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)


 

      

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