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Distribution Technology - Customers
Solving customer problems means finding accurate ways to determine not only what products and features they are currently using, but also accurately predicting what they will want and need in the future. One of the greatest barriers companies face in doing business over the Internet has been the unwillingness of many customers to depart from their own traditional ways of doing business. Studies have shown that customers like to stick with what they are already doing, even if it is not the most profitable way, or even the most convenient way. Fundamental change occurs, but not always as quickly as predicted, and not always in the direction that the trend watchers have forecasted.

Studies show that while the Internet will become a more common vehicle for doing business over the next two years, it probably will still not become the dominant way. Whereas industrial customers send only a small percentage of their orders by electronic means today, it is expected that figure will continue to rise significantly over the next two years. The other common means of placing orders - via a sales representative, phone or fax - will still continue comprise the bulk of ordering mechanisms going forward.

On the other hand, the same studies predict that customers will continue to expand their Internet communications capabilities. The Internet is becoming the prevalent means of locating new supplierssince it provides far greater efficiency and time-savings over conducting a telephone search. Increasingly, the Internet is also becoming the dominant mechanism for order tracking, as well as order and inventory management. These are trends that are already surfacing and are expected to remain constant in the near future.

Companies that wish to remain viable in both the current and future markets must learn to gauge changing priorities and act in concert with them. That means understanding the end-use customer in new ways; understanding what attracts them to a product in the first place and how to keep their business in the long run. The only way to develop that kind of understanding is to engage in realistic self-questioning techniques and to be willing to accept and respond to the results. For instance, companies need to know which customers are most important to their business, why customers chose them over a competitor, and what precipitated getting the deal closed with the companys biggest accounts. If large customers have been lost in the past year, the company needs to determine why. If customer priorities have changed, is the company placed to meet those changs? Only by asking difficult questions and reacting appropriately to the answers can companies hope to stay ahead of the game.

Management teams need to be prepared to take their questions to the customers themselves, as well as discuss and attempt to understand what turns the company may need to take. Insiders, while knowledgeable, arent always the best source for providing trend data. Customers, suppliers, distributors, and even consultants, should figure strongly into the data mix.

Only by gaining a substantial understanding of what lies ahead, can a company react quickly and effectively in todays unpredictable and competitive business climate. And, rather than preparing just one strategy for reacting to customer needs, it may prove quite valuable to be flexible enough to react to alternate possible trends.

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