Wednesday, December 21, 2016

Santa Shares All…. Six Lessons for Distributors

For those of you who don’t know, Santa Claus and I have a special relationship. It began way back when I was still knee high to a short elf. It seems my grandfather, who was a jolly sort of guy himself, was somehow connected with Mr. Claus. Imagine being 3 or 4 years old and learning Grandpa and Santa were buddies. Special feeling? You bet. I knew it was real when Santa greeted my Grandpa with, “Hey Red (my Grandpa’s nickname,) how late did you stay down at the Eagles’ Club last night? If they weren’t pals, how in the world could this jolly red suited man know these details?

Santa knew me by name, too. Really! And since that day back in the early 60s, Old Santa and I have enjoyed a close and special friendship. According to Santa, yours truly has managed to make the “nice” list for 5 of my 62 years, but this story is not about me. It’s about distributors.

During a slow point down at the local mall, I managed to grab a few minutes of the jolly old elf’s time. After our normal greeting and a few “Ho, Ho, Hos, Santa took me aside and asked me to share a few pointers with my distributor friends. It was an “everything important in distribution can be learned from Santa” sort of moment. Rather than blast out with bloviating reindeer breath, let me pass on six of Santa’s lessons.

Lesson 1: Segment your Customers
Santa said he learned this lesson some 500 or so years ago. Once he started segmenting his customers into groups, naughty and nice, business picked up. Today, Santa’s North Pole organization carefully tracks customer behavior and provides services accordingly.

Santa believes distributors must understand customer demographics too. The customers, who value your service, buy in the right quantities, display the right kind of buying behaviors and allow you to make a profit, deserve extra nice treatment. Santa and his team of elves carefully insure the “nice” boys and girls get better treatment than the rest. Simply put, distributors can dive more profitable business if they target the right customers.

Lesson 2: Build your own unique brand
The red suit and eight tiny reindeer shtick is part of the whole North Pole Brand. Flash a picture of a slightly overweight guy dressed in a red suit with white fur trim and kids anywhere immediately recognize the brand.

Even Coca-Cola knocked
on Santa's door
Santa and his team of marketing elves first came up with this whole branding deal back in the 1600s. Since then, dozens of marketing gurus came knocking on the North Pole door; each proposing a different strategy. On a side note, you can only imagine what would have happened if Santa would have taken on that Paisley Nehru Jacket pitched sometime in the 1960s. Thankfully, Mr. Claus avoided the temptation of flipping his branding message.

For distributors, this means understanding what you’re known for in the marketplace and carefully advancing the message. Are you known for having a larger stock of hard to find items than your competitors? Is your team more tuned to technical support? Are you good at solving logistics issues? Is your counter more knowledgeable than those of your competitors? It’s time for distributors to stop relying on their supply partners for branding. In the future, distributors must understand what they’re known for and advance the message. It develops a strong and loyal following who are willing to partner.

Lesson 3: Adapt to changing customer styles
When Santa first started up, things were different. Boys and girls were known to whisper their Christmas wishes up the open chimney hearth. Santa had thousands of elves employed at listening posts. It was mostly tedious and time consuming work. Later, the kids wrote their wish list on a piece of paper and tossed it in to the fire with the hopes that Good Saint Nicholas would somehow read their smoke signals.

For most of us, an annual letter to Santa was something of a
tradition. But today, Santa receives requests via email, instant message, phone calls, and the traditional “snail mail." Along the way, Santa has constantly upgraded the way he monitors and processes these incoming orders. He's had to shell out some big bucks on technology and training.

Today, distributor customers communicate in ways unheard of just a decade ago. Inside sales teams receive faxes, emails, and EDI communications at the speed of light.

Santa, who keeps abreast of the younger generation, believes some distributors have missed out on the trend toward communications via instant messaging. Applications currently exist which allow customer instant messages to appear on the inside sales team’s computer screens. This gives customers a new way to communicate with the team and allows inside salespeople to handle multiple customer requests simultaneously. Further, as customers move toward faster and more sophisticated devices, the jolly old elf believes the trend will grow.

While we’re on the subject of mobile devices, distributors need to evaluate some of the applications designed for speeding up customer selection of products. Santa tells me that he is working on a new “app” for next Christmas.

Lesson 4: Don’t forget your warehouse
It’s no secret that Santa operates from a single central distribution facility located in a remote part of the world. One would expect that this could be a disadvantage to the fat man and his organization. However, over the years, Santa has refined his delivery mechanism in order to meet customer needs. North Pole warehouse is equipped with all the modern material handling and tracking tools. Each year literally millions of Red Rider BB guns, electric trains, Easy Bake Ovens and dolls are delivered accurately and on time.

Santa asks distributors to take time to ask how their warehouse today differs from the warehouses of 1983. Does your system employ barcoding, part location, wave picking, or any of the tools which allow you easier throughput and cheaper warehouse operations?

Lesson 5: Never say no
Santa has developed a customer service plan second to none. He has trained his team of salespeople (dressed in Red down at the mall) to never say no. Instead, they say, “Santa will have to check.” There’s a big difference.

