by Art Waskey | May 5, 2022 | Art of Sales Weekly
A sales manager recently brought a problem to my attention. One of his customers had called and asked why he hadn’t been by to see him. The frustrated sales manager explained that the prospect had plenty of quotes from him but never purchased. He believed making further calls was a waste of his time. He asked for my advice. My response — look for the reason why your customer is unresponsive.
Build a relationship
I suggested he call the prospect and make an appointment to see him. During the meeting, he should allow 20 minutes of continued focused attention to build a relationship. Let the customer talk 80% of the time. Then ask the prospect why he hadn’t followed up on previous quotes.
Don’t assume
Too often we make assumptions about our clients. Instead of guessing, ask your customers about their actions, or lack thereof. Don’t assume that when an order isn’t placed, it’s because a final decision has been made not to purchase.
As a sales manager, I once instructed a rep to ask his customer why he hadn’t made the move to our company. The customer smiled, laughed, and said that he didn’t really have a good reason. This response indicates the relationship between the rep and the customer was weak. If the rep had invested time in building a relationship with the prospect a sale would have been more likely.
In another instance I learned a prospect was stalling on a sales decision because he did not have the time to spend with his purchasing department. When the sales rep offered to help with that transition, the business was secured.
Be proactive
Too often our assumptions about why customers hesitate are negative. Such thoughts are counterproductive and a drag on your daily activity. Successful business people are positive thinkers. Don’t let “head trash” prevent you from closing new business. Be proactive. Build relationships. Don’t be afraid to ask your unresponsive customers why they are not acting on your proposals. Be creative in leading them toward the deal.
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by Art Waskey | Apr 26, 2022 | Art of Sales Weekly, Featured
Price increase alert
The Producer Price Index (PPI) climbed 10% in 12 months through February 2022. In line with economists’ expectations, the Consumer Price Index (CPI) shot up 7.9% during that same period. Further, this represents the most significant year-on-year CPI increase since January 1982. In fact, with the CPI north of 6% for five straight months, distributors, like everyone else, are feeling the pinch on profit margins. Much less, to offset higher costs, many distributors and their suppliers announced multiple price increases in 2021. Thus, as inflation continues, these price adjustments need to continue in 2022. Charging for value-added services is an excellent way to accomplish this more palatable to your customers.
Value-added services strategy
Second, I find that most distributors believe their value-added services are essential to their competitive advantage. Yet most do not adequately monetize these services. You need to develop a reasonable strategy for charging for value-added services. Examine the services you provide, especially those customers won’t receive from digital online channels. Determine which of those services are revenue producers. Put a price on your value-added services and incentivize your sales team to pitch these services to customers.
Vet your services list
A typical list of value-added services includes repairs, technical support, customer training, engineering/design, on and off-hours delivery, loaner/rental equipment, installation, assembly, and stocking.
You can prioritize these services by gaining from these three attributes:
- How important is this service to customers?
- Are customers willing to pay for this service?
- How well do we perform (or could we perform) at delivering this service versus our competitors?
Price your services
A survey was conducted in 2020 by the Distribution Strategy Group, which found that two-thirds of respondents do not pay commissions for the sale of services. Moreover, with many distributors bundling value-added services into product prices, there is no way to pay commissions on services or incentivize their sales. Consider taking value-added services out of the bundle and charging for them. Your bottom line revenues will grow faster than you think.
Furthermore, if you are not already doing so, charge all non-contract customers for added-value services. Use this to offer reduced charges for signing new contracts or renewing existing contracts.
Offset rising costs
Finally, implement or raise your charges for value-added services to offset the revenue loss. For example, these services can differentiate you from your competitors, particularly those in digital channels. To maximize the value of added benefits you provide, it is essential to price them accordingly. Charging for value-added services is an excellent way to offset inflationary pressures in a manner that is more palatable to your customers.
