solution was different than the solution that was first told or described to me when I got to the underlying problem. It's just nine out of 10 times that's the case.
And not to say that I'm a better problem solver. It's because the person who was describing to me themselves did not understand what the problem was. They were thinking about the solution. So if you apply that here, right, what not to do is to think about, "I have this piece of technology. How can my business benefit from it?" That is going after the solution first. I have my own 80/20 rule. I think technology is 80% business, 20% technology, which is you go back to the drawing board and think about in this day and age, right, technology being part of it, but also the new generation and the supply chain effects of China coming to the picture, right. Several, several things have changed.
In this day and age, what do I want my business to be? What do I want my business to do? And then what are others doing and how am I going to be special? Right? I'm just giving a few examples. This is not a how-to guide, but what I'm getting at is it's all about the business. It's all about strategy. And you really tease out what makes you special and what will give you that mode of staying in business for the several decades? It's not reactionary. It's evolutionary. That is the 80%, right. That is the hard part. And it doesn't mean it takes 80% of the time. It's 80% of the challenge. If you have figured that out, you're 80% of the way there.
To me, I actually downplay technology a lot. Maybe because I've been in it for so long, I don't think technology is special. The most credit I would give technology, it's an enabler. That's it. It's not a strategy. It doesn't keep you in business. It allows you to execute your business strategy, right. And that's all it does, in my mind at least, in my opinion.
Ateesh, I've spent my life running IT, actually mainly in large companies. I think I may have said this to you when we talked the first time. My philosophy is that there is no technology project. There's only business projects enabled by technology. Maybe this is like if you're a management team, half the time needs to be spent debating what the problem is. Maybe the opportunity or the problem and the opportunity. But too often everybody comes in the room with the answer without having really debated the problem. So step one might be to debate the problem. What's the problem? What's the opportunity? I totally agree.
Otherwise you go off track and probably are going to be less than successful and frustrated with the outcome, especially if you just go and spend a bunch of money with a technology company thinking it's the answer.
Well, and the technology or software, depending on whose hands it is, can have radically different outcomes, because we have a really robust enterprise B2B E-commerce platform that distributors do millions through, and then we have some distributors who don't use it, who don't use any of the tools, don't use any of the functionality, and do nothing. And the difference really comes down to mindset, right? It comes down to, are you thinking about using this? Is this just sort of a tool on the shelf of your existing business, or is this fundamental to the way that you go to market and the way that your customers interact with you?
And I think that for a lot of distributors, they have just, like what you've said, been reactionary, so they feel like they have to put up an E-commerce website and they don't really think through all of the ramifications of that.
And a lot of it comes down to systems that need to change. Personnel may need to change. The way that you go to market needs to change. The way you communicate needs to change. And sometimes none of that happens and at the end of the day you have a really beautiful software solution or technology solution that is severely underutilized and you never get the return on your investment.
Minimum Viable Product
Yeah. And things like Agile make a big difference, right, where nobody, even if you've spent all of that time getting to the 80%, nobody knows what the right answer is. It's all guesswork. If you want to put a fancy word, it's hypothesis testing. And that's where you have your minimum viable product. I know there's a lot of argument around how minimum viable product sucks, as they say it, but I'm not talking about a technicality there. I'm talking about the concept of getting to the crux of the problem, having the best possible solution, putting it out there and improving it from there.
That is actually very hard to do because you cannot create a statement of work and burden an outside vendor to do that. That is something that you have to own and cultivate within your organization. Of course, you can hire help to do that, but the thinking, like the brain, has to be yours. You cannot outsource the brain.
So it's convenient to hire someone to do that for you, but it's just going to be a lot of wasted time and effort and you'll get something that is generic that all of your competitors have and there's no special sauce there. It's very watery.
Absolutely. You know what you said a couple of times that I've been thinking about a lot lately is so the vast majority, the distributor industry, the American economy, is really built on these small to medium size independent distributors. I mean, we all know about the Graingers and the big, national distributors and they play their role, but the rest of the economy is covered by these small, family-owned, traditional distribution businesses. And for the last 10 years I've been talking to them about sort of what you just said, but I didn't put it in those terms, but it's like an evolutionary process.
It's not necessarily transformation overnight. It would be nice if that happened. Just when you're a small business, how can you possibly go from nothing to grainger.com? You know? It's not going to happen. They have the resources. They have the time. You're never going to get there. However, you can take an evolutionary process to this. You can start small and build on it and you can gradually, incrementally, over time get to something that is pretty darn good.
