Tuesday, March 26, 2013

An American Folk Tale with a New Twist

An American Folk Tale with a New Twist

We’ve been thinking about the new salesperson, actually gathering feedback from a number of good folks out there in distributor-land, plus tracking distributor trends.  The combination of all this information and a hearty blast of spicy food sent me to bed with my head spinning – leading to some tremulous dreams.

Dreams can be mighty strange, but I thought I would share this one.

Remember the American Folklore tale of John Henry?  OK, maybe not – let me refresh you.  Here’s the scoop from Wikipedia:

John Henry is an American folk hero.  He worked as a "steel-driver"—a man tasked with hammering a steel drill into rock to make holes for explosives to blast the rock away. He died during the construction of a tunnel for a railroad. In the legend, John Henry's prowess as a steel-driver was measured in a race against a steam powered hammer, which he won, only to die in victory with his hammer in his hand.

My dad used to sing the Ballad of John Henry.  Here’s Johnny Cash’s version:

Now the distributor tie in…
According to Modern Distribution Management Magazine’s Tom Gale, over 21,000 vending
machines were installed by distributors in 2012.  Let me repeat – 21,095 vending machines selling our kind of stuff were placed into customer facilities – mostly by the humongous distributors (Fastenal, MSC Industrial Supplies, etc.).

New age vending machines communicate sales data and other information back to the distributor’s computer system for inventory management and they allow customers to track precisely who used the equipment.

Vending machines solve customer accounting issues.  They don’t solve problems with applications, early wear and tear, or make suggestions for better application of problems.  But, they don’t cost 150 grand to train, they never take vacation days and they never jump ship taking customers with them.

Here’s where you and I come in.  If we are going to add value, solve problems, and all the other stuff we do on a regular basis, we better get darn good at it.  And we better make sure we tell the story in real financial terms, because if we’re just filling bins and fulfilling orders – there’s a machine waiting to take our place. 

Your thoughts?

Tuesday, March 19, 2013

The New Salesman: Territory Management via the Calendar

Whichever method you choose to do so,
making time to manage your calendar is important.
Calendar Management Equals Territory Management

Braving the risk of conjuring up some unpleasant memories from your grammar school days, let’s start our discussion with a pop quiz.   Ready… here goes.  True or False?  Everybody knows how to use a calendar.  My own experience is this; everyone recognizes a calendar when they see one.  Outlook has a calendar built in to the software.  Most smart phones have a built in calendar as well as over 14,000 calendar apps available (yes, we checked.)    Google has a calendar that can be utilized by both desk top and mobile users.  But still, very few people know how to use a calendar.

A sales manager who assumes their new people know how to use a calendar is in for a life of disappointment and frustration.   A few months ago, we did a cross compiled survey of distributor salespeople and regional managers from the distributor’s top supply partners.  Our goal was to measure the ability of distributor salespeople to make use of selling resources available through their partners.  The results were disturbing.

Even with long windows of notice, very few salespeople were able to schedule customer appointments with any degree of efficiency.  An amazingly large percentage of the total were basically “flying by the seat of their pants,” calling on customers without an appointment.   An even greater number scheduled their time less than two days in advance.  Over a quarter of them appeared to not schedule their day until they arrived at the office.  Obviously for that new guy, this is a habit that should be avoided at all costs. 

Create the habit of setting appointments-scheduling time to schedule time
So what makes for a good use of a person’s calendar?  Appointments are a fantastic start.  Realizing that new salespeople have a difficult time making the connection leading to appointments, this one can be tough.  However setting appointments is a skillset that must be developed.  Experience dictates many new guys fail to schedule time for making appointments.  The best time to making appointments is Monday morning and Friday afternoon.  So the first bit of calendar training comes in scheduling a time for actually setting up these appointments.

Let’s not sugar coat it; early on, setting appointments is a double dose of tedium and rejection – almost totally thankless work.  Given this little dash of unpleasantness, the new seller falls into more pleasant tasks.  Pleasant translates as “easy,” however, easy does not mean money making. Things like answering emails, reviewing quotes, answering incoming customer calls typically handled by inside sales staff and updating files quickly fill the time.

Here’s a better way.  Prior to that Monday morning or Friday afternoon scheduling session, the salesperson (and their manager) divides the territory into quadrants.  The salesperson uses the quadrants along with a list of people he would like to meet for an appointment – this includes their company, the customer’s quadrant location and phone number.  To maximize face-to-face selling time, calls are made to the customers by quadrant with the idea of filling in activities in a particular quadrant by day.  This eliminates back tracking and reduces time spent zigzagging all over the territory.

