How Wholesale Distributors Can Make Sense Of (and Profits In) Today's Environment

[00:00:04] Welcome to Around the Horn in Wholesale Distribution with Kevin Brown and Tom Burton. Sponsored each week by LeadSmart Technologies, Tom, Kevin and their guests review the news of the week and dive deep into the topics impacting manufacturers, wholesale distribution, independent sales agents, and the global wholesale supply chain.

[00:00:24] Whether it's M&A, SaaS and cloud computing, B2B e-commerce, or supply chain issues, we peel back the onion with our guests into the topics that impact your business the most. You know, I've got a new theory though I think I could do is I could just turn my chair around and I could be dancing and then when we start you just see the back of my chair and then you don't have to watch it or deal with it. Or you could just make a grand entrance by whirling the chair around right when we come in.

[00:00:53] Kind of what I was thinking. Yeah, just don't fall off. All right. Well, that's a really good point too. Right. You know, at this age, at this age, I could get hurt, you know, You could get hurt in your sleep so you could certainly get hit in your chair. That's right. That's what I was going to say is we were chatting about this with one of our good customers at dinner last month and that was his joke and he's like six or eight years younger than I am and he was saying that he can get hurt in his sleep now and I agree. So, well, that's nice.

[00:01:22] We started the day off with the there we go. Will says keep on dancing. Bob says happy Valentine's Day. Tom, I knew you and Bob were good friends, but that's taking another level. Hey, we just share the same birthday. So that's right. I forgot about that. Okay. Yeah. Keep on dancing. So therefore you need to do it. I, I'll have to get the check in the mail, the will to, to support the dancing effort. I appreciate him doing that. So anyways, how are you? We had a week of travel, man.

[00:01:51] We were bouncing around. Yeah. Sorry. It's good to be back. It is. I was talking to my wife this morning about that and I said, you know, this was one of those weeks that the private aircraft makes a whole lot of sense. It's a, I can, I can see it when you're pumping into smaller towns. Let me know when you have that set up, I'll be happy to join you. Well, I'm thinking I might struggle to get that expense by you. Yeah.

[00:02:18] Uh, but you know, small, we were, uh, Jackson, Mississippi, Meridian, Mississippi, Birmingham, Alabama. I flew home through Charlotte and got stuck and you flew home through Denver, right? Yes. Yes. So it was a planes, trains and automobiles. Good week, but good to be back. I was seeing some great folks. So why don't we kind of get ready to roll? We'll get started and kind of dive in on our day today. I'm Kevin Brown.

[00:02:42] And this is my lifelong friend and business partner and co-host of our podcast that we do here every week around the horn and wholesale distribution. Tom and I get together each week and next week. And the next few weeks, we have some great guests coming with us. And we chat about the news of the week, uh, and how it impacts wholesale distribution and manufacturing. We talk about things like the economy and supply chain. We talk about mergers and acquisitions, uh, sales and marketing, AI technology, human resources.

[00:03:11] Uh, we get some news each week about, uh, things happening with, uh, uh, acquisitions and announcements and mergers and whatever it might be out there. We try and pull all that data together and talk about how that impacts wholesale distribution. We do that in two basic formats. We do it, uh, here on our live show, which is Friday mornings, uh, at nine o'clock Pacific. Tom and I are both in Southern California. And, uh, we do that here each week at nine Pacific on LinkedIn live YouTube live and Facebook live.

[00:03:39] If, uh, you're tuning in live, you'll also see that we have a newsletter that's, uh, up next to it. If you're listening to the podcast on Apple or Spotify or any of your other popular podcast formats, which you won't see is that newsletter. And that newsletter is called around the horn and wholesale distribution and manufacturing. Uh, if you get that, if you're one of the 10,000 plus people that receive that each week, then, uh, you'll know what we're talking about there. If you don't get the newsletter and you would like to a few simple ways to do it.

[00:04:08] If you're, uh, active on LinkedIn, just go, uh, on LinkedIn and search around the horn podcast, uh, or around the horn podcast newsletter. And either one of those will get you right there. Uh, and you can sign up for the newsletter, which you'll get through LinkedIn. If you'd like to get it directly to your, uh, your mailbox from us, simple, uh, opportunity. There is hello at lead smart tech.com. Send an email there to hello at lead smart tech.com. We'll get that out to you right away.

[00:04:34] And then the final way to do that is at the around the horn pod.com website, www dot around the horn pod.com website. And we will get that to you along with a 10,000 plus people that get it globally. I think this week, Tom, just on LinkedIn, I saw people from three or four countries. We're going to be here. Um, and we usually have five to seven different countries that are represented on the show.

[00:04:59] So we, I described what we do, but the important part that we share with you before we jump into the news of the day and get your comments and thoughts from those that are with us on LinkedIn live or YouTube live or Facebook live is we couldn't do this show. If we didn't have the backing and the sponsorship of the company that Tom and I work for that company is called lead smart technologies. Lead smart is, has developed a AI enabled customer intelligence and CRM solution.

[00:05:26] And what we do with that is we allow companies to gain broader and deeper insights into their customers, their team and their business than they've ever had before. We take siloed data from around the company that you might have in your ERP, your marketing automation, uh, data lakes or data warehouses that you might have your e-commerce data.

[00:05:48] We bring all that together in one single platform and we use, uh, what we call smart CRM and AI tools to identify what's important in your business. So we see a full customer journey, a full view of what's going on in your business versus the siloed data that companies have. So we do that in a way where we try and uncover opportunities to grow your business. So if that's something you're considering or thinking about reach out to us, we'd love to have a conversation with you, even if it's just about some best practices, we're happy to have that conversation.

[00:06:16] So, uh, if you're with us on the live show, share some thoughts with us today, but Tom, why don't we kind of dive in and chat about the news? Let's do it. Um, maybe we should start with economy and supply chain. Why don't we do that? Since that's the first thing on the screen here. And we do that each week and it's also the first section of the newsletter.

[00:06:35] So we're back to kind of what we've been, we're talking about all of last year and late in 2023 is kind of this simmering, um, no spine, uh, to go one way or another economy, I guess, is the way. I I'd look at it as in the first pass. Yeah. I mean, it's changed a little bit, ticked up a little bit, um, both on the producer price index and the consumer price index.

[00:07:04] Actually the bond market seemed to go in the opposite direction of that, which to me tells me that it was a relief, so to speak, that things aren't higher maybe than what they had thought. Yeah. So I just think a couple of things popped out of this, nothing earth shattering. One was, you know, now they're not talking, I guess the, the odds makers, so to speak, are now saying no rate cuts until September at the earliest, which is still a long way off.

[00:07:32] Um, and yeah, everything's just kind of hanging around that 3% area, at least related to, to the core inflation. And it's not, doesn't seem to be moving one way or much or the other. Well, and what's interesting about that too, that I was thinking is that I don't, I haven't looked this week, but last week mortgage rates ticked down. Right.

[00:07:54] Right. And so, and you know, it's been, where are we at? Three months since we've had, uh, a rate cut or near approaching three months since the last rate cut. So it's, it's interesting, you know, um, I saw something earlier in the week as well. And the two articles we have here from CNBC, just as a reminder, need to call these out all the time.

[00:08:15] Is this what first was producer prices, uh, report points to softer fed inflation measure than feared and the economy and consumer prices rise a half a percent in January higher than expected. So, you know, these are just two factors that the fed considers through all of this, um, and not necessarily the highest, right. With them looking at inflation rates and then looking at the job market and so forth.

[00:08:39] But I, I, I guess we're coming into, and I guess I'm the only guy talking about this and I'm far from an economist, but I shouldn't say only one. You just don't hear about it very often, but I just am continuing to go back to the idea. Wondering is, are we using, or is the fed using all the right metrics based upon, you know, you, you, you've shared a lot. In fact, a lot of what I've learned about, you know, automated trading in the stock market and so forth is I've, I've learned from, from you in discussions.

[00:09:09] And, um, I think that the factors that we use, whether it's, is, is 2% the right number to, to try and target still. And then how do we get to figuring out the factors to go with that? I just wonder if there's maybe some, some alternative thoughts that could be done and used because the traditional things that the fed is looking at. The market doesn't seem to care about it. Bonds do that stock market does the opposite of things.

[00:09:36] So often the bond market does the opposite of what you might expect when we see these results. And now we've kind of even seen mortgage rates that there's, there's, unless I'm missing some ways, I certainly could be. There's no significant reason that I can think of that. The, um, mortgage interest rates would have ticked down last week. Oh, it would be for what I just said. Can't hear you, Tom. How about now?