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by Art Waskey | Apr 19, 2022 | Art of Sales Weekly
Digitalization has created significant changes in the space between salespeople and their clients. Sales process relationships were altered quickly during the pandemic. Thus, leaving little time for sales teams to adjust their strategies. Furthermore, to help you make the appropriate adjustments to your sales process, let’s examine the sales process relationships of today.
Critical sales processes
Outside sales – Enterprise Resource Planning (ERP) and eCommerce have automated many functions of the outside sales team. For example, salespeople once personally handled order taking, stock checking, chasing backorders, and pricing errors. Now, these tasks can all be done electronically. Today’s sales manager needs to adjust a way of creating relationships with customers. They can, share insights from suppliers, technology integrators, consultants, and other information providers.
Be sure to involve the principal decision-makers of your client’s operations, administration, finance, marketing, and sales departments. Today’s digital transformation (DX) and artificial intelligence (AI) provide important personalization. Herein, the act of tailoring an experience or communication based on information a company has learned about an individual. Also, use the data generated from current and previous interactions to create proposals specific to your customers’ needs. Doing so is an essential adjustment toward success.
Total sales process relationship
Lastly, distributors currently face various challenges, including a labor shortage. According to a survey of 50 industrial distributors, 63% are looking to add staff in 2022.
To offset the struggle of hiring, the distributor of this decade has the opportunity of changing the landscape by integrating simple sales process relationships.
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by Art Waskey | Apr 12, 2022 | Art of Sales Weekly, Featured
A mentor’s objective is to identify your needs and expectations and offer creative solutions that move your business forward. In today’s distribution business there are a growing number of experienced seniors. If you believe your team would benefit from a seasoned coach, consider enlisting a mentor.
5 Steps to Take
Executive mentors can help guide your business to growth. Here are some steps you can take with a coach.
Step 1: Understand the issues
A mind map should be created to summarize all the current growth issues. The goal of a mind map is to record key ideas and look for connections between them as projects. In many cases, unrecorded projects go unnoticed because they are never brought into focus. A mentor can guide you through the mapping process so that you do not waste precious time and energy.
In “The Seven Habits of Highly Effective People,” Stephen Covey suggests you can start the mapping process by putting first things first — his Habit #3. He recommends listing projects under two categories — Important and Urgent, and, Important but not Urgent.
Step 2: Prioritize the Projects
An experienced mentor can be invaluable for prioritizing and evaluating projects. Each week, they can ask your team to list, in order of urgency, the top five projects that need to be moved forward.
Step 3: Create Next Steps
Each Top 5 Project will likely require many actions. Use a mentor to help you plan each incremental step. Having seen/solved many issues before, your mentor can help you with the chronology of actionable steps.
Step 4: Implement Solutions
A mentor comes with a network of suppliers, equipment, and software providers he has engaged with in the past. Tapping into that network can help a distributor move more efficiently through project steps. For example, a distributor in the gas and welding industry may already have bulk CO2, and now wants to produce dry ice. If your mentor was once a manufacturer of dry ice, he will know several suppliers who can provide the best equipment, installation, and cost. This expedites your start-up.
Step 5: Track Completed Projects
There is no better motivation than visualization of past accomplishments. When a project is completed it should be dated and listed on a mind map. Moreover, I suggest recording them under the corporate divisions: Executive, Operations, Sales, and Administration.
Objectives achieved
Lastly, if you are a successful distributor on the move, but need help, consider enlisting a mentor. Tapping into a trusted source with years of experience, is one of the most effective ways to move a business forward. Mentors help you achieve your objectives efficiently.
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by Art Waskey | Mar 28, 2022 | Art of Sales Weekly, Featured
Successful salespeople are constantly looking for ways to thrive in a marketplace loaded with alternative business channels. They ask, “How do I maintain or regain a sales standard at a time when products are so easy to purchase online? Is it possible to compete with the alternatives?” In other words, the answer is yes – employ digital capabilities.