What do you think about this idea of starting off small, “nailing it and scaling it”? That's a Davism. Dave likes to say that. But you know what I mean? Getting it right, doing it small, and then growing and adding more complexity, adding more technology over time as you're able to handle that as a business unit.
And actually it's “nail the MVP and scale it”. It is. The minimum viable product. I'm totally with it.
The Me-Too Digital Transformation Strategy
Yeah, so I mean Grainger is the biggest, right. It's a little under $12 million company. And I'm not a numbers expert, so pardon me if some of these are slightly inaccurate, but I think the market cap is like six, seven percent, which is unbelievably fragmented, as you're describing, Matt
And this is where I talked about in this day and age what do you do, right? If all of these mom-and-pops took their storefront and put it online, you would have thousands of businesses that do exactly the same thing. They sell the same kind of hardware. That is an example of a me-too digital transformation strategy, which all of them are doing so I'm going to do it too. I'm going to take my inventory. I'm going to take all the information. I'm going to put my part numbers and I'm going to update my pricing and I'm going to put it up online, and I'm going to work with UPS to fulfill my order and I'll turn my store into a warehouse or whatever. Right?
That's not going to work because you know what? The benefit that you had of being located in a zip code where people knew you and trusted you is no longer... That was your special sauce. Now it's gone. Online everyone is the same. You can be purchasing from California and if you get the same product at a lower price, you would get it from there versus a website that is hosted down the street from you. In fact, all of it is on AWS, so even that concept doesn't exist. That is where your starting point or what step one is. You're thinking about this day and age, what can I do?
I'll use an example. Your dad, who was the second generation owner of this business and has deep expertise in the faucet cartridges space, has helped experts with really old faucets find the right replacement and fix that, because you can always buy a new faucet, but when you have these antiques, you don't want to get rid of them. They're worth 50 times more than what you paid for it. You know? That is a niche and you didn't even realize it because you're having him move stock from here to there because you think it's not smart enough for this day and age. So you take something like that and you build a niche around it and you call your website faucetrestoration.com, and you're selling one hundredth of the products. I don't say SKU, I say products. One hundredth of the products that you used to sell, but you're selling them better than anyone else on the planet. Finding something like that, knowing what your new strategy is going to be, I think is key. And if you just replay the last two minutes of what I said, there was no technology involved anywhere, right.
It's all strategy. It's absolutely strategy. It's brand strategy at the end of the day. It's value proposition. It's how do you communicate your uniqueness to your customer base, because at the end of the day, if it was just about price, and if it was just about availability and ease, well, then everybody would shop at Amazon or whatever, right. I mean that's a no-brainer. So what you have to do is rise above that and create a value proposition and articulate it well enough that your customers understand that you're specifically designed for them.
You exist to help them in a way that Amazon or these other massive retailers do not, or cannot. And they cannot. And that's the thing is that a small distributor still owns that local relationship, and they have the ability to, but a lot of them want to put on the Amazon mask, the Grainger mask, because they think that's the measure of success.
And what we find is that if you can differentiate yourself in a significant way and you can make sure that your customer knows that you're for them, helping them solve their problems, and then add a catalog of complementary products that may be relatable, you can start stealing market share from other distributors because now you, since they see you as the authoritative guide, are the expert in the category, why not buy the other items from you as well?
Yeah, exactly. And yeah, when you become the expert, then you're not chasing customers, right. Customers are chasing you. This is more philosophy, but that's one of my life principles. If you want something, especially if it's material, don't go at it, go after what the thing that you're trying to do is meant to do. So like career, for example, don't go for money. Don't go for titles. Go for helping your customers first, helping your company second, helping your team third, and then the rest will follow.
It's the same thing here as well. Don't think about how can I not lose my revenues or my market share? That's a very loser way of thinking. It's about how can I make a difference in this industry and what can I do that no one else can? And it's very easy to think, right, the lazy thinking origin of this is “if there was something to be done someone would have already done it”. In the B2B space, that is not true. The amount of money that is on the field in the B2B space is unimaginable. Just run as fast as you can and grab it. The amount of money that you can grab is based on how fast you can run. But B2C spaces, I can agree with that statement, where if it could have been solved. I was thinking, "I should know. I should be able to know, sitting at home, how long the line is in terminal one of O'Hare," right. And I looked it up and lo and behold there is an app for that. B2B, not even close.