[00:10:03] Um, I, the, the, the mortgage rates to me would have followed the bond market, right? I believe the bond market dropped or interest rates dropped on the 10 year note. And I believe the two year note, I believe because it wasn't as bad as maybe people expected. I think there's a lot of expectation that inflation is going to ramp up significantly. It's sort of staying flat or kind of bouncing around along those things.

[00:10:29] So, you know, I think, oh, they said kind of a sigh of release, the bond market dropped and then mortgage relates, which are then tied to other related things. So, um, I don't see much change. There's nothing that I see that's going to change this all that much over the next few months. We'll probably still tick around that three, three percent area. Yeah. Well, they're going to need to do something. I think what's going to be interesting. Well, I'm going to, before I make a comment, I'm going to ask you a question.

[00:10:56] You know, one of these articles talked about, and I heard somebody else talking about this the other day is related to, uh, next, uh, next interest rate drop. You had mentioned, uh, which one of these articles, uh, discussed that as well about pushing it as far out as September. So there's got to be at least four fed meetings in between there. Um, what are your thoughts on the next, the next drop? Um, I think it's probably Q4, Q3, Q4. Yeah.

[00:11:27] I wouldn't, there's no incentive for them to do it. There's no, why would they do it? There's just no, you know, no incentive. I mean, Trump wants them to do it. I know there's some rhetoric there, but I just don't think it's going to happen until late Q3, Q4. September, yeah. I mean, again, something a lot of, there's a lot of water under that bridge between here and there as well. So. All right.

[00:11:49] So I've got, I've got, uh, uh, a taco enchilada combo plate, uh, that says that we see one before September. Okay. All right. You in on that? Yeah, I'm in on that. Yeah. Okay. Well, I figure, you know, until I get my steak. Anybody else want to get in on that? We can. Well, Will says he wants you to fix your microphone. Yeah. Well, um, I wish I knew exactly what that was, but that's a different conversation. All right.

[00:12:18] The, um, all right. So, so I'm saying pre, we see another cut before September and, uh, and any takers on that? We see a, we see an increase. I don't think we'll see an increase now. I don't need, I don't either, but there was rumbling about that earlier in the week. I don't think I'll see an increase. I will have Bob's comment here real quick before we go move on is, you know, they, they are constantly saying basically they're adjusting right a month or two after its releases.

[00:12:45] And it's kind of a roller coaster up and down and adjustment and back and forth. And it's very hard to plan and put anything in place. Cause it's like, you don't really know if this is accurate data or not. So you almost just have to look at it at a broad level and say, okay, from a trend perspective, where are we sitting? But to try and micro plan against it, I'm not sure I agree with Bob. It's, it's, it's hard to do. Well, I think that's a really good point. I appreciate that from Bob and in your comments there as well.

[00:13:13] I think, you know, in doing what we do here on the show, right. Is, is, uh, peeling back the onion, so to speak is what they say in the, the, uh, podcast. If you're listening on Spotify or, or, um, Apple or whatever platform it might be, but, uh, how does this impact wholesale distribution? Right. Right. And in manufacturing, here we are, we've got tariffs that we're paying attention to and scrambling about. We've got a lack of surety or understanding and what's going to go on with, uh, interest

[00:13:43] rates and so forth. Interest rates are still high. If I want to go open three new branches this year or multiple branches or bring some money in for some additional inventory. I don't have anything to really base that on other than, you know, what I learned from reading the news and listening to around the horn. You know what I mean? It's it, there's no, there's been no other than maybe you can put some thoughts and ideas around what you believe this administration has planned.

[00:14:10] Um, is great, but you don't have anything that you can take to the bank to help you grow your business in this setting. So it leaves manufacturers and wholesale distributors kind of in that limbo that they've been in for 18 to 24 months. Yeah. So what did we'll say there? I saw you smiling. Well, he's kind of, he's kind of roll with me. I think what we should do here is kind of an under over, right? So I'm saying September or farther you're saying before September.

[00:14:39] So, um, I'm going to take it that will is in for the over, like he's, he's betting on my side of it, September and over, but yeah, we can maybe see, we can get a, we can kind of get a group consensus on under over for September. So you do whatever you want. I'm just going to ask Will how going on your team worked for him last time. He said it didn't work out well, but he also is a man to know that things come out in the wash over time. Right. Very good. Um, you know, this is, this is a good point to, you know, Will made another good point.

[00:15:09] And, you know, all kidding aside here, he said that companies that are cash rich will view this as an opportunity. Right. I think that's true, but I don't think it matters how much money you have. You know, I mean, the, the great comparison to that, right. Is the trillions of dollars that are on the sidelines still, you know, they call it dry powder, so to speak with private equity group and venture capital groups that don't like to deploy that with, uh, see Paul's with you on this one too. So. All right.

[00:15:37] Cause they know it was an anomaly somehow that I got kind of caught up in some political stuff last time. There was a lot of anomalies there. Now it's. There's a whole lot more political pressure on Powell right now than there was last time. No, I don't think so. Okay. You, you think, you think that Biden's administration had more pressure on him than Trump is going to put on him? I think there was some pressure. Yeah. Going into the elections. Yeah. That could be. Um, all right. Well, we'll have to see. I mean, I got, I'm the, I'm the odd guy out here.

[00:16:05] So I got Will and Paul on my side so far. So two smart guys. That's, that's some good, that's a good, good team. But you know, I, I think that with Paul here on this is with, you know, love to hear his thoughts on that running a large distribution company to, to, um, well, he just did, right. How much will the tariff uncertainty drive supply chain disruption forward buying, et cetera. And I, and I think, you know, to Will's point earlier about companies sitting on cash, that doesn't mean that you're sleeping well at night as a senior executive, right?

[00:16:34] You might have the cash to do the things that you want to do, but you know, yeah, if you can do, if, is it the right use of cash to deploy that, to buy some real estate and put a new building up or, you know, put inventory into a new, into a new leased building or whatever it is probably is if your cash, you know, got sitting on a lot of cash. But the other side of that is what could you be doing with that money in, in, in other, in other areas. Right. So I think it's a tough time. Right.

[00:17:02] And then the tariff uncertainty, I was actually talking to a family friend last night, uh, and said church, a Bible study. And, and, uh, was talking to this woman and she's in works with a commodity that's a commodity broker, but they do almost exclusively steel from South Korea, you know, and we were talking a little bit about this week. And she said, you know, come Monday when we had, you know, steel tariffs popping up with,

[00:17:28] uh, from the new administration, uh, she said, you know, everybody in their business was in a turmoil. And she said by at the end of the day, Thursday, everybody is now seeing where the opportunities are coming and how this should play out for them. They have their strategies in place. And, but first, first Monday, Tuesday, their hair was on fire. So first of all, you have to apply the 72 hour rule, right? No matter what you hear, you have to give us 72 hours just to take a deep breath and see how it plays out.

[00:17:57] But I think that ties into the next article here. Companies to double down on resilience is trade complexities rise. Mm-hmm. I haven't heard anything this morning, so I could be way out of date already. But the last I heard as of yesterday, right, the tariff process was now focusing predominantly on reciprocity from basically saying, hey, we'll just raise tariffs to be basically equivalent with what other countries are charging us for tariffs. Fair playing field, right?

[00:18:26] Yeah. Which I think is an interesting strategy. We'll see if this plays out because a lot of the countries, if we raise tariffs on them, it's potentially going to have a larger impact on them than it is on us, but we're already paying that. Yeah. Are they going to come to the table and go, oh, hold on a minute. Let's talk about this whole thing here. Well, I mean, look, we're at a place now where we have to recognize that this administration

[00:18:52] is saying, the way I'm going to get the things that I want to get done, which are believing and being important to the country, is I'm going to do it through tariffs. Okay? So we're, you know, basically a month in or, you know, on all of this. And we've seen fast action on these things. And the first ones, I mean, my take on this and looking backwards is where we're at right

[00:19:16] now is through the gauntlet down with Canada and Mexico, which ties to, with them, to get them to come in line to securing the borders, reducing, which in that case reduces, you know, with Mexico permanently putting 10,000 soldiers at the border, right? That reduces the illegal immigrant component of people coming in from Mexico or Canada.

[00:19:41] And it should slow dramatically the fentanyl crisis, which is killing people in this country every day. So that first phase of it, second phase of it was putting the hammer down on China to get some things done with China, including fentanyl and other tariffs and so forth. That one's going to be negotiated over time. And now the rest of it is just, you know, what we haven't seen play out is the rationale

[00:20:06] and the reasoning behind the EU and the other country tariffs based upon, we know what the balancing act to your point that you brought up, Tom, which is spot on, right? Is, okay, let's just get a balanced playing field. My assumption would be there's more behind that that's yet to come that we're going to see what the ask is on those other than just balancing a playing field. Yeah. Yeah. And it'll be, and this, you know, comes back to our inflation discussion.