Changing roles
Previously, I explained in an earlier article, competing against alternative channels starts with a realization that the digital transformation is changing the role of the salesperson. Its role is changing from quarterback to scout. Above all, as the quarterback, a salesperson had a large responsibility to control the flow of ideas, take orders, check stocks, chase backorders, and correct pricing errors. Furthermore, with the arrival of Enterprise Resource Planning (ERP) software, many of these responsibilities are now automated.
Additionally, the outside representative of today and tomorrow must be more of a scout. In other words, the job now requires that you look for ways to add value and draw in new customers. For example, one way to beat out the alternatives is to make sure your website engages customers.
Digital capabilities
In his recent article for Distributors’ Digital Doom Loop, Ian Heller summarizes these capabilities that drives customers to engage digitally:
- Customers get more value from your digital tools than those of your competitors
- Your customers prefer using your digital tools because they are fast and intuitive
- The digital tools you provide make the customer’s job easier
Heller goes on to explain: “Every distributor should conduct its own customer research to develop and prioritize its capabilities. The list of digital capabilities businesses value is exhaustive. Heller suggests you start with these:
- A portal which allows customers to manage their accounts
- Product training
- Uploaded technical drawings for quotes/prototyping
- The ability to schedule a service (i.e., safety audit)
- RFQ Form or Cart
- An equipment rental option
- The ability to schedule a repair
- A product return function
- A managing bin or vending replenishment option
- Access to technical support
- The ability to track deliveries
- Contacts for sales rep
- A customer service Chat option
- The ability to schedule or change a delivery
- A look up for repair parts
- The ability to trigger a blanket PO release
Act now
And lastly, in order to retain or recapture sales of simple standard products and beat the alternatives you need to act now. Be sure your distribution channel and ERP have the digital capabilities that will enable you to compete in today’s market.
by Art Waskey | Mar 21, 2022 | Art of Sales Weekly
Focus on improvement
There is no question that in the last three years a lot has changed for sales professionals. Yet one important thing has not. Customers continue to want consistent service above all else. As a consultant, I stay up-to-date on the latest trends in selling by reading media outlets. As a result, I am always anticipating the next paradigm shifts so that I can adjust my sales strategies accordingly.
In my research, I find that there are some basic sales premises that never change — like providing great service. To keep these basic offerings current, you want to focus on improving your exiting sales model to meet current circumstances.
The service model
In “The On-Purpose Business Person,” Kevin McCarthy reminds us of the importance of having a clear vision of the service model. Here’s how to look at yours.
- Purpose – Clearly define your business. This statement should be short and easy for your organization to repeat at any time. As a consultant, mine is simple: Mentor the next generation. For a distributor, it may be an excellent idea to ensure that we are the preferred supplier of our customers.
- Plan – Your company’s vision, mission, and value should include a plan of action. This should also outline how to execute a key outcome or goal.
- People – You need an inspirational team to engage your plan. You may have employees on your payroll, subcontractors, or a combination of both. Motivate your employees by assembling a team that will get them excited and motivated.
- Process – Make sure your functional disciplines — finance, operations, sales and marketing, etc.— are operating efficiently. In today’s digital world this generally involves the use of an Enterprise Resource Plan (ERP)
- Performance – Finally, McCarthy states, “The prior 4 Ps set up your performance for success or failure. Key Performance Indicators (KPIs) measure the output and productivity against set standards and stated expectations.” You need to determine what you will measure.
The lifeblood of business
No matter how rapidly technology changes the world of sales, serving customers remains the lifeblood of business. To keep customer service first, have a clear purpose, the right team, and efficient processes to ensure success.
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by Art Waskey | Mar 14, 2022 | Art of Sales Weekly, Featured
Artificial Intelligence
Artificial Intelligence (AI) is the wolf at the distributor’s door. It enables alternative channels to directly compete with your offerings.
