Customers Recognize the Value of Distribution
A recent survey commissioned by the American Veterinary Distributors Association reinforces the value of distribution in customers’ eyes, and points to ways distributors can maintain and improve their value in the years ahead.
“As a distribution partner, we are extremely happy that the survey respondents heavily support having the distributor handle clinic orders from the start of the process in sales presentations to the final steps of shipping, delivery and financial transactions,” says AVDA board member Jeff Morrison, manager of business development for Merritt Veterinary Supplies.
“The clinics look to the distributor sales representatives to keep the practice informed on the industry and tactics to employ in the practice to grow. They look at their distributor representative like an unpaid consultant.”
The Wedewer Group, which performed the survey on behalf of AVDA, surveyed 320 decision-makers in U.S. veterinary hospitals who are part of VetMEDResearch, a research panel of U.S. veterinary professionals. An additional seven participants were recruited to the survey by AVDA members in order to boost the number of large/mixed/equine veterinarians participating.
To qualify for the survey, participants had to identify themselves as the product decision-maker or a primary decision-maker for the practice. The Wedewer Group excluded corporate practices (such as Banfield) and people who did not order from a distributor in the past year. The final data includes responses from 293 from small animal practices (85 percent) and 34 from large/mixed/equine practices (15 percent). Of those, 279 were veterinarians (85 percent) and 48 were office managers and veterinary technicians (15 percent) responsible for ordering. Sixty-one percent were women and 39 percent men.
About a third of participants were in solo veterinary practices. Fifty-eight percent were in practices with two to five veterinarians, and 6 percent were in practices with six or more veterinarians.
“One of our goals was for manufacturers and distributors to have a better understanding of the distributor value proposition and to reinforce the power of distribution through survey data showing why veterinarians choose to purchase from distributors and manufacturers,” says AVDA Executive Director Jackie King.
“AVDA’s hope was that the survey results would show clear preferences among veterinarians to order and work with distributors over manufacturers and create a business case for manufacturers to utilize distributors rather than direct sales. We are very pleased with the results of the survey that show these clear preferences exist and that the relationship between distributors and their veterinary customers is very strong.”
Veterinary Advantage spoke with AVDA Chairman Paula Brown, Midwest Veterinary Supply; Jeff Morrison; and board member John Francis, vice president and general manager, Specialty Resources Group, MWI Animal Health, about the survey and its implications for Veterinary Advantage readers.
Veterinary Advantage: What two or three points about the survey findings should distributors find most gratifying or reinforcing?
Paula Brown: Veterinarians depend on distribution for one-stop shopping. We have it all – ease of ordering, paying their bill at one business, rep frequency of visits and the fact they are knowledgeable of all manufacturers as well as industry current events. Our customers appreciate online shopping, because they can take their time and make sure they order everything they need. More items in the box means reduced costs for all.
Jeff Morrison: As a distribution partner, we are extremely happy that the survey respondents heavily support having the distributor handle clinic orders from the start of the process in sales presentations to the final steps of shipping, delivery and financial transactions.
As for why clinics overwhelmingly prefer distributors, the responses mirror today’s overall society preference for ease of life. They cited ease of ordering online, better use of staff time for ordering, receiving orders, paying bills and time spent seeing reps. They repeatedly used the term “ease” when giving specific responses – ease of ordering, ease of returns, ease of paying monthly statements, etc.
Many veterinarians / order persons view the distributor rep as a partner to the practice. They see the distributor rep far more frequently than the manufacturing rep. The distributor rep is more aligned with the practice’s needs and less tied to any particular manufacturer or product. The clinics look to the distributor reps to keep them informed on the industry and tactics to help the practice grow.
John Francis: The time of our customers is limited. One of the key takeaways is that we are easy to do business with. We offer online options; we are a one-stop shop by phone. That’s exceedingly important to them. The more we offer time-saving features and accommodate the time pressures of our customers, the better.
The fact that the distributor represents the full range of products is also clearly important to the hospital. We are seen as an objective third party. Distributors represent choice to the customer. This puts us in a very unique position, and it’s important that our sales reps have knowledge of all the choices they can present.