[00:20:33] If in fact there is a negotiation that drops tariffs across the board on some of these other countries, then that could be a catalyst to reduce inflation over the next, over the next few months as well. Yeah. Yeah. So a lot of, a lot of moving parts here. So there's, let me just kind of hit a couple of the statistics that came out of this. And the one thing I've got to continue around myself to do is our podcast audience listening

[00:21:00] is far greater than our live audience. And so this article is from dcvelocity.com. It's called Companies Doubling Down on Resiliency. Good article. It says respondents to this survey, this is a 600 professionals from wholesale businesses across seven countries and retail and CPG or consumer packaged goods talking about the volatility supply chain.

[00:21:29] It says the respondents are grappling with unpredictable consumer demand, escalating trade tensions and unreliable supplier networks. More than half, 52% said demand volatility is their biggest challenge, forcing them to rethink inventory strategies in real time as shifting spending habits disrupt supply chains. In addition, 47% of businesses pointed to global trade disruptions and rising tariffs as

[00:21:54] growing threat with tariff volatility fueling concerns over higher costs and sourcing bottlenecks. 43% said they struggle with lack of real-time data and visibility, making it harder to adapt to sudden shifts in demand, labor shortages and transportation delays. I think that data issue is something we're going to talk about later today. But those first two, and I think the volatility to Paul's comment earlier, volatility in the article said, Paul said uncertainty. I completely agree with that about what's really going to come out of this.

[00:22:23] And I think part of the issue is going to be that we haven't really talked about. I don't think we see much of it. And I love anybody else's comments on this. I think what we're going to see related to tariffs is, from the volatility standpoint, as much as pricing, it's going to be supply. And in getting, you know, that there might be a squeeze on amounts of products, even though there's tariffs on them.

[00:22:48] I would think right now, if I'm, you know, an executive, any type of manufacturing and distribution company, probably thinking through the supply side of the tariffs, we can adjust, right? There's probably, and again, this is one guy's opinion, but I've been around this business for a long time, is I can probably do a better job of explaining the pricing issues to my end user customer than I can my lack of ability to get them something.

[00:23:17] So if I can't, if I can't, yeah, if I can't get it, I have to answer some questions. It's probably harder to explain how that's related to tariffs than I do a price increase because, you know, if you, if you've got it. You can justify the price increase. It's hard to justify the lack of availability in some cases.

[00:23:37] You know, if I'm a, you know, an office products distributor all the way through to a HVAC or electrical distributor, my customers are seeing the same news that I am about the tariffs and the cost. And if I'm a smart business person about what I'm consuming is, or my, you know, what my company's bringing in the door, I am probably expecting increases myself as well. So what does that mean?

[00:24:02] That's, that's easier discussion to say, I've got a, you know, a 12 or 14% or whatever the number plays out to be price increase versus I just can't get it to you. Because at the end of the day, if I need a hot water heater or some, some cabling or connectors for finishing a job, I'm far more willing to pay more for something that I can access versus something I, I can't access, which means I can't complete a job and I can't build my customer. So it makes sense. Good step. All right.

[00:24:32] So kind of jumping ahead to manufacturing and distribution, a couple of very differing articles here. Let's hit the one there, Tom, briefly before, or the second one on from, this was from Vistage about the tangling with tariffs in 2025 CEOs sharing their strategies. I thought that was kind of a good one to kind of consider with it as well. It's a good article about Vistage, which is the, the coaching and networking group for, for executives.

[00:25:02] They did a large survey as well for in February, along with the wall street journal, they partnered on it. And they said that 53 percentage of the, 53% of the executives they talked to expect negative business impacts from tariffs and trade policies. And so anyways, I don't know if you had any specific thoughts on that, but they had a good Q&A about that. Well, I think it, excuse me, aligns sort of what we were just talking about.

[00:25:29] It was talking about, well, how do you handle this, right? Yes. With your customers, how do you position this? And so they had kind of a Q&A in here, like what's the best way to communicate price increases to customers? Or what was another one? How do I plan when the impact and extent of tariffs in 2025 is uncertain and so forth? So, you know, how should you handle negotiations with customers? Yeah. These are, these are great points.

[00:25:57] The first one was, you know, when it talks about best way to communicate price increases is arming them with the right information, right? They just quoted this one gentleman, you know, he talked about, you know, backed his reasoning with the news and data from reputable publications. The other one was be forthcoming about it, right? Some people will try and hide about that. And then I thought one of the ones that caught me was the big thing that they talked about as well here.

[00:26:27] The, was not to take advantage of the situation, right? And, and, and it's share with people the plan. And, you know, what we see in most instances with specific in the retail world is once prices go up, they're never coming back down to where they were. So if, if you have a strategy that says, Hey, you know what, we're going to lower prices again, when these things happen, have that communication. And then it talked to about raising those prices gradually, if there was any way possible. So I thought this was a good article.

[00:26:57] Yeah, no, I agree. And this was one of these that, that I don't know how you feel or our listeners feel about this, but, you know, for me, I need to read articles or get data. That would oftentimes just seem simplistic or I might go, well, yeah, duh. As a reminder is like, well, you know what? Of course I'm doing those three, but here's the two other that I could do better at. So this is good. This again is from vistage.com.

[00:27:25] And also, I don't know if you remember Steve Levy when we had him on, was it last week or two weeks ago? I can't remember where he was talking about maybe leveling out prices, right? So you may have some tariffs on some items, not in the other, the other item. I mean, there's a lot of ways to think about it, but I think this is a good way to look at some planning strategies. That's cool. Good. Well, I just got a text message, which is pretty cool. Friday morning at 9.29 a.m. Pacific.

[00:27:52] And Paul Kennedy, the president and CEO of DSG, large electrical and broadening out in their supply solutions that they have with some plumbing and HVAC and even some industrial stuff. Great team behind Paul. Paul's a great friend of the show. Been with us a few times. He's going to be on, it looks like, in May. We're going to get him with us. So, again, and I'm always appreciative of him being on with us.

[00:28:19] And, you know, Paul is the president of the National Association of Electrical Dealers as well and board member of affiliated distributors. And so a very humble person and great guy to be around, but phenomenal insights. So we're glad to have him on my side with my bet for this year. Yeah. I know you should be nervous. Right. You should be nervous.

[00:28:45] It's just I'm thinking about those implications, how I just built up what a smart guy is and he's on the other side of the coin with me on this one. So where does that leave me? That's right. Okay. All right. I need some people on my side. You know, back to that whole, the whole thing about interest rates we started with. I just, I think there's going to be a lot of pressure on Powell. And I'm not, I'm not confident Powell's going to be in his job, you know, in the middle of the year.

[00:29:08] So that, that's where, you know, I think if you're, if you're, if you're looking at this whole thing that we were discussing earlier about interest rates solely from a market standpoint or an economic standpoint and the indicators probably wouldn't, I probably wouldn't take the position I've taken. I'm taking my position based upon a president that's putting the squeeze on him and what may come out of that. Okay. Well, so. We'll see. It gives us something to talk about the rest of the year.

[00:29:38] That's right. Very good. All right. Want to move on to e-commerce and marketing? Let's do it. What's our first one there from our friends at Digital Commerce 360? B2B buyers demand omni-channel experiences. I think we've talked about that a few times. We have, but they're bringing out new and updated data, which is, which is really good. And, and, uh, and, but there is a surprising change to what we've been talking about. That's the, that's the kicker in this. That's new and different information there.

[00:30:08] So where is the change? Is I bring up the chart? The very first part that it talks about, as you bring that up, it talks about B2B to buyers demand omni-channel experience, but omni-channel options buyers want most. Uh, they've, um, trying to remember where it was in this. There, there's part of this article that talks about not just the omni-channel, but post pandemic. Uh, they're wanting to have an in-store or in-branch experience improving as well.

[00:30:35] So that was a component of this that kind of surprised me as well. It says here, and a surprising reversal of pandemic-induced trends. Face-to-face sales are making a comeback. Growing number of buyers are choosing physical stores new data shows. So again, this is from our friend Mark Broham. We published this four days ago, uh, from a new research tool that they did or with, uh, conducted by Hakoto, uh, and Greenwood Consulting. And so, uh, Hakoto is a B2B e-commerce association.