As an example, I recently needed to replace a pair of faucets as part of a home renovation project. I went to the website of the local supplier recommended by my contractor. When I typed in the stock number on that site, I received a drop down from a national supplier. That company offered a 20% price reduction on the item plus 10-day free delivery and a 10% discount for a first time customer. By merely entering a stock number on a company’s website, its competitive suppliers had access to the request! This kind of access is enabled by AI and the adoption of this technology is moving rapidly.
Be strategic
Distributors need to have a strategic plan to offset the AI challenge. Look for new ways to innovate rather than just relying on the tried and true. For example, in the past, distributors have focused on best practices to remain competitive. While this remains important, in a recent article, Mark Dancer, CEO of Network for Business Innovation, cautions that best practices are not implementable, proven solutions but merely ways of catching up with what others are doing. Similarly, continuous improvement is about getting really, really good at what you already do. Combined, best practices and continual improvement do more to lock existing business models in place than to help companies leap forward with game-changing innovations.
Start with the fundamentals
I am working with a small distributor that is taking its first steps toward digitization. The company is giving all employees mobile computers. Depending on their roles, some may receive barcode scanners, radio frequency identification (RFID readers) and mobile printers. Amanda Honig, Regional Portfolio Manager for Zebra in North America, explains in a recent issue of Industrial Distribution, “This [mobile devices] is the fundamental ‘digital’ toolset in today’s distribution and warehousing environment. They can quickly locate, pick, and pack parts and equipment, report findings of visual quality inspections, and notify stakeholders when things are on the move to the next destination – whether that’s a shelf bin’ packaging line, loading dock, or customer.”
Deploy simple digitization
To deal with the AI wolf at the door, SMBs need to start by deploying simple digitalization of their data and workflow. Focus on core processes such as inventory management, receiving, picking, packaging, and shipping. Train your workers with dependable, mobile computers that improve daily activities. These steps will help you better compete in a world running on AI.
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by Art Waskey | Mar 7, 2022 | Art of Sales Weekly, Featured
Take advantage of your data
Due to a proven track record of delivering products, small and mid-size businesses (SMBs) enjoy working relationships built on trust. In order for SMBs to succeed, they need to know the advantages they have with their customers. Additionally, the digital copies that are stored in most businesses purchase history. computers which store digital copies of their purchase histories. To take advantage of this data, a company must incorporate an Enterprise Resource Plan (ERP).
An Enterprise Resource plan can tie together all of your work processes including customer service (ordering, pricing, and product knowledge); operations (order tracking and warehouse inventory control); administration (order processing and bill paying); sales (prospecting, customer products, history, and purchases); and marketing (website, advertising, merchandising, social media, research, and training).
ERPs are vital to the success of small and medium-sized businesses, so it pays to hire an expert who can consolidate business data at a price that works for you. ERP’s can protect your company as well as unify commerce and enable you to compete head-on in the digital world and drive the business forward.
Key Values
To compete with bigger companies, SMBs need to offer added value. Using an ERP can bring three key benefits to distributors:
- Low TCO (total cost of ownership) — This will enhance the return on investment and the digital initiatives you are putting in place.
- Increased sales and margins — As stated before, ERPs can streamline processes and save time. In addition, this will increase the opportunity for sales representatives to cross-sell and up-sell.
- Increased business process agility — Unified commerce companies can make a store more productive or open a new branch more quickly. It also presents additional channels for customers to interact with the organization.
Drive business forward
By helping customers, distributors can also help themselves. Mark Dancer explains: “Customers need to evolve for the digital age, but like distributors, many customers are uncertain about the future. By developing expertise around how customers will do business and helping them transform, distributors will drive their businesses forward.”