Evaluating Your Value Proposition
Ateesh, I think actually again, how do you get started? To me a lot of distributors actually haven't really evaluated what their value proposition is, meaning what is it today? And distribution's really hard because you don't manufacture anything, so you don't have unique products generally, right.
And the old value proposition, this is my perspective, the winners actually had an awesome supply chain, and that's kind of what Amazon has done too, right. Same day, next day delivery. So the supply chain is a critical part of the transformation. The product assortment is super important and a lot of independent distributors won because they actually would keep products that are bigger and fast-moving, and the big distributors who are looking at the inventory turns are not keeping the slow-moving product, so they would have unusual products that you could go get from them.
But we've just been approached actually by a group of distributors. I can honestly say I don't know if they're going to engage us, but I had a call with them. Seven or eight actually very large distributors, and I'm not going to say who they are or what vertical they're in, because I think they're trying to do something really cool, but they are figuring out, "Okay, I've got the value proposition I had. More of it is now exposed online and everybody wants it now. What are the services I'm wrapping around it to differentiate my proposition versus the next distributor or the mega distributor?
And I think in a way services were maybe taken for granted on a local scale, but as you get into more complex products, not commodity products, but everything around installation, warranty, maintenance, can you actually take over the product and not just provide the product, but maybe in some cases it's actually run the product as a service, right? Anyway, I'm just philosophizing, but figuring out your value proposition is critical. Absolutely critical.
Yeah, and it doesn't matter how big the space is, but you have to own it. There're no two ways about it.
I think, Ateesh, a lot of our customers are sort of, in this no man's land, between getting started. They've made a great first step. Maybe they've hired somebody to run an E-commerce channel. Maybe they've invested in E-commerce. Maybe they have an integration with their ERP software. They've invested. Their money says, "We're all-in. We did it. We understand our customer base is moving to an online shopping and purchasing and procurement experience, but we still have kind of, what we would say is we've dipped our toe. We've sort of begun the journey, but we're not where we need to be. We haven't created the urgency with our customer base to start using the platform, so we're kind of struggling with customer adoption. We're certainly not generating new customers via organic search or paid advertising or anything like that."
What would you say to a distributor who's kind of taken that first step? Maybe they're, what we would call in good shape, but they're not where they need to be. What would you advise a business in that position?
Understanding the Sunk Cost Fallacy
Yeah, so I think, depending on the situation, there are a couple of things to look at. The first one is the sunk cost fallacy.
For the audience that have not googled it or have not gone to B-School, it goes something along the lines of you don't make future decisions based on your past investments, and it's actually hard to internalize. I held onto my first iPhone for I think four or five years because I had paid, I don't know how much it was. It was a large sum of money. They dropped the prices pretty fast, but all of that does not matter. The psychology is I have paid more than I... I mean it was a phenomenal device, but I've paid more than what others have paid, and in order to make up for it, I needed to own it for longer. That was the sunk cost fallacy. But just because you have invested a certain amount, or you have presented to senior people or Board of Directors that this is what you're going to do, doesn't mean that it has to work. I mean we know every successful business has pivoted at least once. And when I say pivot, I don't mean 20 degree pivot. I mean like a 270 degree pivot. That is evolution.
But don't be afraid to declare bankruptcy on your efforts, not on your company, and start over if you have to. And this bleeds into the second suggestion, which is that in B2B you don't need E-commerce or you don't need technology today. You have time. There are several businesses which have pictures and paragraphs on their website. They don't sell anything online. But they're still around, so you can sustain a model without technology today. What you're doing is preparing for the future. You're being proactive, right. So you have time. You don't have to get it right, right now.
You don't even have to start right now. You have to start when you're ready to go. So take your time, pivot if you must, and think about this as being proactive. It's not something that you rush into. If you don't like what you have, it's okay. Nobody gets it right the first time or the second time, or even the third time. I won't call it trial and error, but it is a lot of hypothesis testing and adjusting.
Ateesh, I think you came up with the next T-shirt. You can only learn from your mistakes and not your successes, and it's true. And you've got to keep evolving and changing.
The Importance of Change Management
Well, I'll tell you, what you said was so, so relevant right now because we've spoken with multiple distributors who have invested in a platform, a competitor of ours, and it's like they're so hung onto it because of the time and energy, because it's not just the cost, right. It's not just the dollars. It's all of the energy you've put into it. It's the time. You've put somebody and maybe you've hired somebody and that person has spent an entire year on it.