[00:31:05] This was 300 buyers. I think what this just plays out though, too, is what we've talked about as long as we've been doing this show is, and these are words of, uh, we're going to talk a little bit later about an article that, uh, Ian Heller from Distribution Strategy Group wrote. Is that, uh, by the way, you know, I'm going to chat about our friend, friend Ian for just a second to, to say how smart he is. Not just from the article we're going to talk about later than he wrote and the stuff that he does.

[00:31:34] And he's a good friend of the show and a good friend of a lot of the people here. But I find myself constantly talking about DSG and saying Dakota Supply Group. And I think myself constantly, I, I'm starting to say Dakota Supply Group or now DSG. And I say Distribution Strategy Group. So, uh, so Dakota Supply Group DSG has been around exponentially longer than Distribution Strategy Group with Ian and Jonathan.

[00:32:03] Uh, so using that same, that those same acronyms there was pretty bright, uh, to associate themselves with, uh, with Dakota Supply Group folks and all the innovative stuff that they do. Because I get stuck back and forth. But, you know, Ian commented in, uh, I think it was on our 100th episode, uh, that we did, uh, middle of last year. And he said, you know, if you're not meeting the buyer where the buyer is, then you're missing out. Right. Because the buyer is going to decide where he wants to be.

[00:32:32] So this, we have, you know, up a chart here. Thanks for putting that up, Tom. And the things that are important to them, right, are really 126 years, Paul says. So, um, good, good for Ian and Jonathan to tag along that, that long journey. But I think at the end of the day, right, the buyers are telling us what they want and we need to follow that. You want to hit on some of those? Well, I mean, these are the things that they want to have incorporated right into their experience.

[00:32:58] And so it's agreed upon price, which is, you know, your agreement with your, so you're not having to figure out your pricing based on your contractual agreements. Obviously shipping and delivery information, payment terms. And these are things that I would think would be pretty obvious that we would want to have for any sort of personalized experience. I'm sorry, I just wanted to go back on this. Was this the article where it talked about the, um, going back to more, you know, buyer.

[00:33:26] You're going to see that if you go, if you scroll to the next chart, they're back to 56% talking about face-to-face sales. And it makes me think that, you know, about, I want to actually going to send this article to Mike Marks with Indian River Consulting. Because Mike references, I think it's Gartner Research that was talking about for the last X number of years that, and I'm sure the Gartner Research is, is much deeper with a much larger sample size than what this particular survey says.

[00:33:55] But, uh, the, uh, I think Gartner was at 70 some percent said they don't want to see salespeople of B2B buyers, right? Well, now we just see in this newer research talking about 56%. Now, 74% want to have a robust e-commerce site, right? This talks about, again, this is a digital commerce 360 article. And, uh, that they're saying that they want to be, to be marketplace is important to them. But 56% saying face-to-face sales.

[00:34:23] Only 16% are concerned about a mobile app, which is interesting because there's, you know, been a big, big push from a lot of companies, including some companies we're partnered with, uh, about the mobile app experience. And I think that's probably a lot more important to the distributor in some interest instances, uh, than to the customer. But then they're talking about that 9% only have a big concern about telesales.

[00:34:49] So I think that face-to-face sales number is the key and, and all roads now lead to omni-channel, right? I mean, that's just, if you're not focusing on omni-channel, that's where the struggle is. Sure. And omni-channel is analog and digital is what we're seeing here. It's great. It's a great way to put it. I think that's, that's the key point. And, um, it's interesting. This, I want to think more about this face-to-face sales increase.

[00:35:14] Um, I, I believe that will be true whether it's face-to-face or live, right? However you want to, however you want to call it. I do think there will be a appreciation for that more, but the value of it is going to have to be really high. Right. So it's not like, Hey, I just want to have more face-to-face fails so I can get more donuts. It's got to be those face-to-face interactions have got to be very valuable and, and really paying for the buck, if you will.

[00:35:43] Well, I think if you go deeper on all of these, let's not move off of this yet, but I think if you go deeper on these things, what you would really find with this is somebody saying my, my e-commerce site and, and having my digital options with my supplier. Is, uh, what I want for my ongoing and consistent commodity buys or the categories that I'm really understanding and sophisticated.

[00:36:09] But if we move out and we start talking about cutting tools or highly technical safety items or technical products that need to be used on a job site or in a manufacturing plant, that's where this, I, and my assumption is, and, and I would be willing to bet.

[00:36:25] Maybe the number is not 56% like we see here, but my expectation would be if you took the sample size out to 30,000 companies versus 300, you're still going to see a high level of people that are probably making some adjustments to having been trying to go all digital. And realizing we're missing something when we're not having that special product sales guy come in again, to your point, right?

[00:36:53] I don't need to have tacos on Tuesday with, you know, with Ralph. I need to be able to talk to him about why are, why am I getting a, you know, a 10 day shorter life or a two hour shorter life on a cutting tool. Right. Right. Or, or it seems like there's less copper in this particular piece of wire than we got before because we're having this job site issue. That's tough to solve on an e-commerce site, right? Whether with a chat bot or whatever it might be.

[00:37:21] And I also agree with, with Bob here is that it's difficult. You're not, you're fulfilling demand, right? On your e-commerce site or your marketplace, you're not creating demand. Whereas face to face has the opportunity to divide, create demand or drive demand gen versus just fulfilling what it is there as well from the standpoint of the customer as well. Right. So, I mean, stop and think about that, right? For a moment, if I'm, if I'm an electrical contractor, that's got to get this four story medical office building wired.

[00:37:51] And my next payment is due on X day. And I have to reach these goals, right? Ordering something on Amazon business that we're going to return tomorrow. If it's the wrong one that we use in our personal life, that doesn't work. Right. Or if I've got a technical piece of safety equipment and I need to, I've got a confined space entry issue on a, in a plant.

[00:38:15] Uh, I need someone to come and probably bring me the gas detection piece of equipment or whatever it might be that day and make sure I'm using it correctly. And, and, and, and an Amazon or a marketplace of any sort doesn't really play out in that setting because it's not something like I'm able to just go say, well, I'll return it and order another one. Yep. So good. Let's roll here. Huh? Uh, five questions. Every CMO needs to ask if we're in our marketing segment here.

[00:38:43] I thought that was kind of a, an interesting point. We're jumping, uh, from e-commerce into marketing. And, uh, why don't I just hit these real quick? Cause we got a lot to cover still. Is that all right? Sure. Yeah. So this article is from sales and marketing.com five market, uh, five questions. Every chief marketing officer needs to ask and answer in 2025. Tom, I'm going to rapid fire these, but interrupt me and stop me. If you want to add to them.

[00:39:08] They talk about securing additional investment, uh, with economic uncertainties in the business. We've just been talking about that throughout the whole show today, understanding where my budget's at for the year and what are the pressures on those budgets that might hit me? Do I understand those? Do my executive team understand what I want to do and, uh, make sure we don't have any barriers that we're unaware of? Uh, can I rely on my marketing data? We're going to talk a little bit more today about data, data, data, data, which is something

[00:39:37] we chat about in our day-to-day business consistently. Uh, every marketing organization has inherent challenges to their data in every business. We've got to get our head around that. Uh, it says data underpins everything in today's high performing marketing function from segmentation, audience targeting, delivering a relevant customer experience and reporting. And then it talks again about AI while AI sits with the developer team and is getting closer to delivering real value to marketers.

[00:40:06] And we can not even start to harness the potential if we don't have good data. Three was, should I be looking to AI to drive marketing results? And where do I start? It says AI is no longer on the economy, uh, on the horizon. It's here. Start, start by starting small. Uh, four is, do I have the right team and operating model in place to deliver? So what does my team need to look like? Which is a big issue. We see this a lot in the discussions that we have with companies, right?

[00:40:31] Is it, we might have a traditional marketing person who's supported by some people that might've been in customer service a few months ago. Now we need to start looking at the teams that go with that as well. Right. And then lastly, if growth is our goal, what's our strategy, right? And, uh, assumptions aren't a strategy. So I thought that was, that was a good one again from sales and marketing, uh, management magazine. Yeah. I'll just, I'll just hit on one of these real quick, which was the marketing data.

[00:41:00] Number two, one of the biggest things I see, and we ended up talking to a lot of marketers sort of indirectly. And when we're working on, you know, some of the lead smart stuff is a lot of attention is put on what I call kind of vanity metrics that aren't really relevant metrics to really. And even email opens are like looking at open rates is on the way of the dono. Yeah. Well, it's not, it's not valid data, right?

