Episode 1 Dec 03, 2019

B2B Reimagined: Ep 1 | Welcome to B2B Reimagined

In this, the first episode of B2B Reimagined, we welcome special guests Barrett Thompson and Brian Hirt to the podcast to discuss trends, challenges and opportunities unique to B2B electrical products distribution companies Brian Hirt served as the marketing director for a large, U.S.-based electrical products distributor where he was responsible for pricing and promotion, in addition to his traditional marketing duties. Barrett Thompson has built and delivered optimization and pricing solutions to Fortune 500 businesses in diverse vertical industries including building materials manufacturing and distribution, industrial components manufacturing, and many more.
Featuring
Brian Hirt

Brian Hirt

It's all about creating actionable intelligence for your sales rep. That's more than just a buzzword, but making sure that the guidance you're putting in front of them is specific to the customer they're talking to and the product they're looking at, but also actionable for them in the sense that it's relevant. It's timely. It's in context of where they're making the decision.
- Brian Hirt, Zilliant

Episode Transcript

Lindsay Duran: Welcome to B2B Reimagined. In B2B, achieving stellar business performance is an incredibly complicated endeavor at the vertical level beyond just manufacturing, distribution, and services. The intricacies grow even more challenging as unique macroeconomic factors and industry disruptors further stress legacy systems.

Gaining strategic control of pricing and sales performance at this level will be the differentiator between leaders and laggards. B2B Reimagined is a monthly podcast with a rotating host of experts. Each of whom brings decades of experience using data science to address industry vertical specific challenges that give the strategic control over pricing and sales that today's B2B companies simply must have to outperform.

Join us as we delve into a unique mix of verticals each [00:01:00] month to discuss the challenges and dynamics, and discuss ideas to help you begin to think differently about achieving more than with previously possible.

Barrett Thompson: Welcome to our first episode of B2B Reimagined. I'm Barrett Thompson. And I'm your host for this episode. Today, we're discussing the dynamics, challenges, and reimagined strategies of the electrical products distribution industry. It's my pleasure to welcome Brian Hirt. Brian, you're a veteran of the industry.

We've had the pleasure of working together, but why don't you tell a little bit about yourself to our podcast audience?

Brian Hirt: Yeah. Hey Barrett. Thanks for having me. So I've worked with Zilliant now for about seven years, but before that I did get a chance to work in the electrical products distribution industry for about five years and had a chance to run marketing there.

Worked on pricing and drove a lot of the initiatives there that have given me great perspective to understand our clients across different industries, but in electrical products specifically. So in my role [00:02:00] at Zilliant, I've worked on over a dozen implementations across our pricing and our sales growth platforms and have gotten to get close with our data science and even see the evolution of that over time.

So I'm real excited about the things we're doing today and how it's continuing to help electrical products distributors.

Barrett Thompson: I appreciate that you have a great reputation for the work you've done and well-qualified to talk today. So let's begin first with really an overview of the industry dynamics. Each B2B vertical is unique and some instances they might share some characteristics in common, but I think it would be important for us to begin first with what are some of those unique issues that the electrical products distribution is facing compared to another distribution industry?

Brian Hirt: So distributors as a whole have a lot of things in common in many ways, they're very sales driven. I sometimes think of them as loose organizations of salespeople that are, selling products out of a warehouse, electrical practice areas do have some unique things about that one that really [00:03:00] jumped out to me based on my experience in that space with the role that the manufacturers play.

Anytime you're a distributor, you're not making the product that, your relationship with your manufacturer. Yeah, it's key that's not unique, but when you're in the electrical products distribution space, I saw that more than ever, it was a collaborative effort, but also a competitive effort where you were dealing with the constant threats of the manufacturers going to go direct.

You're partnering up to sell to these end users, but, your manufacturer always has an interest in understanding their possibility to go direct like that. So I thought that was unique as opposed to somebody like auto parts, where your end user, in many cases, is a person in a repair shop. Big manufacturers, aren't going to sell direct to those size clients.

Barrett Thompson: Right. There's a chance it might be pragmatic to do so. It might be possible to do so in some cases for example, while we're comparing, let's say auto parts to electrical products distribution. Talk to me a little bit about the consumption dynamics in those industries. How do they buy? How do the distributors and their [00:04:00] end customers consume? And does that set up any dynamic that you need to be aware of to be successful in that space?

