Friday, May 27, 2016

Co-op Students in Distribution

With the Memorial Day weekend upon us and summer about to officially begin, I have been hit with at least a dozen emails, connects and calls from both distributors and students on the topic of Co-op programs in Distribution. 

Co-op and Intern projects are good for distribution
Back in our father’s day, companies made room for the kids of employees, family and friends in their business.  It was almost like a job benefit, work here and we’ll find a place for your son or daughter during the summer.  There were lots of “make work” projects.  Painting and scrapping, sweeping and shoveling, stacking and unstacking were all on the menu.  Readers who grew up in wholesaling families can probably relate to some of this.  The point is, there were a lot of jobs that nobody wanted and kids often got stuck with them.  It may still be happening…

Today, business is different.  Our building is more professional (with fewer dark obscure rooms requiring paint), our warehouses better laid out and our processes more refined.  The role of the co-op, intern or summer helper has changed.  We’re more likely to see a co-op seated at a keyboard than swinging a weed whip in the jungle that’s grown up behind the warehouse.  But, there are still dozens of great reasons for distributors to make use of students during their off time.

Here is my short list:
  • Reason 1:  Co-op programs give you an opportunity to learn about the next generation of worker.
  • If you distribute technical products, the co-op student is likely to be a customer in a few months.  Interaction helps you learn how they think.
  • Reason 2:  Co-op programs are a low cost ways to “interview” future workers.
  • You get to see a potential new employee’s work habits, ethics, and attitude over a multi-month period. while they get to sample your company’s culture.
  • Reason 3:  Co-op students have strong computer skills.
  • If you need data scrubbing, data entry or customer files updated, they can handle the work.
  • Reason 4:  Co-op students may also be qualified for other more technical tasks.
  • Need a blog set up, social media based content or customer research done, again you’d be surprised at the depth of skills available.
  • Reason 5:  Quality employees are hard to find.  Many of the students you hire may have never been exposed to the world of wholesale distribution.  They stumble into your place looking for summer work and march away knowing the value of our industry. 

A few tips for distributors with co-op…
Many people make the mistake of hiring co-ops without planning their work.  While I am not asking for direct supervision at all times, I believe a work plan should be developed.  This can include a number of departments; actually exposing the co-op to different groups does help them understand the business. 

I believe the following should be part of the plan:
  • A “go to” person who can answer questions and remove roadblocks in their efforts.
  • A set of tasks with instructions for how the task should be carried out and approximately what amount of time the task is expected to take.
  • A weekly meeting with a manager to review progress and answer questions which may not be directly related the assignment.  For example, the co-op might hear the term gross margin and not understand what it means or the importance of gross margin to the distribution industry.
  • A few well timed meetings with upper management.  Recalling, this young person may be a potential hire or a customer in a few months/years, I believe the time is well spent.
  • The ability to participate in training opportunities.  Supplier training, sales meetings and other events provide “big picture” insight to your business.

Companies like WarehouseTWO have a wonderful grasp of this concept and provide sample projects that are perfect for interns/co-ops.

Advice to the co-op student…
If you have a co-op or have a young friend who has taken a role at some other company, you may want to share the advice we have pushed out to a number of co-ops over the years.

Congratulations on landing a position at what I understand is a great company.  The things I recommend are elementary, please don't be offended.  I understand that you are coming into this position with a number of skills.  I totally believe you are intelligent, ready to work and probably have an educational head start in life.  I have given this advice to many and years later a good number have taken the time to confirm my thoughts.