I mean, that's the entire salary payroll for a year on top of the software costs. But to your point, in business a good management team, a good ownership, understands that you have to be willing to kill the things that are not working and start new and, like you said, pivoting is so important. I would say, going back to the way we've started the conversation, it's like what is the number one problem in the industry? It's change management.
It's the ability or the inability to make those pivots, to make significant changes that really are evolutionary in the way that they do business. I think that's a really good point and I think that also you've been around some really elite E-commerce teams and you've worked with some great people. I'm wondering if there are any tips or tricks, without giving away any secret sauce necessarily, that you could give to folks who are running an E-commerce website and they're looking to just improve. What are some out-of-the-box ways that they can take their site, their business, to the next level using a B2B E-commerce solution?
Yeah, I have an answer that nobody's going to like, but it is the truth. There is no silver bullet. The startup that we worked at was creating something that was, you know, not going for the money. We were going for solving customer problems, right. And we would have people who would come over and check out what we're doing, and in their mind they were like, "If we do steps one, two and three and don't do anything else, and we apply those three steps into our business, we can do better than them, because we are much, much bigger than them. All we need to do is these little tips and tricks that we can apply." I mean we would share our strategy in broad daylight, because just because you know the steps doesn't mean you can execute it. We are talking about change management. That is one of the big boulders that would come in the way.
But coming back to your question, I don't have a formula, but there are some fundamental things that really help a lot. One is going after the impact. We are talking about doing few things, right. We are talking about not doing everything. When you pick things, what do you pick them based on? The low-hanging fruit approach is okay sometimes, but you have to make an impact. You go after the things that make the biggest difference. And they're scary and they are difficult to solve, but you have to be brave enough to go after those things first. Think big, right.
There's a book, Magic of Thinking Big, it's that kind of thinking. You have to go after a few things that make a big impact. Once you have figured out what that is, don't get distracted by, "Hey, that person is doing machine learning and they have switched from IGO to AWS." All of that doesn't really matter at the end of the day. That is fine-tuning. That is once you're in the 95th percentile, how do you get to the 98th percentile?
In B2B we are, I mean I'm talking percentiles, but if you were to score them or rank them, they'd be pretty poor. There's a lot that you can do by doing very simple, basic things. Before this chat we were talking about product information. That is half of the battle. Once you figure out the strategy on the execution side, start with having a good foundation. Know your products. You're not collecting information for your customer. You first collect it for yourself, so you understand what it is that you are selling, what it is that you are really selling, and then translate that to the customers.
The silver bullet is focus on the basics and don't get distracted by the new, shiny things. They have their place, but more often than not they come in at phase 64. They don't come in at phase one.
The Business Hierarchy of Needs
Yeah, I think that's awesome, and that's actually reassuring to me because when we advise our clients, we often talk about Maslow's hierarchy of need, right, this concept of focusing on what's most important for, well in Maslow's example, survival or self-actualization. But for a distributor who's getting into E-commerce it's like well, hey, do you have your in-stock items represented well on the website? Do you have the product information? Outside of that, it's bonus, right. It's cherry on top. Do you have some sort of communication strategy to your existing customers? Are you communicating and you're in touch with them well on an ongoing basis?
And then you start to get into some of the more B2C customer acquisition type strategies. But it's like so many distributors want to rush right into, "Let's go out and hire an SEO expert and let's start running ad campaigns," and meanwhile they've completely neglected their existing customer base, who are left with a shoddy online purchasing experience.
Yeah, if I can talk about, I'll just call it Google for the sake of simplicity. I was talking to someone on my team today about Google and I was like, "You know, we need to have a SEO/SEM strategy," but that is almost like the end game. It's like if you invite someone to your house, your house has to be clean. It has to be something that you're proud of. You don't invite someone to your house when it's messy.
So SEO's the end game. SEM is the end game because you first focus on building a phenomenal website, build a phenomenal experience, and then you invite Google to your house and say, "Come take a look." Just by turning on Google is not going to do anything for you. I mean yes, you're going to get some lift, but you're also going to get heavily penalized and you're going to make permanent damage to your reputation.
Right, because they're bouncing. They bounce off the site, right, because it's not what they're looking for. It's not providing that great customer experience.
The customers, yes, but Google also penalizes you for having a shoddy website.
Right. Yep. Dave, any closing thoughts before we start wrapping up?
