by Art Waskey | Oct 24, 2022 | Art of Sales Weekly
Electric Vehicles (EVS) are coming. I have two Gen X children who are now working professionals and both drive Chevrolet Bolt EVs. In a recent article, Ford’s CEO, Jim Farley, said the pending electric vehicle price war would drive their sell price down to $25,000. The EV field already has many choices. In highly competitive markets like this what determines success? It usually comes down to added-value differentiators.
The Supercharger
Furthermore, EV front-runner, Tesla, continues to work on its strategic plan that focuses on added value to car owners. For example, Tesla’s Supercharger network is easily one of the company’s smartest ideas. Since it takes 20 to 30 minutes to supercharge, Tesla wants its clients to be entertained while waiting. The company strategically places charging stations at big-box stores near major highway interchanges so customers can walk to a restaurant and shops. In Germany, Tesla recently installed a heated pool at a Supercharger.
With major changes in-car technology and selling methods, the automotive industry must focus on added values to lure customers. Distribution sales are no different. Technology and selling methods have changed for distributors as well. Distributors need to offer added-value propositions to differentiate themselves from alternative virtual channels.
Added Value Propositions
Here are some of the areas to focus on when considering how to supercharge your added-value offerings.
- Customer service – The greatest advantage a distributor has over online verticals is customer contact. Continue to find ways to improve customer service.
- Convenience – Focus on improving store stocking and maintaining a competent staff. Assist your customers in product selection and education. Add free beverages and internet to your stores so clients are more inclined to linger. Costco’s product samples are a good example of how to attract interest in your store.
- Complexity – Find ways to bundle your products or include assembly and training. Some distributors ask their customers to bring their projects to the store so they can be reviewed for more efficient production methods.
- Digital technology – The more digitalization a distributor can deploy in its ERP the better. It enables you to demonstrate speed, accuracy, and an understanding of the customer and their needs.
Best Price Differentiator
Lastly, distributors can take a lesson from the automobile industry. As Tesla continues to demonstrate, in a competitive market added value is the best price differentiator.
by Art Waskey | Oct 17, 2022 | Art of Sales Weekly
A sales manager recently described his travel day with a rep who needed to close more business. They called on six prospective accounts and the manager expected to close on three. When I spoke to the rep, he described the manager as too direct and complained that his tactics made the rep uncomfortable. I thought the sales manager’s actions demonstrated advanced selling skills, however. To gain perspective on the best approach to a sale, let’s look at the psychodynamics of the successful salesperson.
Important characteristics
Here are the characteristics I believe are most important to closing deals.
- Self-confidence – It is critical to walk into a prospective account with the confidence that you are going to close the sale. Believe that your customer needs what you have to offer. Know your product.
- Be engaging – Whether you are talking to the receptionist, an employee you pass in the hallway, or the decision-maker, ask questions and listen. If you can get a person to speak to you for 15 minutes, they will trust you. As Zig Ziglar used to say, “People don’t care how much you know until they know how much you care.” Be engaging —let your prospect know you care.
- Knowledgeable – Have confidence that your product or service is something the customer needs. Don’t share information that isn’t requested. Keep answers brief and always ask another question.
- Trustworthy – Being trustworthy is doing what you say you are going to when promised, and in the manner, you described.
Close the deal
The sales manager described above had the confidence and knowledge to close the deal. He could engage his customer in productive discussions and gain clients’ trust. Use psychodynamics—self-confidence, engagement, knowledge, and trustworthiness —to create long-lasting, strong customer relationships and close those deals!
by Art Waskey | Sep 26, 2022 | Art of Sales Weekly, Featured
How to Measure Success
While VP of Sales, I oversaw a hospital account that was among our leading 10 customers. Their purchases topped the charts. Yet our CFO questioned the account’s profitability when their contract came up every 5 years. Due to the competitive pressures in healthcare, the pricing of the products was not increasing from contract to contract. The volume was tremendous and the product mix carried some of the best gross margins. The question kept coming up about the account’s net profit. How do you measure your high-value customers in today’s diverse marketplace?
Determining Profitability
In the seminal book, “Choose Your Customer”, Jonathan Byrnes and John Wass state: “determining the true profitability of our customers is one of the biggest problems for companies today.” They described the shift from the Age of Mass Markets, where managers had a clear responsibility to look after their unique department, to the Age of Diverse Markets in which managers are responsible for net profit contribution. With today’s robust digital ERP capabilities a company can perform transaction-based profit metrics and analytics across multiple fields.
Byrnes and Wass explain, “Instead of assuming that revenue maximization is the objective of the account management process, leading managers now understand that directly maximizing all-in customer net profitability is the right objective.”