[00:41:27] Because there's so many different, you know, you can look at it, I guess, relative from one email to the other to see if you're getting more, but to think you're getting whatever the number is, is not really correct. And there's just other sort of, I'll just call them old school marketing vanity metrics that a lot of people are still using and they're not really telling the story. So I think we have an opportunity here as marketers to really be able to look at data

[00:41:54] much more sophisticated and come up with a whole new set of, um, you know, benchmarks and a whole new set of analytics and KPIs that we're working against versus the traditional, how many opened it, how many clicked and all that stuff, which is predominantly bogus information in this day and age. Yep. Yep. I had somebody just ask me that recently about the email newsletter we put out and talking about open rates. And, and I just, I kind of laugh about that because, you know, that was, what, what would you say that?

[00:42:23] So, um, that's so, uh, 2019, I guess I would say, or 2021. Yeah. A while ago. Yep. So something to move on from, Hey, let's, let's jump into there's a, the next article is, uh, from martech.com and it's, uh, how chat GPT search reshapes the B2B buyers group. So Tom, I'm going to, I'm going to throw a couple of overview comments out about this.

[00:42:49] And I'm going to ask you to, as our technology guy here, uh, to take, kind of take the lead on that moving forward, but, uh, basically historically in chat GPT with a large language model and correct these, if I get this, this wrong, but we were for a long time, it was, you know, April of 2023 was the model was up to date with the internet or majority of it. And that's kind of moved ahead. But in October, I think it was, they launched the chat GPT search. Correct.

[00:43:19] Correct. I think. Oh, yes. Yeah. So that takes us kind of to the next level of being able to do search in general. And now we're starting to see people and I'll just use my example. And then I'll ask you to kind of throw some thoughts into this is I move back and forth now between Google, which gives me some, uh, Google Gemini data with my searches.

[00:43:40] I use perplexity probably, probably go back and forth now between perplexity and, and Google 50, 50, I'll just say 40, 40. And then 20% of the time I'll ask chat GPT search. Those will probably start balancing out, but good tools. The opportunity now for us is to use multiple different tools, but this is talking about chat GPT search reshaping buyers journey.

[00:44:08] Wanted to get your thoughts as a, the AI whiz, uh, on this show. Well, I, by the way, when probably a month ago now changed my default search engine to chat GPT. So when I put up a search in there, it automatically doesn't go to Google anymore. It goes to chat GPT. I wanted to test that and see what my, how I liked it. Okay. I give it a B plus at the moment.

[00:44:33] There are certain situations where I liked getting some just Google results, right? If you put in the name of a restaurant, you just want the hours or the address or whatever. But aside from that, the quality of the search results and the depth of the search results and the, basically the value, I guess, the business value of them is significantly higher. I'm finding with using AI search versus traditional search.

[00:45:02] Cause remember traditional search is just providing you links to websites that then you have to go for it out and go through. The other thing I really like is the citations that come with it. So you can see very clearly where the data is coming from to back up with the data that you're being provided. So it's your, your risk of sort of hallucinations or bad information is, is low because it's using the data that it's searching against. So let me ask you a question related to that.

[00:45:30] So would it be maybe reasonable to say at least today, and we're not suggesting people to search the way we do it or not have their own method, but would it be reasonable to maybe think that if say, if, if I'm wanting to find out the closest, you know, where dreamland barbecue in Birmingham is and what are the reviews, Google search, right?

[00:45:54] Because I'm, I'm yet to have in whether it's perplexity or it's chat GPT search or whatever it might be is I'm not going to get reviews and so forth. Oh, you will. And yeah, I think that's, you kind of brought up two points, right? If I want to know where the location is and what their hours are, maybe I would just prefer a Google type of thing.

[00:46:17] But if I really want to know any data about that, then, um, I would like that, that, um, chat GPT search, cause it will give me the reviews, a summary of the reviews. Okay. It'll look at multiple sites and summarize those reviews. Which is what perplexity is doing. That's Bob's question here. How to perplexity and chat GPT stack up against each other. I haven't used chat GPT search enough. I think I'm going to go do what you described, change my, my, um, my, uh, main search to go

[00:46:46] to that for a little bit, see how that plays out. I actually just downloaded the widget to this morning. Yeah. But let's take it back to what they're talking about in this article, right? Is the buyer journey. Right. So historically, a lot of times search quote unquote has been used. Well, at a couple of stages, it's using the discovery stage, right? Where I'm trying to find something. Hey, I need to find something. And I'm, so it's higher up in the funnel.

[00:47:13] And then sometimes it's been used a little bit lower in the funnel, maybe to find some reviews or other things like that. What this is basically saying is that which, and whether it's perplexity, perplexity or chat GPT, we'll just call it AI search, right? Can AI search can help you really help facilitate the buyer journey more efficiently? Well, obviously if somebody is trying to navigate through the buyer journey, us as vendors and

[00:47:42] sellers and companies, we want to be part of that journey. Right. So I'm really starting to think through, right? Traditional SEO, traditional ways you optimize the website and keywords and all that kind of stuff for traditional SEO doesn't really make any sense anymore with this, right? Well, you potentially need three. I mean, if just what we've talked about today, you potentially need three strategies. It might be four or five, right?

[00:48:11] You need a Google search strategy. You need a perplexity strategy. And you might be need chat GPT strategy. And you may be. I think perplexity, all the AI searches probably are very similar. Okay. If you have, if you have a strategy, I don't know that you need one for chat GPT and perplexity. Although I don't, I couldn't swear to that, but it doesn't logically seem correct. But I do think your AI search strategy is very different than your Google SEO search strategy.

[00:48:37] And it opens the door for you to provide more thought leadership, right? Into what you're doing versus just product information or company information along the way. So this is interesting. It's the latter part of this article. Again, this is articles from martech.org, how chat GPT search reshapes the B2B buyer. And the latter part of the article, it says lessons for B2B marketers.

[00:49:02] It says audit your product's visibility in AI powered tools to start by assessing how your brand appears in AI driven search results. So I think the best way to start is just go start looking at what does my brand look like when I search in those settings? Which, you know, I hate to say this, we haven't done that even with it at our company, Elite Smart Technologies, right? Great, great case for that. Lily, I hope you're listening. We can get that project started this week. Being present to showcase value is critical.

[00:49:29] Focus on creating high quality educational content that supports the buyer journey at every level. Says your content, making sure that your content is available on platforms prioritized by AI tools such as G2, Trust Radius, and Reddit as well, which is interesting. I hadn't thought about the Reddit part of it. And they talked about, and I wasn't aware of this, HubSpot has an AI search grader, which is an interesting tool.

[00:49:54] And then it says you use AI powered intent data to engage in market, in market buyers. So that's an interesting thing. It says AI driven intent data providers can help identify buyers actively researching solutions beyond your website. So that'd be an interesting tool for people to be checking into as well. So anyway, obviously happening faster than it's like, you know, one of these days you wake up and the world's a different place. I think that's one of these situations here. Right.

[00:50:24] That's very good. Good. Well, let's jump ahead into our next segment, technology and cybersecurity and AI. The first article that I kind of alluded to that this morning earlier, it's from the distribution strategy group. If you're not following the folks there, we get a lot of news from them each week. Their founders, Jonathan Byn and Ian Heller have both been on the show with us, Ian, multiple times. Ian wrote just a good article, why AI holds more potential for distributors than for retailers.

[00:50:54] And I was appreciative of some of the clarity he brought to some of these points. Did you have any thinking or immediate thoughts on it? One of the things that hit me on this is his, I think what he called complex relationships is that, you know, in the distribution world, right? There's a lot of complex relationships, especially in larger companies and different buyers and so forth.

[00:51:21] And it's an area that we haven't explored even as much as I believe that we will need to in the future is how do you use all of those contact information that you have and relationships you have to start kind of understanding better the relationships that exist and how to best navigate those relationships. So, you know, that was one that just jumped out, but there's a few in there that he brought up, but that was one that jumped out.

[00:51:48] He, as I was texting with Ian yesterday about this, let him know that we were featuring this today and all those points are great. And I said, well, do you have anything, you know, you want to add? Because he oftentimes is wrapped up in getting prepared for one of their shows or one of their webinars when we're on live here. And he said, I said, do you have any specific insights you wanted to share? And he said, feel free to say that I'm sick and tired of hearing the distribution industry

[00:52:15] called technologically backwards without any context. Yes, distributors have adopted technology more slowly, but a major reason is because the business model is so complicated, not because the distribution leaders don't understand the value. You know, he said, he said also a lot of technology companies haven't understood the real needs of distributors. He said, just look at CRMs for years. Technology companies built CRMs designed for technology companies.