Yeah. I actually was thinking about kind of wrapping up, and I think we said a few good things, hopefully a lot, but certainly a few. I actually think the sequence of getting going, so maybe I'll try and play it back and you can both interrupt me. But I think we said forget E-commerce for a minute here. It's not about E-commerce, right, the digital transformation.
What's your value proposition as a business today? Probably a thought around what's the value proposition of the competitors you fear most and what's different about it. But what are your customers really looking for? Maybe not right now, but even thinking, "What's going to differentiate us?" Right? So kind of start with the problem. Focus on the problem, not the solution. What's the value proposition? I think that's step one, right? I think that's what we said. Just playing it back.
I agree. I don't think you can come up with the value proposition until you thoroughly address the problem and you think about your customers as they are today, but also as they are becoming, because everybody's in process, right.
And that's a really good point. It's like how are we serving them today, how are we serving them tomorrow, because we're starting to see it. We're starting to see 60-year-olds, 65-year-olds, being replaced by 35-year-olds, and what does that mean to the way that you go to market and the way you communicate with your customers?
Yeah. Okay, so step two. Let me take a run and you guys critique me again from what we said. Step two is somehow around okay, as you start to solve the problem conceptually, what are the components to solve the problem? And again, I think it's keeping a broad perspective, right. It's nothing to do with the technology. Potentially it might be the supply chain, their ability to deliver and meet the customer's fulfillment expectation. It might be the product assortment. It might be services wrapped around the products as a distributor. But what are the components to solve the problem? And maybe even go validate it with your best customers, right. Just go trial it, test it, the concepts. And so it's getting the inputs and the components to the solution.
And then maybe we get to step three is really what's the organizational impact, the people's impact? And then the last piece may be technology, maybe. It's really thinking about the future of your business.
I do think, Dave, what you're onto is actually very right on point, because here we are, ES Tech Group, we're a technology company and Ateesh, I mean, he is in the technology world. He's using technology every day. And yet kind of our conclusion is that technology comes after all of the other stuff, right.
It's value proposition, understanding the customer's problem, understanding who they are, what they need. It's developing the products and services, working out the supply chain. Can you deliver what you are promising in your value proposition? And then organizing the business around the solution. And then finally, how do we optimize it with technology? How do we use technology to make that whole thing run? And I think you're really onto something, and if everybody took those steps in that order, you would wind up with a radically successful E-commerce implementation. Radically successful, because it would be exactly what the customer wants, and you've already figured out how you're going to deliver it before you blasted it out to the world, right.
Yeah. And, Ateesh, you said, "Do something and pivot. Do something and pivot. Do something and pivot."
Don't try and dream up the Utopian solution, the perfect solution, and get there and take all that time, but just keep iterating and pivoting and iterating and pivoting. And use data to drive the decisions.
Awesome. Well, Ateesh, is there anything else that we should have said that we didn't?
No, I think, I mean my summary of this would be very simple. It's that the goal is in the simple stuff. Don't overcomplicate it. It's very simple. Know your business, know your customers, and bring it together in a solution that might or might not involve technology.
Awesome. Great. Just as we wrap up here, is there a place where people can connect with you? Are you on LinkedIn or anything like that, or how can folks find out more about what you're up to?
I'm on LinkedIn and I've gotten into a bad habit of posting my thoughts on LinkedIn randomly, so go there at your own risk. I'm very opinionated and I state it as it is.
That sounds like a warning, but to me it's like forbidden fruit. I'm going to go right there. Sounds good to me. Hey, Ateesh, it's been awesome having you. We've enjoyed talking to you. You're fun to talk with. You really have a lot of great ideas. And I love that you came at it from this business-solving perspective today. I think that was really awesome and really unexpected, so this was great.
I'm happy to be here. I've just started to go beyond my shell of sitting in my cube and doing my things. I mean, people call it networking. I hate that word. I call it talking to people. When it's networking, it's like a task. When it's talking to people, it's what you do as a person.
And I would say I've done this a lot and I'm humbled by the opportunity to speak to someone beyond just my organization, and I love to help people. I think that the most selfish thing in the world is to help others because it gives you so much fulfillment, so anyone who's seeing this, if you need help with anything or you want to chat about something, my schedule is tight but I will make it happen.
Thanks for Joining Us!
Thanks for joining us on episode of the Distributor Pubcast, we hope you enjoyed the show. If you did, we'd love for you to leave us a rating and review on the podcast player of your choice. You can learn more about us at distributorpubcast.com. This show is presented by ES Tech Group. We're here to help you grow. Until next time, cheers to your growth.