Brian Hirt: Sure. So I think within electrical products distribution space, I think, of the end users in two broad buckets. There's the contractor market, they're dealing on projects, they're building baseball stadiums and server farms and things like that, where it's a specific project. And then you're dealing with the manufacturers who typically have a more, more steady consumption pattern where they're delivering a product or manufacturing something. Within the manufacturing group, I think you're often dealing with that there's still a further breakdown between the OEM and the ones who are building their own products.

And then the contract manufacturers, they are sometimes called CM's, building things on contract, where they will for a period of time, they may have a real consistent buying pattern, but that can change quickly based on when they lose the business no longer building a product for a manufacturer. So I think that's the landscape that they're dealing with.

And then there's, there's lots of nuances around that with, especially within pricing where you've got deals that could be specific to a contract [00:05:00] manufacturer or some special product agreement or shipping debit agreement. There's a lot of nuance around how those things work out. But to me, that's really the overall landscape.

Barrett Thompson: Do you find that speaking to pricing they're using different methods to price out to different kinds of end customers? Is that common?

Brian Hirt: I think definitely. Yeah. Like any business, you're looking at the customers a little bit differently based on size and loyalty and things along that spectrum, I think that plays in here.

Especially when you're dealing with, repeat business where there's a lot of pressure on price and negotiating agreements to buy a particular product over a certain period of time. That's where the agreements that are putting in place become especially important when you're dealing with a specific a contractor on a specific project.

I think the, those sort of agreements are a little more spot than long-term. So I think there's definitely a way that it will look at those, the structure of the pricing differently, depending on the type of customer.

Barrett Thompson: That would make sense. Now I often hear in distribution and I've experienced it myself, that the idea of [00:06:00] what you're stocking, who is stocking, and when you do or don't have stock can play a big role in many of the decisions that are made all the way to the business that you're pursuing, how you're pricing, et cetera. I'm assuming that's also the case here in electrical products and would love for you to share how stocking plays a role.

Brian Hirt:? In my experience who you're working with on the distribution team has a different perspective on price on the sales post one, everything could be in stock all the time, right? And the people that are actually managing the inventory and watching the terms, your finance group is keenly aware of the things that are distressed inventory and trying to keep your turns low. And so there's a healthy tension like that within the organization. But when you think about, from the perspective of your customers, that's the distributors telling to you it's of critical importance that the product’s in stock.

That importance differs a little bit, depending on which type of customer you're dealing with. If you're working with someone, who's building out a build material to put into a [00:07:00] baseball stadium, that's not going to start construction for six months out. It doesn't matter if you have it in stock today. It matters if you can deliver it when they need it. But when you're dealing with manufacturers who have limited ability to stock the product on their own, they need the product, right when they need it. Having it in stock is really the first point of entry. It doesn't matter if you have the right price, if you don't have it in stock. Right?

Barrett Thompson: Of course you can't sell it if you don't have it.

Brian Hirt: Exactly. Right. Just take it into the door.

Barrett Thompson: Yeah. Let's talk for a moment about some of the KPIs that this industry uses to judge itself. I would assume typical financial KPIs. There might be also operational KPIs. Let's talk about that a little bit.

Brian Hirt: Sure. I think obviously our margin is critical and I think, especially in electrical distribution space volatility of raw material costs can be a really a significant part of the margin calculation. Right? So as raw material costs grow over time, tends to squeeze the overall margin percent. So even if the profit dollar associated with the transaction might remain relatively constant, [00:08:00] the margin percent that they're dealing with can get squeezed.

And then same as when costs go down. That margin can grow, even though the profitability of an individual transaction is made relatively the same. So in this world where you're starting to have volatility looking at all aspects of margin are important, understanding those dynamics over time.

Barrett Thompson: Yeah.

Brian Hirt: There's a tendency for salespeople in that distribution space to get fixed on: " I have a 30% margin target number, so I'm just everything's focused on that." And to not really appreciate the fact that some products you can get more margin on, some of you need less on to be competitive. There can be a rut people get in around specific KPI. And I think it's important for them to think broader than that.

Barrett Thompson: Yes. Brian, you were speaking to cost volatility. And based on what I’ve seen with electrical products, there's a lot of metals in there for instance, copper, steel. And we've seen a huge amount of volatility in those products in the last several years. For all sorts of reasons, from tariffs to, to just the materials itself. [00:09:00] Anything else playing into costs here that the suppliers are of course, going to pass on to the distributors? Any other cost dynamics we might want to be aware of?

