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.
