The Business We're In

I'm hearing a lot recently about the business. Not just the typical "how's business?" stuff but more like "what's business?". It's more than semantics. It's important.

I think it's a change of season--and an important one. To wit:

• A large performance improvement company has dramatically expanded its offerings in an effort to provide a more "Amazon-like" experience for its participants
• That same company is using software that "shops" every price, for every order, to determine which company offers the lowest cost
• More and more end-users are demanding a retail-like experience that provides virtually limitless choice for the participant
• Some suppliers sell this channel through multiple access points--do you have any clue how many different ways there are to buy, say, Garmin? This leads to retail-like competition.

I mean, can you blame our clients for "shopping" us? If there's 10 places to buy the product, and many of them are Internet-based with little overhead, wouldn't it stand to reason that there may be fluctuations in how much our stuff costs?

And all of this poses a challenge for us "traditional" suppliers--the notion that our business is becoming increasingly a Procurement process instead of a Recognition process.

If we're in the Procurement process, then the low-cost provider will get the lion's share of the business. Score one there for Amazon. Also, suppliers that sell to "master distribution" invite a "reverse option" of sorts--a poison that erodes both our Perceived and Actual Value to the client base.

An Amazon-esque experience is fabulous for the participant but lousy for the vendor. In a program with 10,000 (or more) items, how can an individual vendor be valuable? Where does our client go when they need something "special", or support to create a new event for the end-user? To Amazon? Please.

In a Procurement environment we become less important than we already are, and that's saying something. I've been railing for years that manufacturers are essentially the last link in the chain--the final step in the process of Recognition. If we enable (or, God forbid, encourage) our clients to be in the Procurement business we lose what little value we had and that is Bad News for reps and people who do what I do.

What most of us still believe is that we are in the Recognition business, albeit at the very end of that process. We better learn how to provide more value to the Recognition Process or else we'll be left behind by our clients. Remember--THEY'RE the ones in the performance improvement business--suppliers and reps are most certainly NOT in that business. We're in the "stuff" business, and we're endangered by new technologies and paradigms.

Fatal? Absolutely not. Challenged? You bet. We cannot change the way our companies sell product to the retail space, so we need to create "value-add" to our clients or they will find our stuff elsewhere.

And why would they do that? Because they can...


Pete