Times really have changed in our sector. Nobody really needs pointing out that covid, and the commercial Armageddon that resulted, was probably just a nasty accelerating agent in a challenged and troubled sector. We were already in trouble from attacks on our traditional core business through a whole raft of technological developments and the tsunamis of on-line competitors led by the biggest wave of all, Amazon.
But as the independent dealer emerges from the impact of a national lockdown, bloodied and bruised but still alive, the issues that faced the dealer before are still there. Except that the core, traditional market, well, it got smaller still.
So it’s perhaps time for a new strategy. One that accepts those changes are real and her to stay. One that re-calibrates our thinking, positively changes our expectations and mood, and starts to embrace the almost unique benefits the re-seller has to be able to adapt and change to realise those opportunities.
This is part one of a four-part series of articles, originally published in Worplace 360 magazine (August 2024) aimed at identifying the fundamentals of creating a new future. I will kick off with a look at strategy, Gary Naphtali will then take a closer look at sales and customer proposition, and Steve Gorham will dig into the important, but often overlooked in its level of importance, the supply chain. Article four we will look to knit these together in a summary as a kind of take-away piece.
Before I get into the bones of this first article on strategy, I think it’s useful to point out that our contribution to this debate has been founded on both success and failure in driving diversification in our respective businesses and shared experiences. We’ve had some planned wins, some surprise successes and, the occasional road bump and, of course, one or two impressive failures with a healthy degree of trail and error.
So these articles do have a decent sprinkling of real world and, you’ll be unsurprised to know, there isn’t one clear cut way of achieving the end-game you seek (or think you seek).
But if, like me and Gary and Steve, you sit in your business and are thinking ‘we need to change’, then I hope you find these articles useful.
Strategy
I’ll start with the term itself. Strategy.
Strategy (in business) is a word that is used often, mostly out of context and, if we are honest, is rarely given a great deal of time or execution by the Office supplies dealer community. But today, in the still ever-changing landscape of the office supplies reseller market, having a compelling and innovative strategy is crucial to give your business a chance to win business and sell at the prices you want (and grow profitably to survive and prosper).
Perhaps more now than ever.
The first natural advantage of a good strategy arises because most businesses in the office products industry don’t have one and because your competitors don’t expect your business to have one either! So just having one puts you at an advantage straight away.
Strategies that are most commonly used are based on old assumptions and these assumptions are based on that businesses today have the same choices and purchase in the same way as they did in the 90’s; that business customers need the office reseller to help them navigate the process of sourcing and purchasing office products backed by a range of service options and the office dealer reseller is the only company that can provide this.
The advantage that office supplies dealer resellers had (for a very long time - the good old days!), was they had the knowledge and the supply chain relationships to provide customers with access to all of the products they need; and they were able to advise on sourcing all the products they would need outside of the core etc. But today ,as we know, a business doesn’t need an office supplies dealer reseller to help with this purchase, they can do it themselves.
One great yet simple example of this (and also a very worrying change) is when a start-up business opens its first office. In the past these start-ups would need to get out the yellow pages (yes, I have been doing this a long time!) to find an office supplies reseller and they would call them up. The rep would turn up and sell them desks and office stationery and so on. That doesn’t happen today. That initial interaction would likely lead to another order, some repeat business and, voilà, you’ve got yourself a customer, possible for 2,3, even 5 years or more. If they row you grow with them.
Lovely. Rinse and repeat.
Today, by comparison, a business start-up will take great pleasure in preparing for the opening of their new office by going shopping on the internet for everything then need and at no point do they think they need anyone to actually help them. They don’t need them. They can get this stuff anywhere, can’t they? It’s everywhere. So, they never engage with an office products dealer reseller and take advantage of all that wonderful knowledge and advice that is at their fingertips. This is happening today and is leaving office supplies resellers with a serious challenge – how do they become wanted and valued…again? And that’s just for new customers.
What about our existing customers? Well, let’s be honest, the re-seller has done an amazing job for the customer over the years. We’ve achieved such a wide standard offering of thousands of products, one available from multiple sources with pretty much the same standards of service, that it is quite easy for a customer to change supplier if they want to.
The core offering of the reseller of next day service, high stock availability, simplified ordering. along with competitive pricing are ubiquitous and this core offering of product and service as all been reduced to a commodity. This has led to the reseller to not being able to sell at the prices they want (or need) to. With the customers taking control and having all of the buying power, they can control the prices they pay and where they buy goods from.
Resellers struggle to create a differentiated offering that customers feel offers value and are happy to pay for and so Price is the ultimate decision factor in the absence of differentiation. Leading to the inevitable ‘race to the bottom’.