One of Santa’s distributor friends (a guy named Jack) once told me this: “I never say no, I just ask; how much you would be willing to pay to make it happen?” Distributor sales and customer service people need to be trained to offer options when the customer’s original request can’t be met.

For instance, if a customer asks for a part that’s not on your line card, do your customer service reps say “we don’t have it?" Would it be better if they asked if a substitution can be made? While this doesn’t seem like “reindeer science," it does provide your organization with additional sales opportunities.

Further, if the customer would like to have something sold by a competitor, do you have a plan? Some customers want you to take ownership of the issue, regardless of cost. Santa thinks that’s a cool concept.

Lesson 6: Understand the cost of services
Finally, Santa wanted to point out the rising cost of value-add services. For eons he assembled dollhouses, set up elaborate train sets and put together back yard swings. It was pretty cheap to do this back in the 1960s. Even though the elves and reindeer work for carrots and peanuts, he has been more reluctant to put things together in today’s business environment. Health care benefits are spiraling out of control up north too. Instead, Santa pushed the work off to the moms and dads of generally good girls and boys.

He will still set things up for the really, really nice kids; the ones who never (ever) pout or cry. The medium nice kids have to pay for services and I don't mean in cookies.

Santa thinks distributors, now more than ever, need to understand the cost of the value-add stuff they provide. As a matter of fact, Santa took time to make one last point. The great bearded one strongly recommends that distributors everywhere read Frank Hurtte’s The Distributor’s Fee-Based Manifesto. He won’t be placing this book under your tree because he still remembers that incident at the golf outing last summer (Santa really does keep track of these things.) Naughty and nice applies to everyone.

Even the naughtiest distributor can order the book in time for Christmas. It’s on Amazon.

Now a word from Santa’s longtime friend and veteran of five seasons of niceness:
December is a joyous time of year. Whether you celebrate Christmas (I do,) Hanukkah’s Festival of Lights (many of my friends do) or anything else, I hope you are blessed with time for friends, family and fun.

And, my Grandpa and Santa really were close friends.

Frank Hurtte, Founding Partner of River Heights Consulting, speaks, writes and consults on distributor issues. He can be reached at
Santa has him on the “naughty list” again.

Thursday, December 8, 2016

Santa on Selling

Santa in 1881 by Thomas Nast
Everyone knows Santa Claus. Red suit, long white beard, familiar 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 in his 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
Photo Credit: GM
decades worth of being on the nice list to score 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 kids’ lists, 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 of 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 just simply 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 is 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 the 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 approach 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. Even though you didn’t get that train set, you were all smiles with the sled.

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 lists and then checking them twice. In our business, knowing who’s naughty and who’s 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; that’s how loving spouses can be. It turned out to be a great idea so I brought the entire
concept 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 nice and 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 pointed out when I almost slipped onto the naughty list, mostly for fibbing, but somehow I managed to stay in Santa’s good graces through 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 2017…

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.

Sunday, December 4, 2016

Fairy Tales for Sales: How to Stay on the Nice List

Introduction and explanation:
A few years ago, a friend (fellow writer) and I were bouncing around ideas for the future. Somehow we got off topic and started talking about the stories shared with our kids back in the day. In a world where none of the kids’ stories actually relate to the life of a distributor salesperson, we wondered what would happen if we created “Fairy Tales for Sales” – stories which carried meaning for the sales professional and the kiddos as well.

This year we are providing a couple of Holiday Stories which fall under these guidelines. Good reading for the kids and a message for the grownups. We hope you enjoy….

Negotiating with Santa
As Frank looks back, he may have been a bit like Billy...
Looking back at the last year, Little Billy wasn’t sure his behavior would put him onto Santa’s nice list.  There had been a few temper tantrums, a little pouting and an issue at school with his teacher.  Just last week, Billy got into some trouble with his perpetually nice baby sister after trimming her dolly’s hair into a mohawk.  Of course, he had his shining moments; he carried out the trash without being asked, he put away his dirty clothes before bed and helped with dishes on Thanksgiving.  Once last summer, he helped a decrepit old distribution consultant across the street.  Still, these were just isolated incidences of niceness. 

Over the weekend, Billy joined his mom on a shopping trip. As they walked in from the car, he could feel the biting chill of winter in the air.  Once in the mall, they walked by the spot reserved for Santa Claus.  In many ways, young Billy was glad they didn’t make their normal stop to greet the Red Suited Elf.  Billy tried to avoid eye contact with Santa sitting on his big red velvet chair, but as they walked by, Billy peeked over his shoulder and noticed Santa not looking like his merry self.  

For the next several days, Billy was good, actually very good, but he was troubled.  What if Santa didn’t accept his newly improved behavior?  What if the North Pole tally still showed him on the naughty list?  How would he respond on Christmas morning when his little sister’s stocking brimmed with  presents and his contained lumps of coal and bundles of switches? 

Billy's thoughts kept him from being his happy self.  He was truly down in the dumps about something.  Late one night, after the kids were fast asleep, mom and dad discussed their concerns about Billy's moping behavior.  They were troubled.  Christmas being a joyful season, this wasn’t right.  His parents decided that dad would drive Billy to school the next day to try to figure out what was wrong.

