Wednesday, December 23, 2015

Santa on Selling

Everyone knows Santa Claus-- red suit, long white beard, familiar belly laugh and long-time leader of all things North Pole.  For some strange reason, most don’t have a clue as to the early days of his career.   So let me break it to you, Santa got his start in sales.  A long time ago, hundreds of Christmases before occupying the big chair in the corner office up at the North Pole, Santa worked on the selling side of North Pole Distributing.

Like many hardworking sales types with hundreds of years under his belt, Santa leveraged all the lessons learned out in a territory to move up in his organization.  Playing a front and center role in a global distribution organization with customers around the globe, Mr. Claus puts those lessons to work almost every day. 

It’s difficult for a lowly industry consultant to get an audience with big time executives, but last week I leveraged over six decades worth of being on the “nice list” to grab a rare opportunity to speak with Santa in his North Pole office.  I wanted to impress, so rather than humdrum questions – the kind most people ask – I set out to do something different.  Skipping over the normal topics of reindeer care and feeding, keeping the Elves busy in the workshop and the naughty and nice list, I asked Santa about early lessons from way back in time.  Those old days when he was a rookie sales guy for The North Pole.  

Here are the highlights of our talk.  Whenever possible, I am using direct quotes from the Jolly Old Elf himself.

Santa on Targeting:
You know Frank, I share your views on targeting.  Years ago, we here at North Pole Distributing decided we couldn’t do everything.  You call it targeting, we call it the naughty and nice list.  There are just too many kids out there for us to deliver presents to everybody.  So, we started what the elves call the list.  We do our best to take care of the nice boys and girls and let the naughty ones get their presents somewhere else.  In the past couple hundred years, we’ve further refined our customer-base to exclude moms and dads.  You may have noticed that sometime back in the 70s we took you off the list because, well, you were getting too old. 

For some it doesn’t make sense, but the North Pole Distributing team is devoted to providing the best of service to a targeted group of customers.  They love us, we love them and it helps us do a better and more efficient job.

Santa on Customer Service:
The whole North Pole organization thrives on providing the
best customer service on the planet.  For as long as Ole’ Santa Claus has been sitting in this chair, I have stressed the importance of getting the right toys to the right girls and boys on Christmas Eve.  It’s our mission, vision and creed all rolled into one.  The Elves sometimes get sick of hearing me say it, but every time we break for chocolate and cookies, I feel compelled to bring up customer service as Numero Uno.  Every break in a reindeer game, Rudolf and his crew hear me retell the story.  On time delivery is only part of customer service.  There can be no disappointments.

Santa Says Under Promise and Over Deliver:
Remember the time you asked for an Electric Train way back
when Kennedy lived in the White House?  I can still recall.  You and your grandpa dropped by my shop and you looked old Santa in the eye and said, “Santa, I have been good.  I brush my teeth, do my homework and I am nice to my little brother.  Can I have an electric train?”  Remember what Santa said?  I told you, we’ll see if the elves can come up with something like that.  I learned that back when I was a seller.  I knew the elves were running behind on train sets and I knew your parents were planning on buying you one for your birthday on January 23rd.  Seems like I brought you a really cool sled that year, and since the snows were waist deep to a tall Elf, you had tons of fun.  That’s how the North Pole works; under promise, over deliver.

Santa on Tracking Customer Data and CRM Systems:
Up at the North Pole, customer data is king.  Or at least right after Santa Claus, it’s king.  We’ve been doing the naughty and nice list for eons now.  Back when we started the practice, it was all paper.  Lots of manual entries, teams of elves checking the list and then checking it twice.  In our business knowing who is naughty and who is nice is pretty darned important.

I started the practice back when I was handling the small Schleswig-Holstein territory in Germany.  I was struggling to remember all the kids and their behaviors and Mrs. Claus suggested writing a list.  In retrospect, she was questioning my memory way back then.  But, it was a good idea and I brought the whole thing to the North Pole.  Over the years we’ve fine-tuned it and a few years ago one of the elves in our computer department modernized the whole thing.  We never miss a naughty or a nice and we never need to check things twice.

My time was short, Santa and his Elves are pretty darn busy this time of year.
Just like back in the old days, my time with Santa just zipped by.  Our scheduled hour seemed like just a couple of minutes.  Along the way, he did point out a couple of times when I almost slipped onto the naughty list, mostly for fibbing.  But somehow I managed to stay in Santa’s good graces throughout all these years.  As the time was ending, I asked Santa if he had any final words for the good girls and boys across distributor-land.  Here are the Jolly One’s final words…

Enjoy your Holiday Season… Make Merry with your Friends and Family… Make plans for a Happy 2016…
Ho, Ho, Ho….

Authors note:  Santa and I have enjoyed a special relationship through the years.  Based on the way they talked about things going on down at the Eagles Club, it seems my Grandpa was a close personal friend of Santa.  My own grandkids have noticed that I know Santa too.  Hopefully, you haven’t lost touch.  