Brian Hirt: I think is the thing you mentioned about raw materials. I think in terms of the very recent trend, right? We're looking at people are shifting manufacturing around different countries based on tariff pressures and things like that. So that's causing a big shift, I think, in the cost basis that different manufacturers face, and then that's being passed on to the distributors. And then distributors are challenged with trying to smooth that out for their end customers. And just to manage those costs, but for the surveyors, ultimately margin is one of the key things they're watching and then just making sure that they have a structure and an efficiency in their sales that they could support.

Barrett Thompson: Right. I've yet to meet an executive in distribution that wasn't looking for margin growth, share growth or volume growth at the same time. Right? They're there after both, they care about both. And if you ask them, are you willing to trade one for the others? No. Please bring me both. What [00:10:00] sort of trends or challenges do you see shaping the electrical products distribution space these days?

Brian Hirt: One of the big trends that I see, and I think has a significant effect is really just the continued growth, the acquisition. And then also what's happening generationally within sales, as far as the turnover of reps and you've got baby boomers retiring, you've got expectations in 2021, half the workforce are millennials. And what is that doing to, how people sell, what are the expectations of the sellers, as far as the technology they're able to use, but also just with so much turnover, how are you, how do you maintain the knowledge within the salesforce? To me, those are huge. Just managing this shift in the sales team, but also managing the, bringing together of different businesses through growth, through acquisition and mergers.

Barrett Thompson: Let's talk about that sales team change over first because, I too have been aware that this could be pretty major. You might have [00:11:00] sales teams, marketing teams that have 30 years in the industry. They know all of the customers. They understand the products. They're very deep in the space and they're retiring.

And someone's coming in who's been exposed maybe two or three years. There's just a gap right there. Right? And how much, how often you've been around the block, what things you've been exposed to? I've heard some estimates that say 50% of the workforce will be made up by millennials in the year 2020.

That's just around the corner. So Brian, I've heard others across the distribution space talk about this turnover of their frontline in the sales team in particular. Could you tell us a little more about that? What challenges does that bring to a business?

Brian Hirt: And do you have new people coming in? They have less experience. I'd say all of the clients I've worked with Zilliant where we're working with these B2B companies and they all tend to have a similar [00:12:00] trend of you've got a group, a large portion of your salesforce is nearing retirement. They have a great wealth of knowledge, both for product knowledge, pricing, knowledge, industry knowledge, and the new folk coming up or are eager to learn. But ultimately it's a big challenge for these companies to get everyone up to speed in a way that they can be selling productively and efficiently as they're brought in, the older group is retiring.

Barrett Thompson: Right.

Brian Hirt: I see it as a big training challenge to get people up to speed. And I think that's where you can, as much as you can leverage tools to help provide answers to this group that, this is a generation that they grew up, getting the answers from a computer. They're not trying to be the answer themselves, but they're comfortable for getting recommendations on what to do. It's a huge boon. If you can get them recommendations that help them sell more efficiently, help them understand what makes a product a customer needs. Help them understand what's the market price for a particular product? Those are questions that anyone stepping [00:13:00] into a into a distributor is going to struggle to get, because so much of that it's really tribal knowledge and it comes with a lot of experience. It's not where you can provide tools that equip the younger generation of sellers to come in and be able to have those productive conversations. Be selling at the right price. Be suggesting the right products to the right customers. It's a huge advantage to be able to get people up to speed quicker.

Barrett Thompson: What I hear you implying there, Brian is a system, a solution, a tool that captures and crystallizes all of that knowledge from the retiring workforce and is able to distill it down and deliver it out to the new workforce, as needed on demand. Is that right?

Brian Hirt: Yeah, absolutely. In some ways, And I've used this with my clients over the years when we're building out these solutions I've described is we're taking the, or the behavior of your best, most experienced sales reps. We're systematizing that. Right? We're building that into a process so that other, the rest of the sales team can sell like your best. And so [00:14:00] it's ultimately a way of making that collective knowledge of your experience reps, even as they're riding off into the sunset, you're building that into your process to make sure that carries on with sort of the next generation.

Barrett Thompson: That makes so much sense. Gosh, what a vision for people who can put that into play. It's got to take the edge off, right? Of what it means to see that if you have 30 years experience and you're retiring 35 people, at the end of the year out of your workforce, Think about it. That's a thousand person years of experience walking out the door. So to preserve part of that in the solution would be fantastic.