With that, here are my words of wisdom:
  1. Always be at work 10 minutes early and ready to start promptly.  This is still valued by businesses.
  2. Never eat alone when given the opportunity to have lunch with co-workers.  Getting to know the people you work with on a personal and professional basis will serve you well in later life.
  3. If your group "socializes" after work, go.  Even if you only stay for a short time.  If alcohol is served and you are of legal age, feel free to drink.  But never more than two drinks.  Intoxication leads to dumb mistakes.  Dumb mistakes can set back your career.
  4. Don't be offended by "none technical" work.  Companies sometimes assign not-so-glamorous work to co-ops because nobody else wants it.  Working your way through the boring stuff will demonstrate your work ethic.
  5. Keep track of your accomplishments (on paper/computer.)   This is good for your resume and great for your ego.
  6. Be successful with the existing process before suggesting a new way.  It never hurts to understand how the existing process came into being.
  7. Establish a connection with everyone possible.  Create a personal file (I use MS Outlook, but I'm sure there is "an app for that") with the contact information and a few notes about the people you meet.  Logging some of the personal likes, dislikes, hobbies and other pertinent background information makes it easier to stay in touch later.
  8. Create connections with as many people as possible. LinkedIn is the Facebook of business.
  9. Never post criticisms or complaints about work on Facebook.  And, as soon as you read this, review your current Facebook posts.  Delete anything you wouldn’t want your boss or coworkers to see.
  10. Ask for a written review of your work at the end of the summer.
  11. When you get the review, never argue over the contents. It only makes you look petty.  Instead, ask for clarifications and pay attention to valid criticisms.
  12. Remember co-op programs are often just a 480 hour interviews.  Be professional, optimistic and resourceful.  At the same time, you owe it to yourself to be interviewing your employer.  Ask yourself, is this the right culture for my personality?  What department looks like the most fun? Would I want to spend 8-10 hours a day in this organization?
  13. Remember most people fail not because they lack technical skills, instead they fail due to poor interpersonal skills. 

With all this in mind, have a great summer.  And, if you are interested in learning more about the wholesale industry and distribution in general, feel free to join The Distributor Channel and don’t hesitate to reach out.  I would love to hear about your experience.

Wednesday, May 18, 2016

Sales Training for Distributors – Don’t forget Inside Sales

Last week I threw out some thoughts on sales training for distributors.  The response was great, but I received more than a half dozen challenges from inside sales groups.  The overall feedback could be summarized as: Don’t forget about Inside Sales. 

The comments reminded me of a couple of points:
  • Outside Sale people may make the phone ring, but it is the service the customer receives when they call that keeps customers coming back (aka customer retention).
  • Most customers gauge Distributor customer service by the quality of the Inside Sales team.

Historically, distributors have focused on outside sales improvement…
Experience shows when distributors invest in skills training (which is meager at best,) they tend to focus on the outside sales position.  A quick “Google Search” on the topic of “distributor sales training” brings up something like 28,600 results.  While I didn’t read all 28 thousand of them, I did look at the first twenty listings.  All were outside sales related.  Assuming that training organizations follow the money, we can assume there is darn little effort devoted to the team who keeps the customer calling and by which our customer service is often judged.  Houston, we have a problem...
Inside Sales was once a baby step in
the trail to Outside Sales

There are three potential reasons for this lack of investment in inside sales: 
  1. Back in the good old days, inside sales was viewed as a stepping stone job for outside sales.  The career trajectory for most people looked something like this: start in the warehouse, move to the counter, go to inside sales and finally grab a company car and hit the road.  Compensation for inside sales people was meager and anyone who stayed in the department was viewed at lacking in personality, drive, motivation or intellect.  You might say the good old days were not so good for the inside team.
  2. Most of the sales managers serving the distribution world grew up in the outside sales world and don’t understand the inside sales role well enough to realize what training should be focused toward.  They realize the need for training but tend to see it as a subset of the training they provide for outside sales people.
  3. Again going to distributor sales managers, most grew up in a pre-internet environment.  Only the most progressive managers realize selling roles have shifted.  Customers no longer count on their outside sales person as the harbinger of information.  Research indicates customers review products, find information and make preliminary decisions without waiting for data sheets to be delivered by their friendly outside sales resource.

The job of inside sales is changing…
Just a decade ago the job of inside sales centered on transferring phone and fax orders to computer system (ERP) orders, answering questions on delivery and selecting the proper part number from a customer’s detailed description.  All good stuff for the time, but nothing like today.

The end of these activities is on the horizon.  New computer technology allows orders entered onto customer PO forms to be automatically entered into the system without human interface.  Further, some of the product selection criteria has been automated or moved to mobile apps allowing customers to better determine the proper catalog number (even in instances where complex part number strings are involved.)

