Customer Data: Distributors Caught In The Middle

As true middlemen in the supply chain, distributors have a real tightrope to walk on the issues surrounding customer information.

Distributors still view end-user information as privileged data and will continue to guard it accordingly, said several distribution executives.

Slide Show: Who Knows Your Customers?

"Disclosure of any customer data is not fair game, especially end-user data," said Bob O'Malley, senior vice president of marketing at Tech Data, Clearwater, Fla. "We've worked long and hard to earn the trust of our customers for private-label delivery. We don't want to jeopardize that trust."

Distributors themselves capture more information than they did in the past, compiling it into databases used to mine more opportunities with solution providers, O'Malley said. With this, distributors can give solution providers information such as expiring warranty contract opportunities. The same information could be refined to help vendors, without sharing every bit of data, he added.

But dIstributors must always to be sensitive to their solution provider customer needs, executives said. "There's always some pushback with resellers not wanting to provide customer info. In most cases, it's for special pricing programs from vendors and it's required. I think more people understand that now," said Rob Kalman, vice president of U.S. marketing at SED International, Tucker, Ga.

Distribution executives said they've been fending off the manufacturers' inquiries for several years, but the intensity and volume of requests has increased.

Many vendors offer end-user-specific pricing, a model that necessitates more customer information being passed on to vendors, said another distribution executive who asked not to be named. "Part of the condition of providing that special price is [end-user information]. Our default position is to try to understand what purpose the information serves to the vendor," said the executive. "Why do you need this level of detail? We don't blindly say, 'OK.' "

The distributor's willingness to share end-user information also depends on the vendor's channel history, another executive said. "There's more sensitivity with certain vendors than there is with others," he said. "Vendors that show a propensity toward taking customers direct, we will have more sensitivity. We don't just send any information around on what I sell."

Yet another distribution executive said his company has backed out of entire markets—in essence fired vendor partners—because they didn't know or care how their products were being sold. "Absolutely we've done that," said the executive, who asked not to be named. "When you make investments in people, to learn the product, to sell the product effectively, then to find product available for much less than we buy it for, it doesn't make sense," said the executive. "Vendors have to clean that up or they will destroy one of most valuable ways to reach the market—through the channel, through distribution."

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