Let's talk for a moment about that second trend that you mentioned very common in many distribution industries is growth by acquisition. Now by the way. Isn't that always a wonderful event. They go forward with the press release. Everyone's so excited. We've closed the definitive deal and that's good for both parties. I think that wouldn't be entering into it, but the acquisition may come with challenges perhaps, or it may come with new [00:15:00] opportunities. So I'd like you to take a moment and talk to us about this acquisition activity and what it means on the ground.

Brian Hirt: Yeah, absolutely. What I have observed is that these companies come together. There's a lot of focus on, trying to bring together tools, trying to build systems that can allow financial reporting of things across the company, as much as possible, trying to, you're restructuring sales and how things are grouped together. But I think one of the big pieces that people are slow to act on is leveraging for the wealth of data that get brought together. You're bringing together two companies and generally people are making an acquisition because they're trying to buy up in a new geography or buy up in a sort of extending their product line. And so really both of those cases, you've got a new wealth of product of market knowledge resonating in your own data. And the ability to leverage that across both companies and build out a synergy of how [00:16:00] each company can make the other one feel smarter through the merger, I think is something that people are doing later than they should. Right? Or it's not part of the the acquisition checklist sort of "things to do” to bring these companies together. And that's where I think there's a huge opportunity.

Barrett Thompson: I find this a fascinating angle because when you think about the synergy that is achieved through most operations and merger and acquisition. When you consolidate those warehouses and DCs, when you integrate to a common finance function, when you do those sorts of things, the synergy comes from what you leave out. You know what I'm saying? You're getting rid of the redundant things. I have two DCs in the same town. I'm going to combine them and I'm going to sell one off. So the synergy comes from what you can let go of or cut away from the business. But what I heard you say on the data side, And the data intelligence side, let's be very specific. It's not just the bulk of data, but the intelligence in that data, the synergy comes from what you add together, not what you leave out. [00:17:00] And it sounds like one part, is completing the other.

I had a conversation recently with a distributor where they had acquired 19 little businesses over the last decade to build up their business. And they had the awareness, however that they were not acting like a multi-billion dollar business, which was the sum of their parts achieve that scale. Instead, they were really behaving as a set of little businesses, still 19 sort of independent businesses, not really getting a reward for having this much bigger view of the market, what customers buy, how to win in the market, what prices went in the market, what products are growing and shrinking and so on. They had local views, but they hadn't pulled it together in a larger view. And they saw that as a deficit and I agreed with them. And I think in any industry where you're having large amount of consolidation, there's that hidden opportunity. I'm not sure that everyone sees it like [00:18:00] you. I don't believe it's on that checklist for bringing the businesses together. Maybe that's a viewpoint we could recommend into the industry is, think about synergies from things that are added, not just from things that are eliminated out of your acquisition equation?

Brian Hirt: Yeah. I think it's huge. Let's talk through a couple of specific examples you can think about, if you're building a pricing model based on your own transaction data, the ability to bring together. If you had two businesses operating in a silo, right? You'd have a price in history established for a certain market and a type of specific type of product. And that history would be driving the recommendations you have. It'd be based on what your sales team was able to understand as the best market price for that product. You add to it. You add you layer on another business through acquisition and you build that into the same model. You could now be looking at, two branches with maybe two groups or two personalities in those branches that have been setting the price and the products that are recommended and they could be selling in the same market. They might be 30 [00:19:00] miles apart or whatever. The ability to bring that data together. It's drive each of those branches to sell the best that they can to reach, hit the best pricing that they can, based on the data we observe know within those two days that I think is huge, right?

It's a case where simply operating separately, bringing them together, is more than just the sum of the party. I would say the same way, just as far as, really it's almost like product comfort. So in my experience where you're bringing together different companies that might have a different historical or sort of core product portfolio, you'll end up with a group of sales reps that, one group familiar with pages one through 50 of the catalog, the other one of those 50 through 100. Right? So people operate in their comfort zone, right? So the sales rep said, no one set of products they're comfortable with tell him they're going to continue to suggest those products. The other group of sales reps are going to continue to suggest the products that they're aware of. When you bring these groups together and you're able to understand, some of them are selling the same customers, this [00:20:00] whole catalog of products. You're going to start to build out essentially profiles. And a way to identify. What's the overall spend for this customer look like? And be able to come up with truly intelligent suggestions about what products they should be able to sell. But that you could give intelligent, confident recommendations to the reps that are only comfortable with pages 1 through 50, about the products, the rest of the products from the catalog that they can suggest to a customer. And ultimately they just don't, it's something they may not be comfortable with to do on their own. It takes the initiative. I have a recommendation that's built on some data science to break that mold a little bit

Barrett Thompson: Subtlety, I think is what you're saying here, but I want to call it out and see if you agree on the checklist of things that happen in mergers.