Today customers look to inside sales for more.  For instance, for most distributors, the first line of price negotiations has been switched to the inside sales team.  Front line technical support falls on to inside sales to do some logistical matters like expedites, freight issues and invoice clarification. 

Provide world class technical support and you will attract customers.

How do we train for customer support?
If your companies sells highly technical products (Programmable Controllers, computerized operator interfaces, complex sensors, drives or irrigation controllers, programmable heating systems, etc.), we recommend establishing an inside specialist(s).  This person would be the phone resource for customers with urgent issues. 

The inside specialist need not be a new hire.  We have seen companies delegate slices of their technology to individuals with keen interest in the products.  This will work well assuming the person is not overloaded with other tasks. 

But product support can be taught.  First, let’s assume customers commonly ask the same set of questions.  Identifying these questions and training on the answers grows the overall support.  Rather than being tasked to learn everything, inside sales is taught to understand the 20 most commonly asked questions on the product. 

Further, inside sales is taught a plan for escalating the call to someone more knowledgeable.  Years ago, my own organization created a “who to call list” which allowed the inside team to access factory and internal experts on various topics – but not until the problem was qualified.

Train for add-on product sales…
The most powerful marketing tool in history is McDonald’s

own, “Would you like fries with that?”  Sure, everybody knows Mickey D’s has fries, but just prompting the customer with the question turns a five dollar order into a seven dollar ticket (a 40 percent sales boost not considering fries have a high gross margin for the company.) 

Many of our computer systems (ERPs) allow the addition of suggested sale or “goes with” products.  We need to reinforce the importance of both populating the system and training our people to remind customers of products they may have forgotten.

Proper pricing can improve the inside sales role.  First, without a well-developed pricing system, inside sales teams devote lots of time looking up last prices paid and checking on price levels with their outside sales counterparts.  Inside sales should be trained to spot poorly maintained price files and provide the feedback required to get these fixed.  Second, inside sales people should learn a few basic negotiating tricks to avoid being “duped” by procurement professionals who have been trained in the science of negotiation.  If you have not yet see the information provided by Strategic Pricing Associates or their sister company SPASigma, we recommend you check out this really funny video.  

Again a special offer…
Last time we offered a postcard from Iowa to everyone who shared their suggestions for sales training with a grand prize of a professionally developed training class set up to be shared with your team.  We are repeating the offer.  No obligation, no telesales calls, no nothing.  Everyone will be a winner. 
Postcards from Iowa for every entry.
Free Sales Program to the coolest suggested subject.

BTW –Sue from California was our winner last time.  Sue claims she had never received a genuine postcard from the Tall Corn State.  Sue, we expect more entries.  The USPS wants to bring you another card.  

Thursday, May 5, 2016

Product Training or Sales Training?

When I ask the question “Do you have sales meetings?” most often the answer is to the
Without teaching about the
science of selling,
your meeting room
may as well be empty
affirmative.  Weekly, monthly, quarterly or something else is the standard answer.  But when it comes to content, a few follow up questions are often needed.  That’s when the truth comes out; distributor sales meetings are rarely about sales.  Oh, sometimes the numbers are reviewed.  Goals are generally discussed near the beginning and ending of each year.  And occasionally, distributors talk about the need for results on some supply-partner’s new product line.  Rarely, if ever, do distributor leaders actually talk about the science of selling.

Over the past few days, I have participated in over a half dozen conversations (phone, email and social media) on the topic of sales meetings.  Allow me to highlight.  In one conversation a manufacturer asked one of their top distributors if they did sales training.  Immediately and with great pride, the distributor manager launched into a conversation on the product technology training his team had covered over the past few months.  The manufacturer tried to steer the meeting back to selling skills with the mention of the Strategic Account course they recently put their team through, but the conversation immediately turned to product details. 

Just this morning I received the following message from a new connection: 

I enjoyed the article you posted on selling.  I am always interested in what’s happening in distribution sales, as it is a pretty unique type of sales.  Most of the information I get is product based, so I always find it refreshing when I see something that addresses the type of selling I do.”

