An intermediated truth – how wholesalers can improve the end-customer experience

by Giovanni Saraceno

It’s an oft-cited truism: in today’s digitally enabled world, it’s increasingly important for businesses to adjust to shifting buying dynamics and meet heightened customer expectations. Less cited is how challenging this predicament is becoming for intermediated organisations, i.e. wholesalers – who operate with channel partners between them, and their end-customers.

The added difficulty stems from the ‘love-triangle’ relationship dynamic. On one hand, wholesalers need to appropriately manage their channel partners, who they rely on for scale, access or service provision. On the other hand, they need to ensure their products delight their end-customers, with which they may have only limited data or insight on.

Wholesalers know they need to stay close to the pulse of their end-customer if they’re aiming to meet evolving expectations, but are often divided on the ‘how’.

So how can intermediated businesses understand and improve the end-customer experience?

We believe the answer ultimately depends on the role the channel partner plays within their market. At a high-level, this could be the provision of market access, market preference or market coverage.

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These approaches aren’t necessarily mutually exclusive, and some businesses might see themselves forming their solution by leveraging elements from each. But no matter the situation, if businesses seek to improve the end-customer experience, it is crucial that they engage with consumers directly to understand their preferences (rather than relying on channel partner-derived insights), and seek to remove all friction from the handover between wholesaler and channel partner.

The framework below illustrates how the approaches can be applied against a holistic understanding of the end-customer journey and experience.

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Approach 1: If channel partners provide market access…

Regulatory barriers often make the prospect of engaging with the end-customer directly, daunting for wholesalers. But not all types of engagement are actually ‘off limits’. Therefore, wholesalers should define where they can influence end-customers along the journey, then focus on nurturing them through their preferred channels as far as possible to facilitate smooth handovers with channel partners. 

To do this effectively, wholesalers must take a three-step approach:

  1. Map out the end-consumer journey to understand their channel preferences and moments that matter, factoring in compliance requirements
  2. Focus on providing supportive content to accelerate journeys in a scalable manner
  3. Ensure channel partners are equipped with the knowledge and assets to breeze through the purchase process without bogging down end-customers with new paralysing considerations
We’ve seen this work effectively in the highly regulated, B2B Telco market. Obfuscation from retail service providers created an opportunity for wholesalers to act as the consumer ‘voice-of-reason’, which they leveraged through their content assets to nurture end-customers up until the moment of purchase.

The critical piece for wholesalers faced with the market access challenge is the breadth and personalisation of their engagement. Influencing end-customers early and often across the journey will help build trust, while investing in dynamic content capabilities will tailor the digital experience, ensuring content is relevant, and cuts through.

Play 2: If channel partners consolidate market preference…

It is understandably difficult for wholesalers to drive product demand when the channel partner controls the environment in which customers are purchasing. So the question remains; how can businesses create customer demand through the intermediary channel? We believe organisations must leverage a best in class service / product experience as the catalyst for creating enduring brand loyalty, which will become the pillar for driving future customer demand through all sales channels and partners.

To over-deliver on experience wholesalers must:
  • Engage end-customers to understand their expectations and map moments that matter across the service journey
  • Implement a holistic feedback mechanism, identifying gaps between expectation and experience across the journey
  • Prioritise and ruthlessly execute capability, process, and product changes required to uplift the customer experience
  • Continually evolve technology and processes to seamlessly integrate the wholesaler and channel partner handovers
A prominent example of this, can be seen in the way that banks influence the broker-consumer relationship. Customer loyalty is of incredible value to the business, however it can take years to develop and seconds to lose. Developing a loyal customer base not only enables the bank to provide a direct self-service portal to their familiar customers, but also a super compelling value proposition and frictionless sales experience, driving product engagement through the broker channel.

Through investments in platforms, products, and customer advocacy, banks can evolve value propositions, compelling customers to purchase their products across multiple channels.

Play 3: If channel partners provide market coverage…

Channel partners can prove invaluable, providing coverage in markets that were previously inaccessible due to logistics and scale. This of course comes at a cost – they can also capture a significant portion of profits and in some cases, restrict access to customers. It’s our opinion that wholesalers looking to improve customer engagement should aggressively cut out the middle-man for segments where the business can provide direct service to customers.

The best practice approach to identifying which segments can be engaged and how, is as follows:
  • Analyse operational, financial, and customer data to develop an opportunity-based segmentation model, identifying how preferences and needs differ across cohorts and providing a nuanced view on customer priorities
  • Perform channel economics calculations to understand current and future cost-to-serve based on preferences, recognising where digital engagement and self-service is an option
  • Invest in the capabilities allowing you to engage with customers at scale, enable digital self-service, and fulfil orders in line with competition
Developing the capabilities needed to directly serve customers, will decrease the cost-of-sale and empower wholesalers to better own their end-customer experience. While this approach certainly has its risks, one successful pilot can be seen in the example of Unilever UK. Here, a partnership with a delivery service has enabled Unilever to facilitate direct-to-customer sales of their Hellmann’s mayonnaise brand, improving profit margins and empowering the organisation to take control of their customer experience. An added bonus for them is gaining access to end-customer data for the first time, generating new insights for the organisation, supporting the optimisation of marketing and sales activities.

The important play for wholesalers challenged by market coverage is to leverage end-customer data and find opportunities to better meet customer preferences using digital and direct engagement.

Key takeaways

Despite being one layer removed from their consumers, intermediated organisations have just as strong an imperative as their direct-to-customer counterparts; to deeply improve the customer experience. Yet too often we see wholesalers playing a passive role in meaningfully engaging with end-customers.

By understanding the end-customer journey and identifying whether the channel partner is playing a market access, coverage or preference role, wholesalers can then ensure they have a fit-for-purpose approach to building loyal end-customer advocates. Those that rest on their laurels risk losing touch with, or worse still, becoming irrelevant to their consumers.

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