I commonly do see, "Hey, we're going to move all of our fulfillment onto a common ERP system," for example, or "we're going to put the sales team on the same CRM or the same quoting tools." But when I hear, and what you're saying is just mechanically [00:21:00] putting the data in one place is not the same as combining the intelligence from those data sets or, exploiting that to get a better forward-looking recommendation.

Is there something different between, help me appreciate the difference between the mechanics, which is usually on the checklist versus the data intelligence, taking advantage of that, which may not be on people's minds.

Brian Hirt: Good question. The difference, I'd say, the mechanics or execution, right? So it's, it, obviously, it makes sense to invest in getting people on a common platform, where their order entry, the same way it'd maybe a CRM is the same. Those are I would consider the basics. But when you talk about bringing together these data sets, it's about finding the synergies across the business using artificial intelligence to be able to drive smart recommendations, each of the sales reps in a way that they're not going to come just from putting together the systems. It's about putting together the collective knowledge inherent with data. And then, because you've invested in bringing together common systems, it gives you a common way to get these things out to the sales reps, which is usually valuable. But

Barrett Thompson: [00:22:00] Right.

Brian Hirt: if you just put the pieces together and you've only got the sum of the parts, if you will, you're not adding value through that collective knowledge.

Barrett Thompson: Sometimes when businesses are faced with these challenges: How do I handle my pricing decisions? How do I handle the workload? How do I handle what I believe are opportunities, to cross sell into business? A pattern that I've seen is that often the desire to go on and do that better thing is well understood.

I want to be more consistent in my pricing and I'm not today. Or I want to be more speedy in my quoting and I'm not today. I have seen a tendency to pick an approach that seems like it would work on the surface but really doesn't. Thinking of one example in this space where that the matrix prices that were being used to govern the various geographies that were represented by this distribution business- it turns out those matrix prices were pretty bad. They really didn't align to the market. So as an effect, what this business saw was that their [00:23:00] overrides against that matrix had grown over time and they had shot up like more than a hundred percent over some number of years. And the response to that in the business was to look just at the facial problem.

"Hey, I've had my override requests go up over a hundred percent and we're swamped my price managers that are responsible for approving those are just drowning." And so they took the kind of straightforward answer. "I'll go hire more manpower. Go get more price managers." As they brought them in, they handle this queue tens of thousands of price exceptions every month is pretty big number.

And I guess in one way, mechanically, they got through the problem of handling the volume. They were able to provide a good service level and they were able to apparently relieve the symptom. But shortly after that, they became aware that their prices weren't very consistent. And the reason was because they have so many more price managers now they went from a [00:24:00] handful to actually like a dozen and a half, two dozen, and those managers were giving out different prices. Even when presented with the same quote. There was even an urban legend story about how a few customers had gotten wise to that and what they would do, right?

They would send a quote in on Monday and then they would send it in again on Tuesday. We'd send it in again on Wednesday, same quote, mind you, and they would get back different prices. And then at the end of that run, they would pick the cheapest one and agree to take that one. They were playing the system.

So I wonder if, have you also seen examples where the obvious approach to a challenge. Actually turns out not to be a good approach or it has very unintended side effects. I think that might be good to call out if you've seen anything like that.

Brian Hirt: I've definitely heard the same urban legend about the multiple quotes.

Barrett Thompson: Maybe not a legend. Maybe you've lived it Brian.

Brian Hirt: It was still legend status where I heard it, but [00:25:00] I think that challenge is real. Right? What I've seen is outside of pricing, right? Just within how do we, how do you sell more, what products are being suggested? So I believe, the challenge of understanding which products need to be recommended at which customers are, or identifying, where customers are declining in sales on particular their products. These are not new challenges, or these are not opportunities that I think are unaware of. The difficult part is how to execute on it. And I know, like I mentioned, when I was with that electrical distributor and heading up the marketing team, we would be collaborating with vendors to come up with, " Hey, they've got this new product." We wanted to figure out where it could be sold, but ultimately we had very little tools. We'd fire up our spreadsheets and do the best we could to figure out where they say be pushed out. But ultimately it ended up, we would, I'm guilty of blasting out spreadsheets. Product suggestions and PDA product sheets and things to the sales team to try to desperately get them to focus on the types of products.