This is not an isolated situation.  Over the years I have heard this comment from distributors in the Industrial, Safety, Automation, Fluid Power, PT and Electrical markets, as well as the Irrigation, Automotive Parts, Sporting Goods and Motorcycle parts industries. 

Considering distribution is an industry which is primarily a “sales function” driven business, I believe this is both a threat and an opportunity. 

If you are a long-time reader, you probably realize we cater to distributors who are knowledge-based and solution selling organizations.  Most of us pride ourselves on our product and application skills.  We add massive amounts of value to our customers, but the customer has to get to know us first.  Further, our industry is ever being squeezed to be more efficient.  For distributors, 60 percent of our budget is spent on our people and salespeople represent a large share of the outlay.  Developing, refining and growing selling skills serves to address both the speed of relationship and sales efficiency issues.

Why do we continue to ignore the sales skill part of the equation? 
Here are some possible answers:
  • Managers believe their sales teams are already seasoned veterans and training would be a waste.

  • The manager’s mistaken belief that professional sellers devote time to improving themselves through books, tapes, podcasts and online programs.  (My apologies and best regards to the one percent who actually do this stuff.)

  • Salespeople resist training especially if they believe management will require changes in activities

  • The “salesmen are born not made” theory which still persists despite research to the contrary.

  • Cultural tradition – they didn’t have sales training back when I was a “rookie” and I turned out all right.  (Maybe you’ve heard me reference “dinosaurs” in previous entries.)

  • A belief that sales training doesn’t work for our industry

  • Training is expensive

We wrote this in an article published by “The Distribution
Center Magazine” a publication dedicated to the HVAC/R distribution industry:

“… people are our greatest asset.” Yet, according to research conducted by Jonathan Bein, Ph.D., of Real Results Marketing, only 22 percent of distributors have a learning management system.  Sadly, distributors struggle to fund skills-based training for their organization during tough times. 

This will sound strange coming from a guy who offers training for a fee, but I would much rather see distributors spend 20 minutes a week reinforcing sales or leadership training than put their teams through a two-day session without follow-up.  Training can be part of your culture for next to nothing.

Sales meetings with selling skills content can be part of your culture. Every month, hundreds of great ideas are published in trade publications and in online blogs.”  

Why not take 20 minutes from your sales meeting to discuss one sales related topic?  The sales manager can provide personal examples and challenge the team to try something for the next couple of weeks and report back to the group.

Keeping with this theme and using “The Distributor Channel” blog as a reference, here are a few topics to explore:

To have a real strategic plan for our accounts we need to take inventory of what we know now and what we should learn in the future. Our plan must revolve around positioning ourselves to really be solution providers. In some instances, this means understanding that providing solutions to the customer is a poor use of our resources.

After nearly a year of calling on a couple of major accounts, orders still weren’t flowing.  As our day wound to an end, he asked me point blank, “How long should I pursue an account before I give up and move on?”  Here are some thoughts for you to consider.

From where I sit, standardized pricing, or whatever you want to call it, is destined for failure in our business. Our customers are tight with their money. They don’t want to pay more, they want to pay less.  This is a great introduction to using a pricing process.

This seems a bit silly, but I keep running into people who talk Gross Margin without really knowing the formula.  If you’re anything like me, this is a huge pet peeve.  BTW: this one is great for your suppliers too.  They clearly don’t teach this equation in most MBA programs.

A Challenge for my Friends…
Spend a little time thinking about the half dozen issues you, your coworkers or maybe your team have in the selling process.  It might be setting appointments, breaking past voicemail, getting customer time, establishing new accounts or a rash of other topics.  Jot them down and determine how you could introduce the subject into your next sales meeting. 

A Post Card from Iowa

Send me the ideas for your next sales meeting along with your address and I will send you a genuine post card from Iowa.  For one lucky reader who sends an idea, I will provide a customized PowerPoint covering your selected topic along with discussion points.  That's a minimum of 15 minutes of sales training for your team…