[00:52:41] They were at managing one-time big deals like an ERP sale or something like that, not ongoing relationships with a steady stream of transactions. And he said, insert LeadSmart Technologies pitch here. Okay. Isn't that great? That's good. I just literally, my head was turned because if you're watching live, because I was reading it. You should reply back. I'd like Ian to write a whole article on that subject about the idea that backwards, but

[00:53:09] really take that from the complexity perspective versus the apathy perspective. I think that would be a really good article. Well, and I do think one of the things that most companies haven't done, and I think Ian's comment here about technology companies haven't understood the complexity of the business. And I think it's why we're working every day to make the LeadSmart Channel Cloud products stand out in wholesale distribution and manufacturing.

[00:53:36] Both is what we bring to the table is we're founded by distribution experts, right? I'll pat myself on the shoulder for just a second. I've spent, I mean, I got started in distribution in 1989. So you were out, you know, as a chief technology officer of a technology company. What was it? 48 hours ago. Right about now, 48 hours ago, you were in a 100,000 square foot warehouse of a pipe

[00:54:06] valve and fitting distributor, and you're chief technology of a customer intelligence and CRM customer. How many people out there that provide SaaS software solutions can say that their chief technology officer knows the difference between, you know, a butterfly valve and a ball valve or whatever it might be? You know, some of the stuff you were learning. I can see the difference between that. What's that? You're overselling if you think I know the difference between those things. Well, you saw them. I saw them, yes. Yes, yes.

[00:54:36] Right. And you stood in a room with, you know, some, a CEO, an executive vice president of sales and another VP of e-commerce and mapping their customer journey and their adoption needs and so forth with the technology. And that's different. So there's, you know, in this, I'm going to sit on a soapbox for a minute, right? I tell people all the time, I said, you know, our, if you met our average customer where

[00:55:03] that's a, you know, a VP of sales or marketing or a CEO or even the senior technology person in a wholesale distribution company, they might be in jeans and boots and a denim shirt driving a pickup. But don't mean they're, don't think for one second they're not extremely successful and extremely intelligent. Sometimes they haven't gotten the message across that they have an opportunity to work with companies.

[00:55:29] And there's companies across the board in ERP and marketing automation and rebate management and lots of other tools where there are people that understand their business. And bringing and embracing companies that understand their business in is going to give them a different experience and a different outcome than they've historically had from buying off the shelf software. You know, I think what we should do was, I'm going to go off the rails a little bit here, but I kind of like. That's where we're going to rename the show you said, right?

[00:55:59] Right off the rails. So, you know, we were meeting with some pipe vomit fic and we were doing some AI stuff with them and this last week and I made a comment that, you know, by using some of this AI capability, I could probably go out and do a sales call. Right. I think that would be an interesting challenge if, and I'm sure one of them might even take me up on it, is have me study one of, you know, using some of the AI stuff we're doing,

[00:56:25] have me study and utilize that AI for a day or two and see if I could actually make a sales call with them and see how. I don't know. Maybe they're one of their friendly guys if I completely screw it up. Yeah. But it would be an interesting, I think an interesting case study, right? To see, because I don't come from the industry, so I don't have the background, to see how we could use some of the AI capabilities and the tools that we've been working with

[00:56:54] to see how well that really can work, right? And where the gap is. So here we are right now. I'm going to just throw that out. I'm just going to grab a couple of names off the top of my head about regular listeners that are with us on the show is Patrick Kenney from Kenny Pipe in Tennessee. Can I send Tom down and put him in a truck with one of your guys?

[00:57:18] Joe Solheide with DSG, VP of Sales and Marketing there, or Paul who's with us, or Mark Rancier from Southern Pipe or Monty Mann. Bob thinks it's not a really good idea. So what I'm thinking is, let's get you out. I'm thinking Joe Solheide, if you're listening today, my friend. It's a challenge. It's a challenge, right? It's a challenge.

[00:57:44] What I'd like to do is send you to one of the DSG branches in North Dakota later this month and have you get in a truck with one of their guys and maybe go to a competitor's customer rather than one of theirs to get started. That's fine. I'll just do a conversion. That's fine. That may be my first call. And the affiliated distributors folks will be really happy that you're helping them with their conversion program. So whatever.

[00:58:11] I sound like I'm joking here, but you know what is interesting about that is, and we talked about it later that day after you had made that comment over lunch, or I think it was on our drive. And it wasn't that I meant it was discounting what you were saying. I think it's going to be harder than you think. But I think what the reality of it is, a guy like you, 30 plus years as a computer scientist starting and running software companies, writing. So Joe responded. He's with us.

[00:58:41] He says, it has to be when it's cold out, which was exactly my point. I'm sending Tom to North Dakota. It's fine. So, but thanks for that, Joe. So, but I think the point that you're trying to make is, and let's bring this back around, even though we've had some lapses. One, you're a professional business person. You don't let yourself get in situations where you're going to get yourself in a pickle.

[00:59:09] So, and then using the AI tools you're describing is, you know, you were showing some people, literally some things we're working on right now, where you took a picture of a job site and use an AI tool within Lead Smart Channel Cloud to evaluate what the needs were. And it basically came back with a quote for what was needed on that job, right? Which allowed you to be able to say, hey, I could go out. That's what I would do. What's that? That's what I would do, right? Yeah. That's if they took you to, you know, the end user.

[00:59:37] But all you're missing is the years of context of what really happens out there and understanding what the actual physical product is. But that brings that back full circle to something that you've talked about a number of times in the past is, and we've talked about just a little bit on the show here, but the reality of it is, is where we're going to be very soon. And we talk a lot about agents and we're going to continue to talk about agents, AI agents is, and I'm working on someone in our company right now,

[01:00:07] is that training people coming in is going to be just completely different in the near, very near future than historically. So we're at a place right now where we could, you know, and I kind of think of the old, you know, Fastenal model of starting the warehouse, move to the counter, and move to be the branch manager. That model that happens fast within some companies could happen much faster because you could take a person that worked at Starbucks last week,

[01:00:36] use AI tools and some search capabilities that they could have when they get in a pickle, but train them using AI and do the testing using AI and then get them up and running so much faster than ever. And if they started at a branch, you know, or driving a delivery truck, they could move into sales exponentially faster than they've ever done before at a huge cost savings. And we need to move on. But the reason I even said that is just going back to this article, right? He says,

[01:01:05] distributions complexity has made it challenging to transform. Yet that same complexity makes it an ideal fit for AI solutions. And that's my point, right? There is a lot of complexity, but could, could, this would be the interesting challenge is could me or somebody who, you know, could leverage that in literally a day or two go out and at least add some value into a situation and not just be an idiot? Or what did I use? I said, at least I wouldn't be a moron,

[01:01:34] I think is what the, and then there was some, not, not in that, in that setting, you would not be a moron. Not in that setting. Yes, we should, we should definitely. All right. All right. So I'm ready. I'm ready. Just let me know. I'll put on my coat and I'll, I'll head out or we don't have a whole lot of other takers here. So, yeah. All right. Well, I think when, when, when some of the, when some of the others hear their names or others that are listening, if,

[01:02:01] if I didn't mention your name and you'd like Tom to come spend an afternoon with, with one of your guys on the road. Very good. That's, that's the case there. Good. So let's jump ahead. The lack of data strategy slows AI adoption for 25% of firms from IT pro. Any thoughts on, on your end on that one? We just talked so consistently about data, data, data. So, quick thoughts. Say, I'm just going to say there's a couple of things, right?

[01:02:30] So what they're saying here is the data fuels, the AI and the data strategy is missing in a lot of companies, which is true. The question comes up is what is a data strategy? And for a lot of companies I hear, well, it's cleaning the data, right? Our data is not clean. It's not accurate. It's the data hygiene element of it. And, and that's true to an extent, although we're finding that data can be cleaned up a lot of times, a lot faster than maybe people think.