Barrett Thompson: And I bet they loved you [00:26:00] for it, right? Hitting their inbox with attachments.

Brian Hirt: Right. Exactly. And so I've seen, I was actually seeing the same muscle approach applied here as a default in a lot of cases. So I think it's, people understand the challenge. And so similar to your example, hiring a bunch of pricing managers, I think people bring their analyst team in or armed people from finance.

They're all right, here are the things we want to go after it. And I've seen dozens of reports and spreadsheets going out to the sales team from expecting them to do some of their own analysis. Filter it down to what's relevant to them. And, in a perfect world where the sales rep have all the time in the world, they might actually be able to do some of those things and create action on it and drive value.

But I think if you talk to those sales reps, they're just overwhelmed with, the noise comes across their desk being pushed from various departments with their own initiatives. As far as the actionability of those things is a little bit vague. But without a doubt the time they have available to do [00:27:00] the necessary analysis to do something valuable is far too limited.

That's what I see on the other side.

Barrett Thompson: Yeah. I think that highlights a theme we hear repeatedly is that more than ever sales teams are asked to do many more things that take them away from customer facing time and selling time. And it sounds like there were shades of that, too. And in the approach you mentioned if you send out a set of reports and expect people to churn through that individually, it's just, it's not going to happen.

They maybe don't have the time or it's not their particular gifting to plow through reports and make something of it.

Brian Hirt: Yeah, absolutely.

Barrett Thompson: Brian, this has been a great conversation to explore what the challenges are in particular, as we've highlighted: It can be turnover. It can be acquisitions. A lot of things flow out of that missed opportunities in the business. Let's pivot for a moment and talk about how electrical product distributors should be thinking about this [00:28:00] and what should they be doing if these other approaches don't work. If these are the challenges and the sort of the reflex action isn't going to get you there. Like what's the better way?

Brian Hirt: To me, it's really all about creating actionable intelligence for your sales rep. And that's more than just a buzzword, but making sure that the guidance you're putting in front of them around, what price to sell products at, what products to suggest is both specific to their case. Right? So it's specific to the customer they're talking to a product, they're looking at but also actionable for them in the sense that it's relevant. It's timely. It's in context of where they're making the decision. It's specific enough to action. I think those are all the key elements to this.

And so ultimately it takes, all these brute force type initiatives where you're just referring to, I think that's where they fall over. Right? They're well-intentioned in what you're trying to do, but the execution of them falls apart when you're trying to scale up, across your sales team, when you're dealing with the complexities of post acquisition, [00:29:00] you've got all this data that needs to be brought together, being able to do those to drive those initiatives. It really just becomes difficult to do by brute force. So that's where I think it, it needs a set of solutions, a set of tools that are able to bring together the data across these, across the different data sources across the product set across the customer base and to drive recommendations out to the sales team using the power of artificial intelligence and, being able to process data at high speeds. You need tools to do that. It's more than a team of analysts in spreadsheets, I think, to do that effectively and to do that at scale.

Barrett Thompson: Brian, that makes perfect sense to me that a tool set of technology that you could put into the business could be incredibly helpful.

Tell us a little bit about the capabilities that you might expect to find or absolutely require in that toolset to address these issues that we've been talking about today, whether it be pricing or cross selling and account expansion and so on.

Brian Hirt: Yeah, absolutely Barrett. So if we think first about pricing. I've had [00:30:00] a chance to work on a lot of different projects across different industries and electrical products distribution. We're building out these pricing models and there's no doubt there's a lot of complexity in pricing. Being able to build out a guidance, that's going to be relevant to the sales reps. I think some of the things to look for in a tool is to understand: How does it manage changes in cost? How is it able to measure price elasticity as you have shifts in the market shifts in your overall cost base.

The ability to smartly manage multiple constraints that are going to come up throughout the design of things, both in understanding the relationship, different products need to have to each other, like to have different customers need to have each other. Those are the things that can help. And we talked about the the urban legend of, be able to get different prices depending on who you call. The ability of a system to handle the complexity that's needed to drive the right guidance in the right situations. What's going to help drive consistency across the business. Also like optimum consistency, right?