So today more than ever, to survive and thrive in the office supplies industry it’s crucial that resellers create a compelling Strategy that makes them different from their competitors and creates value that is worth the customer paying the price for.
The first step in making a strategy real is working out the win, to gain a sustainable competitive advantage or, in other words, a significant, meaningful idea about how to win.
Why is strategy important?
Strategy done well should provide a guide to the company’s growth, competitiveness, and success and to we need to create a sustainable strategy that will give your business a competitive advantage.
Strategy and strategic decisions are typically associated with issues like:
• Long term direction of the company- decisions about the type of company they should be or want to be.
• Scope of a company’s activities – For example should the company concentrate on what it is doing to today or look to expand its offering by diversifying to added value services.
• Advantage over the competition – Building a strategy that is better or different from your competitors that gives you an advantage,
• Strategic fit with the business environment – Working out what customers need and what their business problems are ensuring your solution is the answer to these problems, giving you an advantage.
• The companies’ resources and capabilities- Can we exploit skills and knowledge in the business to expand our offering or do we need to invest in additional capabilities.
The challenge for leaders of Office Products resellers is to build a sustainable long-term strategy that will provide a sustainable competitive advantage through a differentiated offer, not about being totally unique - that’s not important, in fact it can be deemed as high risk to a buyer - but by being different relative to the other buyers’ options: by creating both real and perceived value to the customer.
The decision for resellers is when are you going to start to look at your strategic options and choices? Below is a simple framework, a favourite of mine, that will help guide you to making
the decisions you need to make to create a sustainable strategy.
Determining a strategy for your business is not an easy process, nor is it one that should be created alone (if possible). Yes, there has to be a decision maker at the end of the day, but a collective strategy, one that is invested in by as many people as possible, creates that crucial first step. The vision for the business can be a solo process if that is preferred, but the strategy to execute that vision needs a wider buy-in. And that buy-in creates purpose which, in turn, leads to higher levels of motivation. There are many soft benefits to a good strategy.
Choices
A well-known quote (actually it’s a mis-quote) attributed to Henry Ford about sales was “selling is simple; find out what your customer wants and give it to him”
What he actually said was “if I asked my customer what they wanted, they would have said faster horses”.
There is a simple lesson to learn from this when deciding on your strategic options. If, today, you asked your customers what they want they will say ‘better prices’ or ‘faster/better service’ (but at no extra cost!). It’s been that way for a while, hasn’t it?
And if you base your future strategy on this, you will continue to be part of a very big field of like-minded suppliers in that race to the bottom.
Henry Ford was simply saying to not concentrate on what your customer wants, focus on what they need – but don’t expect them to know what they need. As Steve Jobs said “people do not know what they want until you show it to them!”
The starting point for determining your strategy is to seek information from multiple sources. In my opinion, your source of information to help you determine your strategy, especially if you really want to differentiate, needs to be one that includes your customers, your people, your investors (if you have them) and your suppliers. Your competitors even. Ask them what they think. I promise you, you will get some interesting variety (which is good as it proves there isn’t a one-size-fits-all solution everyone can copy) but you will also get some common themes too to base your decision-making on.
And when you have a good strategy, you will need to turn that into a compelling (and simple) sales message; one that your customer (and your salespeople) understands; one that makes it easier for them to choose you…and harder for them to leave!
Ultimately, you need to create something that delivers a customer proposition, one that’s relevant to your target customer, one that provides the benefits of a car, not a faster horse!
What’s next?
This is the first in a series of articles on diversification in the office products sector. Our aim is to stimulate thinking, even action, in the more-important-than-ever need to re-create a value proposition for the reseller.
The next articles we will look closer at different models, supply chain and then sales and customer proposition....and then how we can knit that all together.
The bad news, I’m afraid, is that there is not a silver bullet solution.
The good news is there is not a silver bullet solution - if there was, everyone would all do it and the race to the bottom would begin all over.
And the danger is, eventually, everyone will win!
(This article originally appeared in the August edition of Workplace 360 - the industry's leading publication dedicated to the workplace supplies sector).
ADAM NOBLE
Adam’s career spans over 35 years of sales, sales leadership and senior leadership roles at a regional and national level, including the roles of Managing Director, Commercial Director and CEO in market-leading businesses with annual sales ranging from £10m to over £150m.
As well as an accomplished commercial career, Adam has also obtained a Masters in Business Administration (MBA), he is ILM Level 5 qualified in coaching and mentoring, and CMI Level 7 qualified in strategic management and leadership.
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