The Net Profit Viewpoint
Additionally, In the Age of Diverse Markets, it is feasible to look at each transaction from a net profit viewpoint. This is accomplished by digitally collecting all cost aspects of each transaction. In the opening hospital illustration, there were exorbitant distribution costs involved in making deliveries to multiple locations. Furthermore, deliveries consumed a driver’s full day on multiple days each week. Additional costs accrued by having to correct persistent administrative and billing issues unique to the account. All costs considered, the hospital account produced negative net profits. It was not a high-value account and was reclassified as a profit drain.
Sales Effectiveness
Lastly, with digitally evaluated transaction-based profit metrics and analytics, companies can move to the ultimate level of sales effectiveness. High-value customers should no longer be appraised on revenues, or gross margins, but on their net profit contribution.
Get more tips and tricks by purchasing The Art of Sales books. Or subscribe to the FREE monthly articles here.
by Art Waskey | Sep 19, 2022 | Art of Sales Weekly, Featured
Get Organized
Twenty years ago, as the VP of Sales for industrial gas and welding supply company, I started writing a monthly column, “The Art of Sales,” for CryoGas International (now Gasworld). The magazine focused on the industrial gas distribution business. My articles were directed at that audience and contained sales tips and stories. Today I am a consultant to that sector, have my own blog and continue to contribute to industry publications. While I still write on sales skills, I have noted that the rapid and critical change in commerce has prompted the need to concentrate more on digital and organizational practices. Many clients are asking, “What should I do with my business now?”
The Digital Transformation
Furthermore, much of my writing relates to how to deal with the marketplace disruption caused by the pandemic. For example, consultants no longer spend their time on planes in order to make face-to-face meetings. Appointments are now virtual. Also, COVID accelerated the digital transformation, and the distribution business, like all others, is feeling the shift.
Advanced ERPs, eCommerce, and virtual product content have radically changed sales responsibilities. Furthermore, Reps have moved from product presentations, quoting, checking inventory, and tracking orders, to added-value consulting and answering questions about products the customer procurement team has already researched online. Also, the distributor faces the added challenge of competing with manufacturers that can sell directly to customers, or through marketplace alternatives.
Business Choices
These facts beg the question – what do I do with my independent distributorship now? I have observed three typical responses:
- Sell out to a conglomerate
- Transfer the business to your employees through stock ownership programs, such as ESOPs
- Hire a qualified consultant to bring your company up to date
Primary Priorities
Regarding option 3, there are qualified senior executives with years of experience who know how to navigate the distributor’s challenges in the digital marketplace. Thus, The most essential primary priorities are to apply organic/systemic organizational skills nimbly and invest in digital proficiency. The most effective means to accomplish this urgent progression is finding people that understand your business – those who have “walked in your shoes.” Henceforth, talent can be developed internally or externally. You probably already have employees who have unidentified digital skills that could be enhancing your business.
In conclusion, what should you do with your business to compete in today’s marketplace? Develop your organizational skills and digital proficiency … and do it now.
Get tips and tricks like the above in The Art of Sales books. Or subscribe to the FREE monthly articles here.
by Art Waskey | Sep 12, 2022 | Art of Sales Weekly, Featured
A lot to Consider
As an independent regional distributor, you need to take a close look at where to invest your digital dollars. In a recent MDM webcast, Alex Moazed and Nick Johnson talk about distributors entering the digital domain. They discuss the recent proliferation of industrial-specific verticals: Berkshire e-Supply (industrial products), Bluon (HVAC), Parts Town (OEM foodservice equipment), Volition (industrial parts), and ODP Corp.’s Varis platform (office products). Moazed and Johnson emphasize that digital B2B marketplaces aren’t for everyone. Before getting involved, consider your distributor differentiation.
A Small Slice of the Pie
Moazed and Johnson point out, that while the level of investment in digital marketplaces from distributors is undoubtedly accelerated in recent years, it’s still coming from just a very small slice of the pie. In the atmospheric gases industry, a few forward-thinking companies got into marketplace verticals early. Most have found the margins slim. Furthermore, digital sales appear to be an alternative to buying from the company’s mortar and brick stores and are regional in nature.
Focus on Analytics
The historical strength of the independent distributor is in its local resources and relationship to its customer base. Rather than investing in buying platforms, focus on improving your technical skills, facilities, and personnel. Additionally, the best investment you can make is in digitizing and growing your analytics. As Jonathan Byrnes and John Wass suggest in their book, “Choose Your Customer”, take a close look at your high-profit customers through transaction-based profit metrics. Track their erosion and growth. Byrnes and Wass suggest marking these accounts in the database so that your customer contact people know who they are. Build teams within your organization that focus on your relationship with these customers.
Walk in their Shoes
Lastly, find ways to walk in your high-profit customers’ shoes. Join with select clients to identify and develop new value footprint opportunities, ones that may not be obvious initially. Your high-profit customer relationship is your distributor differentiation.
Get tips and tricks like the above in The Art of Sales books. Or subscribe to the FREE monthly articles here.