Whenever possible, the first call should be made as close to 8:00 as possible and the last call should be set at 3:00.  This gets the salesperson into their territory as soon as possible.  3:00 may seem like an early end to the day, but as an experienced sales person can attest, “I hate to visit after 3:30 because the customer is ALWAYS in a hurry.  This means we have to skip over important details and end up either rescheduling or doing more follow up by phone and email, which takes away from my time with other customers.”

Our experience indicates the most efficient way to handle making appointments is to use the business land line for outgoing calls and a cell phone as the number for customers to return the call.  Using this technique, voicemail messages result in calls back to the cell number – where they can easily be converted to appointments.   Once the first and last selling times are scheduled, the rest can be filled in with a comment like this one:  “I will be in your area on Wednesday.  I have an appointment at 8 but could stop by later in the morning if you are available.”   Once an appointment is set, a follow up confirmation email is a great reminder for the salesperson and the customer.  Sending an invitation for the appointment will assure that both parties will be reminded.

Block out the calendar for better efficiency
We already talked a bit about setting appointments for 8 and 3 but there’s more to it than this.  Over the years, we have seen dozens of otherwise good salespeople fall into the habit of stopping by the office each morning to “take care of a few things”.   Even when they arrive well before the start of working hours, they find themselves “stuck” in the office. 

Phone calls from customers, “drop by stops” from supply partners, and conversations with their support staff cause them to stay in the office far later than anticipated.   By blocking off their calendar with an appointment at 8, they get out of the office and into the field every morning.  Setting up an appointment at 3, keeps the new guy working throughout the day.  Drop by calls and reactive calls to customer issues might fill the rest of the time but at least the first and last bit of the day are proactively focused.  He will eventually find that having an appointment at 8:00 will lead the way to appointments at 9:00 and 10:00 and so on.

If no appointment or customer can be found, the nation’s network of Starbucks (and similar establishments), offer a quiet haven for answering emails, returning phone calls or building proposals.  In my mind, all of these make for better time usage than a long drive back to the office just to do “paperwork”.

Blocking out time on a calendar is also beneficial for those that help indirectly with selling.  Whether it’s an assistant/receptionist, inside salesperson, management, or even a spouse, sharing a calendar that gives an accurate picture of your day can help others know if and when to forward calls, schedule meetings, or expect your return to the office.

Create a system for follow-ups
Salespeople are faced with an avalanche of dates.  When a customer needs something tomorrow or next Friday, typically there is no problem.  But when a customer says, “We decided to postpone this project for 90 days…” problems occur.  Rather than leave these important dates to the customer to remember, or counting on an iron clad memory to recall, why not tag the item for later action?  Without sounding like the grandpa character from a cartoon show, back in my day a major breakthrough skill was the creation of a follow-up file.  Quotes, important customer information and reminders to call customers were gingerly placed in a follow-up file with a date written across the top.  At the beginning of each week, I went through the follow-up file to pull out everything I needed for the following week.  I personally still use this system even for non-selling activities, but I also use my Outlook reminder, which is synced with Google, that sends me a text reminder.  I know some more advanced CRM systems allow the placement of reminders and other tasks, including some with email reminders.  However this follow-up is done, we cannot count on a new salesperson to come onto the job with these skills.  And, they’re too important to overlook.

If your company doesn’t have a prescribed process for handling tasks and reminders via a CRM system, develop a paper based system.  Build in a methodology of measurement.  If a new salesperson has been working for 60 days and doesn’t have a single reminder set up, then a “management moment” might be highly recommended.

Calendar management is closely linked to territory success.   Returning to our earlier premise – most people don’t know how to work a calendar.  Invest early for future dividends; error on the side of safety.  During the first 120 days, spend some time teaching, measuring and managing your new folk’s use of the calendar.

A final note: Paper calendars have provided a reliable reminder system since people started setting appointments.  As great as electronic devices are, they are prone to bugs, often need to be charged, or require certain signals to work.  A paper calendar is never a bad option and is always a good back up, even if it’s just printed from said electronic device. 

Distributor Planning Made Easy. Check out our Distributors Annual Planning Workbook:

Friday, March 1, 2013

The New Salesman: Supply Partner Relationships

Knowing the ins and outs of key Supply Partner relationships
can jump start the New Salesman's selling efforts. 