[01:02:58] I think what's really missing in what a lot of effort, I know I put in a lot of effort into this, is kind of what I call the data taxonomy, which is how do you organize the data? And what is the data that's the most relevant and how is it organized and pieced together to get the maximum results, right? So you're not just throwing the kitchen sink in and crossing your finger and hoping that, and this is true both on the unstructured data and the structured data side. So quickly, Tom, before you jump past that,

[01:03:27] what let's just reinforce what the difference between those two. Well, structured data is what you get out of a database or what you'd have on a spreadsheet, right? Things with columns and rows of structured data and unstructured data is something you get in a PDF document and read about, right? So obviously both types of data can feed in and should feed into your AI strategy, but there is a, again, and you've probably seen this in some of the work you've been doing, you try and throw the kitchen sink in to AI without really giving it some structure,

[01:03:58] some context, some organization, your results are going to be probably mediocre at best. But if you organize the data properly, you know how data relates to each other. Again, the taxonomy, as I'm talking about, you take your time to understand that, put it together, the results you're going to get are going to be much, much better. Right. It almost seems like when you're, when you're adding, you know, so structure data, think about coming out of ERP systems,

[01:04:26] CSV file that comes out of your e-commerce system, those types of things. And then you want to use that data, but then you want that model to then start also evaluating some word docs or a PDF as an example. I did it recently with, with our marketing group and trying to build some agents related to, to using some marketing data. And it seemed to kind of burp a little bit along the way until we gave it instructions about how do you,

[01:04:54] how to look at those PDFs differently. And literally in this particular use case was asking chat GPT, where are you struggling here? And it literally brought back some responses of that, of what it needed in addition. Context, right. I think it was one of the things you said earlier. Yep. Very good. That's good. I think that part of that is it's great, great time to be alive, you know, interesting time, if nothing else, right? Okay. Gotcha. All right.

[01:05:24] Let's, let's kind of jump into our sales and MNA segment here. Lots going on in this, the, and again, I missed this earlier. If you're listening on the podcast and don't, don't see us live here. What we have up on the screen is the newsletter that we put out every week. It's called goes out early Friday morning. It's called around the horn and wholesale distribution and manufacturing. It goes out to 10,000 plus people each week. And you can get that if you'd like to receive it.

[01:05:54] We have sections on, on the economy and supply chain and e-commerce and technology and marketing. And we're in our sales and mergers and acquisition segment. Now where there's usually three to five articles each week in these sections that came from the news of the week. We get together on this podcast and talk about those. If you'd like to get it, the fastest, simplest way is on LinkedIn. If you're an active LinkedIn user is just either go to the lead smart technologies page there, or just search around the horn podcast and newsletter,

[01:06:23] and it'll pop up and you can subscribe, or you can send an email to us at hello at leadsmart tech.com. We can do it that way as well. Or certainly we have a website for the podcast, which is around the horn pod.com. So lots of options to get that here. We're talking about, about QXO, the new publicly traded PE group. That is when I say new middle of last year, I think is, is this is Brad Jacobs.

[01:06:50] He was one of the founders of United Rentals and lots of other distribution related companies. And they put this monster, I think they're over a billion dollars of capital on the sidelines right now, looking to deploy. The first big deal that they've come after is trying to buy Beacon, which is a building material and roofing supply company. And two quick articles there that Beacon has asked to let their shareholders decide on it.

[01:07:17] And now they're even offering to throw out their suggestion of a new slate of directors in this. So this is, it's kind of an interesting thought and I'm far from any experience with Wall Street or M&A at this level. But this is acrimonious. And I'm not so sure if you want to be acrimonious in your first venture into the market. Maybe that's the throwing the gauntlet down about what they want to do, but it's an interesting thought. Well, they say, I don't know a lot about this, so I'm not,

[01:07:46] but it's in the articles and stuff that we've even had on the show here for the last few months. They just seem aggressive. Yeah. I think they're taking a very aggressive stance and maybe that's just their, their culture and their structure. Well, and, and, you know, I, I saw the, um, I, I think I mentioned this, I think it was last week. It was early last, the last week was the CEO of Beacon was on a Jim Cramer's show on CNBC. And they had a great interview and they talked a lot about this. And he said, look, we're, you know,

[01:08:15] we're not saying no to this. We're just saying not at that, not at that number. Right. And so now you've got somebody who, you know, and this is, this is pretty different when you've got, you know, a PE group of this magnitude, that's got operators that come from the distribution world in it, founders and operators. This is very different than, you know, XYZ capital coming in and wanting to buy it, buy an operation. So it's going to be interesting to watch. So we'll keep publishing these on an ongoing basis,

[01:08:45] but, uh, this one is certainly not, uh, not going the friendly route. Okay. So, all right. Um, why don't we hit, uh, on that, uh, five ways B2B sales leaders can win with tech and AI. We don't need to spend a lot of time on that, but, um, um, I have this, this is from McKenzie, a good article. It's just McKenzie.com. They have a segment on their website called capabilities and it's called a growth and marketing and sales. Uh,

[01:09:14] and this just talks about a time of evolving competition and customer demands. B2B sales leaders can consider a range of technologies, innovations help fuel success. So they talk about AI powered opportunity identification. Uh, we talk constantly about this personalization using, AI to effectively tailor their offerings and pitches in response to increasingly special, uh, excuse me, specialized, uh, customer pain points, value-based AI enabled pricing,

[01:09:44] and digitally enabled seller task automation, and digitally driven talent improvement. So this one, I like, we talked about this a little bit earlier. Sales organizations are leveraging tech to more effectively assess seller performance in line with their goals, while also improving performance by implementing capability building programs through AI, which I thought was interesting. I, I, I, I love, I like this article a lot and I really like the McKinsey articles when we have them.

[01:10:14] I think they're really excellent. I want to hit though on number one, right? Cause this is what we spent the last week doing. Yep. AI powered opportunity identification. And it says AI helps companies identify high potential opportunities and, and better avoid low return efforts. There are four possible use cases that AI can help identifying fast growing niches adjacent to the business, to the business, which we went through this week, probably better engagement and conversion through segmentation.

[01:10:42] We did a little of that surface opportunities to acquire and retain customers and to, including cross-selling and looking for white space. We spent a lot of time on that week and managing churn and retention, right? There is just a whole lot of things here. And I realized that maybe this isn't something that a person, you know, and a person on the street, the guy on the street is the salesperson is dealing with, but at the management level, these are important things.

[01:11:09] And these were things that we were spending a lot of time with this last week is how do we use some of this opportunity identification and opportunity optimization to drive organic growth within the business? And then how does that then carry down to the person on the street that would actually be able to use this data to, to be more useful or to get more useful information on what they're doing? Well, I think, you know, this, this ties in well to the followup article we have,

[01:11:38] which is from sales and marketing management, talk about three seismic shifts impacting and improving sales training. And, and I think where we're at this, this place is, and, and I, I'm going to make this comment based upon every day, all day talking to wholesale distributors and manufacturers is, you know, historically, you know, salespeople have specifically salespeople, whether it's inside or out has been, you know, we, we did one of two things. We've ever,

[01:12:05] we either found a guy that really was just phenomenal at communication and at sales that knew a little bit about our product categories. And we figured we could train them up on the products because they were just such great salespeople. But far and above the norm has been, let's hire the guy that comes from a competitor, which is probably the most common is let's get that guy to bring his book of business over here, regardless of how,

[01:12:35] what bad habits he might have. He's going to bring his book of business over and he goes about life day to day, like he did at the other company. He doesn't embrace your core values of your company. He doesn't do anything. He's just at a new place because he hasn't, and he's not necessarily interested in fitting in with the culture. Well, now we've got these types of opportunities with, you know, onboarding and, and, and individualized and prescriptive onboarding is what the next article talks about being able to do this.

[01:13:04] And so how we work with our salespeople and in preparing them and how we're working on our company in general, we have such an opportunity ahead of us now to do things we've never been able to do in the past. And it's going to change how we're hiring. Right. Yep. And what our expectations are. And to your point earlier, Tom, right now is we've never been in a better place because of some of the abilities that we have with AI is to get, um, the, um,

[01:13:34] the specific training that someone needs individually, as well as the targeted information that we want them to have. Right. And, and I think the biggest place that this ties in really well, if you want to think about a use case is we tend to hire people. And I'll just use a simple use case, right? If I'm a large electrical distributor that does, um, uh,

[01:14:00] a little bit of industrial and maybe a little bit of HVAC and some things like that as well. And those are growing areas in my company. If I'm going out and hiring the guy, that's an industrial guy that's been around, maybe he's a former Granger guys, lack of a better example, right? He probably, when I run, assuming you have the right CRM, like lead smart channel cloud, right? When I look at your revenue expander tool or some of our, our AI tools that identifies white space challenges of things we're not selling, right?

[01:14:30] We're in this place now where we can quickly grab that guy. That's got, you know, tools and industrial experience and get him up to speed on electrical. And not only we find out the deficiencies because we have the right technology that says he's not selling these things. And it's AI enabled in a way that it's telling me as a sales leader, my guys aren't doing this. I don't have to go look for it myself in the ERP and try and figure it out. Right. My technology is telling me, Hey, this group of people,

[01:15:00] this branch, this individual is not selling a lot of this, but they're not selling hardly anything of this gear, my training now. And now I've got some of these AI tools that we're talking about that can really ramp up. And this is incumbent upon manufacturers to get their arms around this to, to support their distributors is now I can take that guy because I knew him when I worked at Granger myself as he's just, he's just a customer all-star and he's really good and he knows industrial,

[01:15:28] but I need him to know HVAC and low voltage electrical as well. Now I got the right guy. I can see what's going on in his territory. And I know that I'm deficient there. And now we can tailor the training that he needs for that. We talk a lot about personalization, right? Right. So, and I think that I know we need to move on, but there's two parts of the equation. You have to do the training part of it and you have to do the enablement part of it.