Monday, December 21, 2015

What’s the story on your product lines?

Let’s start with two assumptions. First, your company sells solutions, not a hodge-podge pile of parts. Second, some of the products you sell fit together nicely to solve customer
issues. Some reasoning has been applied to the building of your product offering. As you set out to create solutions, you started assembling the right parts and pieces to address customer issues.

But I have a question. Are your customers connecting all the dots? Most of us assume our customers realize how all the stuff in those gigantic catalogs fit together. Experienced customers probably rely on you to carefully select just the right products for their particular applications and offer them up in a solution format. A few might bring you into the equation by sharing business concerns and problems before they have fully analyzed the whole situation.

Newer, and even some existing, customers are different. They may not fully understand your brand of solution selling. Some may not yet trust your suggestions. To these folks, it is important that you provide a story around your products and services.

What kind of a story? Let me give you a couple of examples.

Let’s say you are calling on a customer contact from a water treatment facility. Whenever showing off a new product, why not start off with details outlining a case study on how the products you are about to show make sense in the industry. How your Variable Frequency Drives are perfect for running pumps and how your flow products can be easily fed signal information to the aforementioned drives. Signals might be monitored remotely via SCADA products provided by another manufacturer and pull the data from the drives for easy monitoring. The product you sell are just “characters” in the full story of solving water treatment related problems.

Another example might apply to a safety distributor calling on a large end user facility where welding is a big part of the customer process. The story you weave outlines how an assortment of products from your line card all benefit workers in an environment filled with sharp objects, heat and hazardous gasses generated with welding. The “story” is we have more than just a collection of products, and we possess what you need to keep your work environment safe.

Your story has the power of connecting you with the customer; building rapport. When carefully constructed, the
process forces the seller to think more deeply into potential customer issues. Further, a well-told story places you in the position of being a specialist in the customer’s individual needs.

In the best of cases, distributors build a series of marketing materials matched against a half dozen customer types. One brochure showing a half dozen products focused against the backdrop of the customer environment goes a long way to illustrate precisely how much expertise the organization has developed in the customer’s domain.

But what if you don’t know much about the customer?
For some of the new folks reading this, you might find yourself scratching your head and thinking, “I don’t really know all that much about the operations of some of my customers.” Here is where research comes into play. The internet provides valuable insight into the issues faced by many industries. Going back to our example of water treatment, we discovered a wealth of information on our very first “Google search."  For instance, we found Treatment Plant Operator Magazine’s website and a quick review would provide dozens of applications to which you might match your product groups. While we are on the topic of trade publications, nothing creates a better story than an article which lists one of your products in action.

Combine stories with others on your team…
I believe it is a good use of time in a sales meeting to discuss the best “story” for various types of target accounts. What products work, which are viewed as likely solutions and how they interact with other product lines can become great fodder for future sales calls. And, in my opinion, this will produce greater results than mere product minutia.

Go forth and create a great story….

Thursday, December 3, 2015

Distributor Fight Club: Knife vs. Fingernail Clippers

Are your salespeople headed to a knife fight with fingernail clippers?

photo: jokeoverflow
I travel for a living.  Delta Airlines loves me.  Over the course of the last decade of travel, the fine folks at the TSA security checkpoints have managed to confiscate over a dozen of the fingernail clippers I inadvertently left in my computer bag.  Dangerous weapons?  Somehow, I have my doubts, but the point is to the TSA Security team they fall into the same category as a 17 inch Bowie knife.  Would I want to take on someone armed with a real knife, switchblade or anything thing else?  Heck, no!  This brings us to the question, are we sending our sales teams into a virtual knife fight armed with a measly manicure set?

Allow me to get real. Our salespeople go into negotiations with professional buyers on a daily basis, most without real negotiation training.  Further, many sellers and their managers don’t really believe negotiations play a role in their world.  But they do.  Allow me to present a couple of points. 
Have you ever called on a person with the CPP credential behind their name?  This stands for Certified Purchasing Professional.  In order to maintain the accreditation, the individual must meet the following minimum continuing education requirements as listed on their website:
“Reapplication must be made every five years in order to keep certifications valid. A minimum of 15 additional points is needed for an approved updated status. Also, anyone who has not taken and completed the self-running online courses "Business Ethics for Buyers and Sellers", "Essential Law for Buyers and Sellers", "Managing Inventory - Maintaining the Proper Level", "Math for Purchasing and Business" and "The Science and Art of Negotiation" will be required to do so.”