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by Art Waskey | Mar 1, 2022 | Art of Sales Weekly
My past experience includes growing a distributor business from $10M to $65M. My current focus now is on advising small and mid-sized businesses (SMBs). I find that digital transformation can seem daunting to this group. Often, smaller companies feel they stand at a competitive disadvantage to larger distributors, who have more funds to invest in digital investments. To offset the threat of alternative digital sales, I advise Small and Medium-Sized Businesses (SMBs) to lean on your strengths.
Digital transformation
Digital transformation involves the strategic adoption of new technologies in the marketplace. It is used to improve productivity, deliver better customer and employee experiences, manage business risk, and control costs. Furthermore, a myriad of tools, solutions, and processes are used in digital implementation and often require significant investment.
Costs coming down
It’s true —an integrated enterprise resource plan (ERP) can be expensive, but costs are coming down. The pandemic accelerated the development of digitalization. This increased demand for digital tools to drive down the cost of implementation. For instance, take note of how prices dropped as demand increased for flat-screen TVs/monitors, smart phones, and computers.
Start with the fundamentals
While working with a small distributor that is taking its first steps toward digitization. For starters, the company is giving all employees mobile computers. Depending on their roles, some will receive barcode scanners, radio frequency identification readers (RFID readers) as well as mobile printers.
Amanda Honig, Regional Portfolio Manager for Zebra in North America, explains in a recent issue of Industrial Distribution , “This [mobile devices] is the fundamental ‘digital’ toolset in today’s distribution and warehousing environment. They can quickly locate, pick, and pack parts and equipment, report findings of visual quality inspections, and notify stakeholders when things are on the move to the next destination — whether that’s a shelf bin’ packaging line, loading dock, or customer.”
Innovate
To innovate, SMBs should deploy simple digitalization of their data and workflows. Additionally, SMBs should focus on areas such as inventory management, receiving, picking, packaging, and shipping. Finally, train your employees on how to use mobile devices that improve daily activities.
SMBs are agile and have the ability to react quickly to customers’ needs. Use this to your advantage. Rather than worrying that you have fewer tangible digital resources than your larger competitors, lean on your strengths to gain a competitive advantage.
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by Art Waskey | Feb 22, 2022 | Art of Sales Weekly, Featured
I was fortunate to be part of the glory days of an outside distributor sales team. We built strong customer relationships. Using our technical skills, metric reviews, planned vendor calls, and product training, we quarterbacked our sales goals. As a result, we grew sales an average of 8% per year for 30 plus years. Today’s digital landscape, however, has changed the way the game is played. It’s put the outside sales rep into more of a scouting position.
Change in responsibilities
As a result of the pandemic, we have seen a digital transformation in the way we buy and sell. While some smaller markets may still support the old model of selling. Eventually, they too will be affected by digitization.
Technology has changed the advising role and responsibilities of the outside sales rep in many ways. For example, the outside sales rep was once responsible for controlling the flow of ideas, taking orders, checking stocks, chasing backorders, and correcting pricing errors. With the arrival of Automated Enterprise Resource Planning (ERP), many of these responsibilities are no longer part of the job. Furthermore, tied into mobile devices like smartphones, ERP makes sales transactions are faster, more accurate, and more direct. Consequently, this has changed the role of the outside rep to the middle man in multiple sales processes.
From quarterback to scout
In a recent podcast, Larry Davis, CEO of AgoNow, discussed the salesperson’s customer relationship journey in digital times. Davis described the salesperson as a football quarterback, a planner, or an executor of plays between the customer and distributor. Correspondingly, the outside rep of today/tomorrow needs to be a scout. “Their job is to scout out opportunities and look for ways to add value through conversations or walking through the customer’s facilities.”
Create strong partnerships
As customers continue to migrate to digital procurement alternatives, the salesperson must be trained in the role of collaborator. To compete, we must be able to coordinate a customer/distributor partnership. That kind of coordination requires access to talent outside the distributor’s four walls. As Davis suggests, the position of an outside salesperson today is that of a scout. He must be able to organize strong partnerships with suppliers, technology integrators, consultants, and information providers.
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