[01:15:55] When you can personalize the training and you can personalize the enablement based again, their job, their territory, their role, their responsibility. Yep. And then you have the enablement tools, right? To back it up, which is, you know, enablement is something that, I mean, training and enablement continues all the time, but you, you know, then you have the tools to help facilitate that. And continuously approve it. Yes. You can do exactly what you just said, which is why I'm going to be able to go out and do a sales call after, you know,

[01:16:24] a day or two of training in North Dakota. So. Telling you, I'm calling Joe, as soon as we're done here, I'm getting this set up. So. Very good. Tom, let's, let's kind of jump ahead a little bit into where I get lot, got lost there for a second. Uh, yeah. People in leadership. And we can kind of move through this pretty quick, but I did want to, to target a few things. There's,

[01:16:52] if you're company executive, it doesn't matter. It doesn't matter if you're a managing any level of people, whether it's salespeople or it's warehouse people, or you're a CEO of a company and have to look broad. We try and bring this new segment. Uh, I don't say new, we're six months into it now, if not longer effect, a lot longer than that. We're almost a year into it now, uh, of people in leadership that we have in the newsletter. We try and bring some good articles across from this. And in one of the places, a lot of the articles come from is, uh,

[01:17:19] HR dive.com might be worth thinking about signing up for their newsletter, but they had, um, a good, a good article that I, I kind of appreciate it as a, as a business leader myself as well, is that they're talking about the articles. Uh, again, it's called from HR dive.com. It's called too little, too late talent leaders, uh, say HR must be invited to the table sooner as organizational decisions are being done. Right. And, and the,

[01:17:46] the crux of this is don't call HR after you've made all the decisions. Right. And then say, okay, we need to go take this, you know, chopped salad that you've come up with and go dissect all of this, of what it means from an HR standpoint. So that, that was kind of a nice thing. There's some good points in that some bullet points about it. Uh, they talk about business and operational strategy discussions. They're just brought into too late. And, uh, this was a large survey, a thousand global respondents,

[01:18:16] uh, brought the same type of things up. So I thought that was a good one. Any thoughts before we move on? Nope. Good. Uh, next one was five compensation and benefit trends to buy into in 2025. Again, HR dive, uh, salaries talks about, but salaries remaining steady, uh, employers will finally contend with, will need to contend with salary transparency. Um, that's a, an interesting one. It talks about flexible benefits or the name of the game. Uh,

[01:18:46] part of this is tying back to work from home things as well. And, um, anyways, it just kind of a series of good, good points here. Uh, even talks about GLP one drug coverage in this, but, um, I think this is a, again, the newsletter that comes out from HR dive is good. Whether you're a person in HR or you're leading a team of any sort. The last article in that segment though, was, uh, that, uh, it was from some research done by,

[01:19:15] there's an assessment of 4 million users submitted, uh, AI prompts. And it was done by Anthropic. Anthropic is who's behind Claude. The, uh, I'll just say, lack of a better example, Tom, a chat GPD competitor. And it says here that there's no evidence of jobs being entirely automated by AI. Their recent analysis ships. You want to jump on that real quick? Well, they're just saying that, you know, the AI has been, um, historically used more for augmentation. Right.

[01:19:44] First automation, which, which makes sense given what we have and what's available to us right now. Right. It's, we don't have a, frankly, a lot of opportunity for automation just yet at the, a lot of jobs, but I do agree that augmentation is going to be, even when you're using automation, I think it's going to be odd to augment something you were doing as a job so that you can have more time and attention to put on more valuable things. So. Very good. Okay. Good stuff. Well, again,

[01:20:14] that's, uh, that's there, our, um, people in leadership segment. And, uh, again, if you don't get the newsletter, please let us know. We're happy to get that out to you. Tom, it's kind of time for us to wrap up today. We have our second look segment that we do each week. Um, and we talk about, uh, import cargo levels expected to remain high ahead of rising tariffs. So that's a good one. I did, I did miss something though, at the beginning and we put an article in and I think he was with us today. So before we wrap up,

[01:20:43] it was back in our manufacturing distribution segment. We jumped and we skipped an article because it was, we jumped back in a stick with tariffs, but, um, we're not starting over. I'm just going to recap this real quickly because we do need to jump, but, uh, industrial distribution magazine, uh, published an article, um, on the fifth, it was two visionaries, one tip co and tip co is a, uh, uh, Maryland based distributor and they have co CEOs, uh,

[01:21:13] in their organization. And it's, it's really kind of a great, uh, a great discussion about how they do that. They have a portion of their companies owned by Platte river equity. And, uh, I just, I think they do some really kind of cool stuff within that organization. This article talks about how they're kind of moving their business ahead with, uh, technology, the technology that they've embraced Rob lines. I think Rob was actually even going to be with us today, but Rob's just a super guy.

[01:21:41] I've had a chance to meet a handful of his team and then some messaging online, uh, through LinkedIn with Rob, but I just did want to kind of address this. They've been on an acquisition, uh, goal this, uh, this year and last year, excuse me, with bringing some companies in both in partnership and, and acquisition, but a cool article about some of what they're doing. But I think it's interesting. The, the big kind of takeaway for me is talking about co CEOs. So I thought that was pretty cool. So we need to wrap up, um,

[01:22:08] couple of good articles is in closing though, um, is the final article we have is from B2B marketing. I realized that this wasn't even on the screen. I'm scrolling. Oh, that's okay. I don't think we need to worry about that. That, that article I talked about before. Robin is, is co, uh, co CEO. Good article there. I didn't want to miss that today. Cause I think he was even with us as well. And didn't know we were publishing that. The last thing of the day we're not going to talk about. I'm just going to encourage people to take a look is B2B marketing.com.

[01:22:36] It talks about is trust B2B's biggest issue in 2025. And it's got, uh, six bullet points. There are about leadership's responsibility with trust, trust across an organization that's needed before you, um, can expect it within your customer. So that's the goal of that one. I, I really liked, uh, the idea behind that. I'm going to read it myself again, uh, about trust within organization. So that's about it, my friend. Um, let's call it a day. We'll,

[01:23:06] uh, as in closing, we'll recap. We're here every week. And what somebody, as we say is on an airplane, uh, on a planned vacation or in the hospital. We appreciate the great comments we had today. We had, uh, some newer commenters with us as well. We appreciate that. Again, we do this every Friday. I'm Kevin Brown. This is Tom Burton. We work for lead smart technologies. Lead smart has developed an AI enabled CRM and customer intelligence platform that helps, uh, wholesale distributors and manufacturers gain access.

[01:23:35] Access into information and insights into their business that they've never seen before that can help them drive, uh, and accelerate growth within their companies. We would love to talk to you if that is an interest to you of accelerating growth with your company and understanding where your silo data is across the business. That's what we do. We help companies around the world do that every day. Uh, we couldn't have this show without the team behind us and they cost money, uh, to have a producer and an editor and a marketing person involved with this.

[01:24:05] And so lead smart sponsors this show. So we hope you join us again next week. We've got David Gordon, uh, one of the great thought leaders in the electrical and HVAC industry coming with us. And then a surprise guest the following week. And, uh, we're just going to keep doing this each week. If you like what you hear, hit the like, the subscribe, forward the email to your friends. And, uh, we'll get this out to even more people. So Tom, appreciate you every day. Uh, it was great being with you earlier in the week. We'll wish everybody a great weekend. Be kind, be safe,

[01:24:35] and do good things. Have a good weekend. We hope you enjoyed today's episode and our guests. Each week, we try our best to dig into the topics that are impacting your business. So please reach out to us and let us know how you think we can make the show better or topics you'd like for us to tackle or talk about more often. And even guests you'd like to see join us.

[01:24:59] We're looking forward to bringing you next week's session and hope that until then you stay safe, stay focused, and do great things. If you haven't already, please subscribe to the podcast and leave a review to help others in wholesale distribution get access to the conversation. And finally, please check out our sponsor Lead Smart Technologies and their manufacturing and wholesale distribution industry CRM, customer intelligence, and channel collaboration platform.

[01:25:28] That's Lead Smart Technologies at leadsmarttech.com.