Remembering these are the minimum, the list of the other 28 course options includes 6 which are negotiation-centric, including one little tidbit which reads as follows:

“Body Language - Make Buying and Negotiating Easier and More Successful
Body Language, a new online course to help you deal with suppliers. This course will give you an insight on how to read the gestures, body positions, and movements that reveal what the other person is feeling and how he or she is reacting. It will help you determine if the person is telling the truth, if the person is sincere, or if the person is hiding their opinion and motives. Being able to properly access a salespersons body language is an important skill that every buyer and negotiator should know.”

For those still wondering, let me throw in another detail.  I
asked well-known negotiation trainer Tony Perzow of SPASigma, an organization dedicated to improving sales negotiation, to elaborate on the issue.  Tony said, “During the years of the Great Recession we saw a change in the mix of our classes.  As companies worked to reduce their costs, I saw classes full of purchasing and procurement guys.  These companies realized the easiest way to drive cost out of their system was to apply pressure to their suppliers.”  Putting ourselves back in the time, sellers were desperate to get sales; at almost any cost.  My experience with distributor sales organizations shows many companies are still trying to work some of these poorly negotiated deals back to profitability.

Our customers don’t believe negotiation is a bad word.  As a matter of fact, they have made good use of the process.  Our sellers were ill equipped to even begin playing the game.

It is time to even the playing field
For the past couple of decades, distributors have been focused on “Value Adds” as their differentiator.  Extra service, extra work, extra product and other free stuff became the lexicon of the field sales team.  In an environment like that, any thought of real give and take negotiation was pushed to the side.  Is it any wonder distributors struggle with margin squeeze? 

Distributors need to revisit the lost art of negotiation.  Finding the right deal for both buyer and seller is the game we have elected to play.  Further, negotiating allows distributors to push their margins forward.  With this in mind, allow me to share another valuable point from my conversation with Tony Perzow, it simultaneously has everything and nothing to do with negotiating. 

Mr. Perzow pointed to a philosophical difference between street names in North America and Europe.  Very generally speaking, European streets are named for artists,
philosophers, places and scenes (The famous Abbey Road with tons of Beatles references was named after a farm.)  American streets are named after persons of power.  A quick walk through River Height Consulting’s “headquarter city” of Davenport, Iowa illustrates the point.  Presidents Washington, Jefferson and Adams intersect with General Pershing and Grant with a diagonal named for Iowa Governor Samuel Kirkwood.  We love power and it spills over into the selling world. 

Salespeople want the power to negotiate the whole deal.  But, this power works against them.  Distributors who limit the negotiating power of their sales teams score better in profitability and margin.  Why?  Selling is an emotional sport and even experienced sales guys can find themselves in that “make a sale at all costs” mentality. 

Saying “I don’t have the power to commit to that price” slows the process.  It gives the seller time to develop strategies, time to understand all of the costs associated with the concessions, time to understand the value the distributor provides and time to think about what commitments the customer needs to make in return.

If you are a sales manager, ask yourself these questions:
  • Do your salespeople really need to make the deal instantly?
  • Have your sellers ever made a deal and later determined it wasn’t as good as they thought?  Did your company make less money than deserved?
  • What would have happened if the seller could have stepped back and evaluated it or sought management feedback?
  • Are your salespeople willing to give up a bit of ego for more money?

Let’s get some training…
I don’t believe it’s a matter of if distributor sellers (and purchasing teams, too) need training.  From my point of view the real question is: What is the best training and how soon can you get your folks into the course? 

After reviewing the work of SPASigma, I heartily recommend their work.  Why?  First, the fundamentals are sound.  Secondly, classes are geared towards distributor selling.  This is a major difference.  SPASigma’s parent company has experience with over 400 distributors.  They understand the selling engagement at distributors is different than that used selling insurance, real estate and other one-of kinds of interaction. 

Finally, allow me to add one last point.  The very thought of negotiating may be a turn off to some of your salespeople.  In interactions with very successful distributor sellers, I have seem pushback on the topic of negotiation, and almost every type of skills based training.  Expect to hear one or more of the following:

1.      Negotiating is for sleazy used car guys.  People hate car guys for this exact reason.  I will not bring myself to this level.

2.      I have worked hard to build a trust-based relationship with my customers.  Using cheap tricks to squeeze out a few more dollars will ruin everything I have worked hard to develop.

3.      Customers in my territory are upstanding honest people.  They tell it like it is.  They don’t lie to me and I don’t lie to them.  This negotiation hocus-pocus is unnecessary.

4.      I have been doing this for years.  I get paid on gross margin.   I know how to get the best deals.  If anything, I should be teaching the class on negotiating.

5.      I sell solutions.  This is for commodity salespeople. 

I don’t believe any of these issues reflect the real world.  But perception is reality.   Some of your salespeople actually believe that negotiations are not part of their job.  Explore the situation with them.  Review previous instances of “deals” gone wrong.  Look for areas where just a bit of negotiation would have provided extra profits, better defined projects and real win-win opportunities for ever one involved.
I believe possession of negotiation skills at the seller level is…. well, not negotiable