The next morning, dad and Billy took the long way to school.  After a stop at their favorite Kwik Shop for dad’s morning coffee and a donut for Billy, dad asked Billy a few questions:
Billy, is there something bothering you?  Mom and I have noticed you aren’t your normal cheery self?  Are you feeling ok?  Is everything going well at school?  Is that big kid down the street picking on you again?
Dad, I am worried!  (With a tear starting to slip down his cheek) I am concerned that Santa has me on the ‘no fly naughty’ list.  I don’t want a bunch of coal lumps and switches for Christmas.  I really want Santa to bring me the Official River Heights Distributor play set this year.
Well, son, I think we can figure out a way to get past this.  You just keep being nice and I will think of a way for you to impress Santa.


Thanks, Dad, you're the greatest!
Who needs Hatchimals when you can have The Distribution Play Set?

Billy hugged his father, hopped out of the car and skipped into school.  Dad was glad to see his improved mood. 

As dad drove off to his first appointment, he pondered his young son’s dilemma.  Billy was much like himself, overall a good kid, but had reasons to be on the naughty list now and then.  There was no time to stress as he needed to mentally prepare for his next sales call with Tom Bylow, Buyer at Discount Construction.

Digressing just a bit, Mr. Bylow is not a nice person.  Without much of a “Ho, Ho, Ho," Santa and his elves have a saying, “Nobody is Naughtier than ‘Terrible Tom’ Bylow.”  As a kid, he received so much coal in his stocking, he considered contacting Peabody Coal.  Known as the biggest bully on the block, he found his natural calling in the purchasing department.  He used every trick in the book to bully hard working salespeople into giving him undeserved discounts and what he liked to call “Bylow breaks”.

Give yourself an early Christmas present and watch this video 

Thankfully, Billy’s dad was prepared.  A year or so ago he had attended a special SPASigma course on negotiation skills and took it seriously.  As a matter of fact, each visit to see “Terrible Tom” called for a quick review of the continuing education which was part of the class.  Always a professional, Billy's dad gracefully deflected each attempt to bully a better price.  A sale was made; negotiations done right.  Discount Construction got a good value and dad’s company made great margins. 

After the call, Billy’s situation danced back into dad’s mind.  Then an answer came ringing like a string of Christmas Bells.  Billy was nothing like Terrible Tom.  Deep down inside he was a good little boy who sometimes misdirected his energy.  Maybe Billy could negotiate with Santa.

After dinner that night, dad asked Billy if he would like to help make popcorn while mom and sister watched their favorite show.  Always anxious to spend special time with dad, Billy Boy jumped at the opportunity.   

As they bustled around gathering ingredients for their snack, dad asked Billy if he was ready for their upcoming mall visit to see Santa.  Billy turned gray and started confessing his many excursions into the naughty realm.  Midway through the third episode of bad behavior, Dad interrupted with, “What about the nice things you’ve done?  I know you have helped mom clean and even assisted your sister with a couple of chores.  Those count.”

With tears forming on his cheek, Little Billy pointed out that in his seven previous visits with Santa, he was always asked the question, “Have you been a good boy?”  This would be no different and he didn't want to lie to a man with magical lie detecting skills.  At this point, Dad asked Billy if he had ever heard the word, "negotiate."  Billy wasn’t sure.

Dad explained, negotiation is a way of communicating that helps people work out better agreements; both sides use this form of communications to get what’s really important to them.  Real negotiators take the time to understand what’s important to the other guy.  While Santa may be magical, he is also reasonable, making him the perfect negotiation partner.  Dad shared a list of things he knew about Santa:

  • Santa was already planning to make a stop at Billy’s house to bring presents to little Sis.
  • Santa gets jolly when he sees the happy look on little boys’ and girls’ faces.
  • Santa really doesn’t like to deliver lumps of coal or bundles of switches.
  • Santa often overlooks a few naughty behaviors if the nice behaviors are sincere.

Based on his SPASigma training, dad knew that practicing, or role playing, negotiation strategies gave salespeople an extra advantage.  So he asked Billy to think about what he would say to Santa during his visit at the mall.

The next day on the way to school, Billy practiced his talk with the man in the big suit.  He even asked dad to play the part of Santa:

Dad (as Santa):
Ho, Ho, Ho… Hi Billy, Have you been good this year?
Hi Santa, I admit that I have made a couple of naughty mistakes this year, but I have done a lot of nice things too. 
Dad (as Santa):
What do you mean Billy?
I try to be nice all the time, but some days I make mistakes and feel bad about my actions. Overall, I have had more nice days.
Dad (as Santa):
Well, it’s the thought that counts in the world of naughty and nice.  So, I guess Santa will need to see what he can do!
After role playing, dad and Billy both thought the story was good, but Billy needed to continue practicing.  His exchanges in the mirror every day paid off.  Things went wonderfully.  Santa not only agreed that Billy’s behavior was worthy of being on the nice list, but he also gave a big thumbs up to the elves cranking out another of those cool Official River Heights Distribution play sets.

The moral of the story:  Negotiation is good, Tom Bylow is bad and everybody negotiates… including Santa.