Veterinary Advantage: What does the survey identify as areas for improvement for distributors? What are the take-aways for distributors, and how can they be addressed?
Brown: Our customers routinely order equipment and diagnostics from manufacturers. These are large investments, and they’re looking for very detailed information. As distributors, we should keep reminding our customers that we are educated on these products as well, and can assist them with these items.
Morrison: There were three comments that we as distributors must address in order to avoid conflicts with manufacturing:
- “Manufacturers have ‘fresher’ products, such as vaccines.” We must convey that distribution receives and sells the same products as potentially offered as a direct service from the manufacturers.
- “Manufacturers offer better discounts/promotions on specific products.” As a true partner with manufacturing, distribution needs to reinforce that we abide by MSRP and manufacturing programs to avoid the perception that we compete with our manufacturing partners for the same products and services.
- “Most distributors have strange billing systems that cannot be understood; it seems to be a way to overcharge.” This view deeply concerns me as a potential roadblock to being a true partner with the veterinary practice. We cannot thrive if our practices do not fully trust the distributors’ billing systems and even suspect that it is a method to overcharge. Being a partner means being transparent in our relationships between the veterinary practices, the manufacturing companies and distribution.
Francis: We have to keep in mind the importance of our customers’ time limitations. We also need to accept that there are times when the deeper knowledge of manufacturers is what’s needed. As distributors, we need to make sure we are inclusive of manufacturers in such situations, because the customer is better served.
Veterinary Advantage: Decision-makers identified several features as key benefits of working with distributors, including: ease of ordering; larger selection of products; frequency of seeing distributor rep; a “Switzerland” approach to products; prompt delivery, order accuracy, etc. Care to comment on any of these?
Brown: This validates the need for distribution. They are all important factors to being a sales representative and distribution company.
Morrison: The major take-away was that 62 percent of respondents cited ease of ordering. Distribution offers a one-stop shopping venue for virtually all the practice needs. Distribution is viewed as the go-to for information across the vast line of product options and choices. By aligning with distribution, the practice recognizes the time-savings for their personnel.
The other major benefit to distribution that was reported was seeing the distributor rep frequently. We all battle the same enemy – time utilization and lack of more time each day. The veterinary practices see the distributor reps as unpaid consultants/partners to their practice. This should not be viewed as a slap to manufacturing; rather, it should reinforce the need for distribution and manufacturing to work closely to support the practice. With good field relationships, distribution should value the shared time in a practice to increase their product knowledge, and the manufacturer can benefit by gaining time in a clinic through the distributor relationships.
Francis: Ease of ordering must embrace technology. Anything we can do to improve online ordering to accommodate the time limitations of our customers is good. I’ll go one step further: Online ordering can take care of the basic needs of the customer; direct conversations – either in the hospital with the rep or on the phone with an inside rep – are appropriate for special orders, conversations about new products, and answering key questions.
Veterinary Advantage: What does the survey tell us about the role of the distributor salesperson?
Brown: Customers rely on the distributor sales representative for more than just selling products and taking orders. The survey shows that practices see distributor reps more often than manufacturer reps, and their relationship with them is different. Distributor reps were rated higher in understanding the unique needs of the practice. We’re more readily available, and able to assist in resolving concerns they may have. But we can’t do this alone. We value our manufacturer representatives, as they bring important information to the clinic as well. Our teamwork is what makes the difference, and it shows the customer just how comfortable we are with our manufacturing partners, and that we trust each other.
Morrison: To be a true asset, we need to know the practice, know the people, ask questions and learn something on every call. That will make the rep a welcome sight every time he or she walks through the door of the practice.
As a distributor representative, we need to know our products. We don’t necessarily need to be the expert, but we do need to be prepared and follow up promptly. The practice expects the distributor rep to provide a non-biased presentation, and always provide insight that will benefit the practice. Effective distributor reps should not dictate practice decisions, but should provide the information to allow the practice to make the best purchasing decisions.
Francis: The rep needs to be the advocate for the customer, either with his own company, or the manufacturers whose product lines they sell.