Know your friends – Relationships with Critical Supply Partners

They say no man is an island. I believe no salesperson is an island. The only time the Lone Ranger is a constantly successful hero comes in the pulp-fiction westerns on TV. In reality, sustainable success only comes as the result of building a number of alliances. We have talked about product knowledge, building relationships with customers and setting expectations. Let’s shift our time toward building profitable alliances with the strategically important vendors – we call them Supply Partners. 

Nearly every distributor has special relationships with a handful of critical Supply Partners. Oftentimes, our business is so closely tied with these suppliers, that they receive special attention from our organization. Over the course of time, there are countless stories of salespeople short circuiting strategic relationships because they failed to understand just how important these people were to our business.  

Let’s start from the very beginning. The new salesperson must understand exactly who these critical Supply Partners are and why they hold that status. I believe a list is in order.  

Earlier we rambled on about setting expectations and building product knowledge. Hopefully, your plan for building product knowledge pushes these crucial Supply Partners to the forefront. Whenever there is a choice, the new sales guy should grasp the offering of the Supply Partner first. 

The relationship with the sales team of these key Supply Partners should be given a jump start. Here I recommend some type of joint introduction along with an explanation as to the place the new seller fills in your organization.  

The rookie seller should understand in no uncertain terms that their job is to create and nurture a one-on-one relationship with the person closest to your organization at this Supplier. Backward selling is definitely in order.  

In today’s distribution environment, overlapping distributors are found all too often. On the flip side, it is not uncommon for a distributor to have second or even third lines. Here’s the way it works. 

MFG A is our key Supply Partner for left handed widgets. Unfortunately, they are both high priced and have multiple distributors in the territory. To offset this weakness of MFG A the distributor has added El Cheapo widgets to their line card for cost sensitive customers. Sound pretty common? Here’s where distributors damage their reputation and upset well laid strategies.  

The new salesperson inadvertently introduces El Cheapo to a customer who should have gone to MFG A. Because of the mergers, acquisitions and other shifts in the way manufacturers are going to market, the real issue is much more complicated. Perhaps MFG A is strong in left handed widgets but weak in widget housings. The permutations are many and confusing to the new salesperson. 

Problems grow because very few distributors take the time to spell out exactly when and where the key lines should be used and under what conditions it is reasonable to substitute something else. Think about this from another level. Here stands a new employee. He or she has less than a year of experience with your company, yet is making decisions which impact the strategic direction of your whole selling effort.  

Let’s recap:
1) Who are our key Supply Partners?

2) What products do they make?

3) Here is the local rep, build an alliance with him to breed success.

4) Here is when (if ever) you substitute another product for the key vendor.

5) Here are the gray areas where you need to ask first.

6) An error with an important Supply Partner can cause harm to our business as a whole. 

Finally, it doesn’t hurt to explain the whole supplier stratosphere with your new sellers. Here is our own personal version from The Distributor’s Annual Planning Workbook:  

1. Profit Partners– these are the supplier who account for day to day profits. They work closely with your team to grow business today and provide the revenue flow that supports your business.

2. Strategic for immediate growth – these are suppliers that allow you to produce growth and revenue next year. Often these are product lines on the periphery of your current sales. For example, an electrical distributor might produce immediate growth by working with a vendor of electrical safety equipment. Just a little attention today could produce growth without a great deal of training and positioning. These will never make your top 10 suppliers, but adding a couple hundred thousand to the top line sale is not a bad thing. (By the way, I recommend setting a minimum growth amount to make this list. This varies from company to company but $100K in two years is a good starting point.)

3. Strategic for long term growth – these are accounts which drive your company into the future. They stand in place to be major producers sometime in the next 5 years. As our world changes these manufactures are emerging technologies which position your company over the longer haul. 

4. Customers want them so we keep them around – suppliers that you would like to convert their sales to something else but customers keep asking for the brand. Some manufacturers have strong brands but employee saturation distribution. They bring little strategic value to your company, the margins may be low, and they do little to improve your place in the market.  

5. Line fillers– we all have them. We take orders for their products but don’t really proactively sell their products. 

6. Don’t know why we have them – do little for us and occupy a small place in our catalog and on our shelves. We probably would have severed ties but just haven’t gotten around to it. 

The full version of this workbook can be purchased through Amazon.com at http://tinyurl.com/Dist-Annual-Planning-Workbook)



Distributor Planning Made Easy. Check out our Distributors Annual Planning Workbook: