The Power of Qualitative Analytics

James Dorn and Tom Gale explore how to collect qualitative data to ensure distribution associates are in tune with what their end customers most value.

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Podcast Transcript:

Tom Gale: Welcome to this edition of MDM’s Quicktake. I’m Tom Gale. My guest today is James Dorn, president and CEO of Dorn Group, a strategic advisory to manufacturers and distributors. James, welcome.

James Dorn: Thanks, Tom. It’s great to be here.

TG: James, as you know, we’re passionate about the power of data analytics and how distributors can make better data-informed decisions. And while quantitative data analytics, particularly financial metrics and KPIs are clearly the heart and soul of most analytics teams and distribution, qualitative data and research can provide what the quantitative side can’t. There are countless case studies, and I’ve seen time after time in distribution that high performance companies have developed capability in deploying both the quantitative and the qualitative analytics where they can gain the best possible input for creating strategy or making critical decisions. So today, I’d like to get your thoughts on an aspect of qualitative research that I know you are passionate about, and specifically it’s around voice of customer, supplier, and associate research.

JD: I got to say, right out of the gate here, Tom, this is a hard topic for people to wrap their minds around because they’re just so used to trying to dive into their business and improve it day in, day out, right? Talk to the customer, get some input, and then make some adjustments and move on. If you’re going to make big bets in your business, try and have really good in information to back that up. I’ll give you a quick example here, Tom. Like we’ve been doing benchmarking with distribution for gosh, the last decade, asking associates at distribution key questions, asking their customers key questions, and we’re talking thousands of end customers, thousands of associates, and even suppliers, to where we ask them consistent questions year over year. And we try and understand where the gaps are and where things are trending. And we recently published some research where the top two gaps that we noticed between what associates believe to be valued the most by their customers was a huge gap between what the customers actually responded as what they valued most from distribution.

So the top two Tom were asking associates, “Hey, what do you think customers value the most when working with distribution,” and a lot of the associates had ranked working with the account manager as one of the highest things that customers would value. But when you ask the customers what they valued most, that was actually one of the lowest things that they valued. So right there, you have just a really big gap in perception, and if you’re a distribution leader making big decisions off of some of the input that you’re getting from your associates, you want to make sure that you’ve actually got a good representation of information coming back directly from your customers to where it’s coming back to you in an unbiased manner we’ll say.

TG: How hard is it to put together these types of surveys or talk a little bit about the methodology and process to make sure you’re getting good results?

JD: It’s actually really straightforward. It’s not a heavy lift for distribution at all. I mean, you could work with firms like us or you could even do it internally if you’ve got that capability across your team. The way we frame it out is we look at three sources of information that you want to seek information from, your customers, your associates, and your suppliers. So you design basically a questionnaire and a survey, and you go out and you get that questionnaire answered from each one of those audiences, and then you take the findings and you basically start to overlay the findings across those three sources.

And a few things emerge. One is you’ll start to notice gaps where there’s just a misconception between either one of those stakeholder groups, but you also start to see some insights emerge. Some of the insights could be, “Hey, customers value e-commerce a lot more than our associates think they value it. So how do we put more investment behind some of our digital tools and some of our digital selling,” things like that to where you start to see really some of the trends that are changing, especially at the customer level of how they want to do business and what they want to see from your distribution firm.

TG: There’s a couple of different tools out there that are somewhat standardized, and so there’s net promoter score, right? But I know there’s also, you’ve got the customer satisfaction score metrics, customer effort score metrics. In your experience, what do you think are the most important? Or is the answer, it depends?

JD: No, it’s definitely really specific here, Tom. I think the level of questions that you want to get to is beyond just satisfaction and specifically with the different parts of the business, you want to try and identify areas in which you can deliver new value back to your customers. And so the questions that you’re asking are far more specific than say like NPS would be, or standard customer SAT would be. So I mentioned one of just simply, “Hey, what do you value most from say working with a distributor like us? Is it fast delivery? Is it low pricing? Is it working with e-commerce website?” And you start to see what patterns emerge of where customers are truly putting their emphasis in what they value most from a distributor we’ll say.

TG: James, you talked about ability to identify gaps, whether you are taking a look at the comparatives between customer, associate supplier. What do you do with that then? How can you make this actionable?

JD: It really comes down to you’ve got to get data from those three different sources, and you’ve got to ask the questions the same way to each source. And once you have that, you can overlay the data across the three sources in 360 degree view. And this is where a patterns start to emerge of where there are gaps and where there are opportunities. And the power of this is it’s using information directly from each source. So the information you’re getting back, it’s not anecdotal, it’s not watered down, it’s accurate information. And especially if you’re trending this year over year, you’re starting to see even more patterns emerge. But what it helps you do is actually build winning programs and winning playbooks based on the information that is accurate and super informative to how you deliver more value to your customer. And I can’t tell you how many times, Tom, that we’ve presented this research back to our clients, and there is always, always people surprised at what the data is actually showing.

Part of the reason why they’re so surprised is because they’re getting information day to day, sometimes by the hour from their coworkers. And the information is just not painting the whole or a complete picture as to what’s actually going on in the business with each one of those sources. So there’s always tremendous insight that is derived out of this process, and I would highly recommend it for all the distributors out there who are looking to make changes in their business and want to make those changes based on information that comes directly from the source.

One more layer that could be added onto this, Tom, is we collect and sanitize this data across countless distributors over the last 10 plus years. And that’s also could give distributors another point of view as to, “Hey, what does our firm look like? What are we seeing directly with our sources? But how does that compare against others in the industry?” So that could also be another layer of data that could be provided here.

TG: There is nothing like the power of benchmarking, and I’m so glad we’re ending this conversation on the power of the qualitative analytics around that benchmarking as being just as important most instances as the quantitative piece.

JD: Absolutely agree Tom.

TG: Pleasure to be with you. I look forward to our next conversation, and it will be before our July 19th profitability summit that MDM and Dorn Group are co-hosting.

JD: Yeah, thanks Tom. It’s great to be here and super excited about that upcoming summit. It’s going to be a lot of excellent content, and that’s coming from just a top-notch group of presenters. So looking forward to seeing everybody there.

TG: James, as always, thank you. Look forward to our next conversation.