So it's not just doing things the [00:31:00] same way, but building out, taking the best answer you're going to get, that's going to maximize the price hits the customer's willingness to pay, to do that consistently involves the ability to manage a complex set of constraints and segmentation that's built around your data, but a flexibility to adapt to different scenarios, the ability of the pricing team to drive different strategies. Those are all the things I would advise you to look forward. When you're looking at a pricing solution. Somebody that's going to help drive the guidance in a way that's consistent and specific to the sales reps, but also have that high level tool for the price you need to bill to drive different strategies and, introduce new objectives as a tool.

When I think about the other side, just simply sales growth solutions around what is it that what is it that's needed to build a drive, the right sales objectives for the sales team? If the current state is sending out spreadsheets with suggestions of products, you think customers on a buy. To me, the things that [00:32:00] really differentiate a smart solution is having things actionable and specific, but also having analytics that are in context, I think is super important.

So when you're delivering guidance to a sales rep to say, "Hey, I think your customer's missing out on buying this product category." So that particular sales rep, they may not be, that may be not on the pages of the catalog they're comfortable with. Right? So what sort of analytics can you provide along with that to help them understand?

Not saying they have to do analysis, but proof of, "Hey, here are the similar types of customers or here's the profile we've matched the customer to." We think there's a high likelihood they're buying this product from someone else. And to be able to provide that in context when they're seeing the guidance or, "Hey, we've observed that they're not buying as much of this product as they used to." And actually showing a chart that shows what does that spend pattern look like?

It gives a sales rep equips them with everything they need to be able to understand the recommendation. Decide if it's relevant. Make that suggestion to the customer, but also then have the tools they need to pass that question in the right way to the customer. So that can be as [00:33:00] simple as, "Hey, when you see, I see this product, maybe I can also tell you which vendors I think you're likely to buy, but I can suggest that along with it, or if I know you're declining on a particular category, to build up without having to go in and query the BI tool to understand what are the parts that you know, you're not ordering, they used to buy it."

Those are all things I think should be part of a solution that's going to drive that prescriptive sale.

Barrett Thompson: Thank you for sharing that. Your experience is so valuable here. One other question I'd like to ask, I think many in the podcast audience would be asking themselves: What does a typical project deployment look like? Is this a big lift? Are we talking about years of effort to begin to get some results going into this?

Brian Hirt: Yeah. At Zilliant we have the experience of doing this over and over again across multiple companies in the same industries, but across different industries. And so we've built a process around it then it's, ultimately these implementations can be quite straight forward. It's about bringing together the data. And I don't mean to minimize the challenge of that when you're dealing with, often you're still dealing with multiple ERPs after the [00:34:00] acquisition and figuring it out.

Consolidating product catalogs and things like that. Those are real challenges. I think it takes effort to do that correctly, but ultimately those are worthy investments and we can ultimately take whatever data you have and whatever state it is and drive value through that in your model.

And so there have been many cases where we're, I'd work on a project and someone was wrestling with feeling like, oh, the customer classification we have is not perfect. Yeah, the product hierarchy, we have isn't perfect. Those are things that everyone is dealing with. And so nobody has the perfect hierarchy, the perfect customer classification. But we've continued to build models and drive value based on those imperfect datasets.

So ultimately it's about bringing together the data that you have putting it through a, we have a process where you can build out a predictive model and then deliver the insights in a front end, that's familiar to your teams, whether it's the CRM system they're already using that according to applications they're already using.

Sometimes we're delivering things directly to email. With our solutions, we're not trying to be disruptive. We're trying to fit seamlessly into the process that you have. And we're [00:35:00] doing these in months, right? We have many cases where within a few months where we're going from concept of getting the data feed set up into delivery insights and pricing guidance directly to the sales.

Barrett Thompson: That's great. Because what I hear is there's always a sense of urgency when it, when the business is ready to make a change and they're ready to make that difference, usually, they want to go. And it's great to hear that's something that can be done in a short order and begin to make a difference, say next quarter, if you get on it right away. Appreciate that.

Thank you so much for joining us today. Brian, it's been great to hear from you and to get your perspective and draw on your experience. We really appreciate your time today.

Brian Hirt: Yeah, great talking with you. Barrett.

Barrett Thompson: If you'd like more insight on the electrical products distribution vertical, and how to reimagine your business challenges, we've got a free downloadable white paper for you.

You can find that at www.zilliant.com/electricalplaybook and that same URL will also be in the show [00:36:00] notes on your podcast player. Thank you so much for your time. We look forward to chatting with you again on our next podcast.

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