5 Questions To Ask Yourself
Could your group survive if your largest member left?
Are you a hostage to your largest member? What would happen if they left your group?
A valuable exercise is to review the numbers for your group without your largest member. What would your overall purchase volume be? How would the remaining members’ rebates be affected? What is the impact on your operational budget?
For some groups, this exercise may cement the need to keep this member within the group at any cost.
For others, this exercise will remove the fear of the unknown and present the problem in practical terms. It may be tough, but you can see a strategy to survive.
An interesting alternative to this question is “What would happen if my smallest members left?” No one wants to lose members, but would eliminating members who add minimal purchase volume but add to your workload and expenses benefit your group? I don’t know. Run the numbers and find out.
If you took away rebates, does your group still provide indispensable value to your members?
What value does your group provide to your members beyond rebates?
I’ve spoken with some industry people who are convinced that rebates will eventually disappear. If that happened, is there still a need for your group?
Member value has been a key discussion point amongst groups for years. Added value can include:
- Sales/product training
- Making technology available
- Advocating within your industry
- Supplier shows/conferences
- Gathering and distributing product information to fuel member e-commerce
- Financial aid through capital loans
Whether rebates are on their way out or not, adding value to your members beyond those rebate programs will make your group – and your members – stronger.
How secure is your data?
Here are the facts: the number of cyber attacks in North America increased by 52% from 2021 to 2022.
- 30,000 websites are hacked every day.
- Average ransomware payment is more than $570,000 (this number is rising)
- It costs a business an average of $4.65 million to deal with a phishing attack.
- 94% of all malware is delivered by email.
- 60% of all small companies that suffer a cyber-attack go out of business.
Despite these numbers, most businesses have their head in the sand, thinking that a cyber breach won’t happen to them. One recent study reported that nearly 60% of small businesses think it’s unlikely they will be targeted in a cyberattack. Don’t fall prey to the “it couldn’t happen to us” mentality.
Data security is an even more sensitive issue for groups because arguably the group does not own any data. They borrow their members. Any data breach of your group puts your members’ data – and your members’ customers’ data – at risk. What would the impact on your group be if news that your group’s data was breached?
What can you do?
- Recognize that a very serious risk exists
- Develop a set of “best practices” around cyber security both for your group and your members that includes multi-factor authentication, anti-malware and workload protection tools, email and anti-phishing security, etc.
- Back up and keep all of your software up to date
- Invest in data encryption and make sure all data is encrypted
- Design a training and response plan.
How well can you see into all areas of your group?
A lack of visibility into all areas of your group can lead to unexpected setbacks and challenges. It is difficult for a group to see what’s going on with all members and all suppliers in real time from various channels. However, with the right tools in place, you can see and predict what is happening.
Tools such as LBMX’s private group marketplace aggregate your members’ purchasing data. Coupled with LBMX analytics, this gives you easy access to real-time data in a unified dashboard. Your group can begin to analyze need-to-know data such as purchasing patterns, rebate forecasts, sales trends, and supplier distributions without compromising member privacy.
Your goal should be adopting technology that gives you greater visibility, improved group resilience, a better experience for members, and increased operational efficiency.
How can you improve member experience? Supplier experience?
Your group sits between your members and your suppliers. Ask yourself if your group gives members and suppliers the best experience possible. If the answer is no or “there’s no room to improve”, it’s time to consider a fresh approach.
How can you make it easier for your members to belong to your group? What headaches or friction points exist?
What are the biggest challenges for your suppliers in terms of selling within your group? What can you do to remove these obstacles to the benefit of everyone?
Answering these questions honestly to yourself will trigger new thoughts and new ideas. Let 2023 be the year your group understands the value and risks of each member, identifies new ways to add value to your members, increases security, improves visibility, and enhances the customer experience of your member- and supplier-partners.
Written by Steve Seguin
LBMX offers a business-to-business marketplace platform, helping independent businesses, their buying groups, and suppliers buy better and sell more. Its Private Group Marketplace for Groups has transformed billing and ordering, rebate management, real-time analytics, e-commerce and product information management across the building materials, HVAC, plumbing, sporting goods, industrial supply, manufacturing, and agricultural industries. Its LBMX Supply Cloud platform allows suppliers to look at their industrial distribution customers through one lens, offering full EDI, PIM, Analytics and Payments.