I Depend on You… But Do I Trust You?
In my last rant, I addressed the topic of dependency. If you missed that story, click here. End-users are dependent on Distributors to deliver what they ordered. Distributors are dependent on Suppliers to complete that transaction. Suppliers are dependent on Distributors to bring them orders... and of course pay the invoices on time. We are all dependent on each other!
At times, this need for dependency, although necessary, is just a bit scary. And our dependency need sets the stage nicely for this rant, which addresses another industry relevant topic... TRUST. That is the second part of the equation that goes hand in hand with being dependent.
This is a topic that I have wanted to cover for a while. Just in the past few months there have been big controversies highlighting trust issues. There was a big controversy over PPAI's Hosted End-User Buyers Program at the PPAI Expo, which ultimately was rescinded. There was a website that calls out "Shady Suppliers" with a tagline, Stealing Your Clients Like a Thief in the Night. If you missed that story, click here. It's my feeling that the root of these issues is a lack of trust. Maybe there is a justification for a lack of TRUST, but the question I ask is, where does this leave us as an industry if we can't trust one another?
To address this important topic for the FreePromoTips Community, I called on past PPAI Chairman of the Board, Paul Kiewiet, MAS. Paul is passionate about our industry and is a seasoned promotional marketing veteran. Paul "gets it" and has covered trust in great detail in an article we are featuring on FreePromoTips.com.
"Our industry has changed. Our channels have changed. The ability to keep secrets has changed. The needs of the market have changed. Our value propositions have changed. I propose to you that lack of trust is a symptom of the race for the bottom. The acceptance of commoditization results in price over loyalty, price over relationship, price over value."
"Our once simple 'sacred' channel was S-D-E. Supplier sells to Distributor who sells to End Buyer. In those wonderful times the supplier was the manufacturer and the decorator. The distributor was a principle who used the mushroom farmer approach to managing a sales force of independent contractors who were kept in the dark and—well, had fertilizer thrown on them."
"Today things aren't so sacred and not so simple. Much of the manufacturing has gone overseas making the Supplier either an importer or working with an importer. The manufacturers may know nothing about our channel of distribution and sells to importers and suppliers as well as anyone coming to them with an order whether they be distributors or end-buyers. A good share of the decorating has moved from suppliers to either contract decorators or to distributors who have invested in equipment and personnel to be able to control the quantities, lead times and quality of the decorating."
"Distributor principals rarely own the relationships with end-buyers. The distributor sales person often owns the relationship with the buyer and thus wields substantial clout. Usually, when a sales person leaves a distributorship, they take between 75% and 90% of their business with them."
"Moving safe, compliant, quality product from design, manufacturing, importing, decorating, delivery and usage by the intended audience at a specific time, to meet specific objectives at a specific price while delivering an ROI to each link in the chain of distribution requires partnerships and partnerships DEMAND TRUST."
"Trust is a key component for business success. It is also a choice. It is also soft and emotional. It is also hard and logical. Trust goes to ones individual values and attitudes. It borders faith and hope. It requires taking a risk, which is counter to the business principle of mitigating risk. Emotionally, it is where you expose your vulnerabilities to people, but believing they will not take advantage of your openness. Logically, you have assessed the probabilities of gain and loss, calculating expectations based on past performance and concluded the entity will behave in a predictable manner. It is a bit of both. I trust you because I have experienced your trustworthiness and because I have faith in human nature."
Click here to see Paul's entire article on the very important topic of trust.
So where do we go from here? We are in a great industry that is facing many challenges. As Paul astutely notes the existing Supplier - Distributor - End User model that has served our industry well for many years is being challenged by today's global marketplace. This means that now more than ever we need to offer value to our clients, whether we are a distributor or a supplier. And we need to trust each other to grow our businesses together. Without trust our industry will be over.
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