Does customer attrition play a part in annual planning? How many of our customers will go away? In setting growth plans for the coming year, one should ask, “what percentage of my customers might go away?” Some will go out of business and they stop buying. Others might be folded into a larger organization. If that organization has a relationship with a competitor, your business could be switched to another supplier. Further, some aggressive competitor could make inroads into your account through hard work and/or better relationships, by way of a valuable new service or through jaw dropping price levels. This is hard to face, but it happens. The question is, how much would any of these affect your business? To the best of my knowledge, the only industry to truly study this phenomenon is the HVAC/R industry. Three years ago, HARDI (Heating, Air Conditioning, and Refrigeration Distributors International) hired Mike Marks and Steve Deist of Indian River Consulting Group to do...

A couple of weeks ago, one of our  articles  covering sales compensation and commissions ran in two major industry trade publications.  Never in the previous 12 years of writing for this type of publication have we received anything even vaguely resembling the outpouring of thoughts and ideas.  Thinking more about the situation, it seems our industry is reconsidering and re-evaluating a six-decade old compensation plan. Many readers asked us to expound on the topic.  This is an attempt to provide some additional thoughts on the topic.  Do you pay commission on accounts where the salesperson does very little work? One of the biggest lies in our industry comes by way of the assigned account list.  Sometimes it’s geographical and other times it comes under the heading of “covering all the available accounts," but we continue to see sellers responsible for 100, 150 and even 250 customers.  Either way, it’s more than they can physicall...

We have long pushed for Distributors to get involved in the training business. This is especially true for those wholesalers involved in technology oriented businesses. But allow me to add a point of clarification here; when many think of technology they think of Silicon Valley - computers, data-communications and the like. Technology is nearly anything that changes and needs a bit of training to understand. Distributor members of HARDI, NAED, PTDA, AHTD, NIBA, SEDA and others should be considering training as a potential source of revenue. We believe that Distributor Specialists need to be involved in the training. Many upper quartile distributors have already figured this out, others are quietly ramping up their efforts. A resent survey conducted by accounting firm, RSM McGladrey, detailed the need for skilled workers. “One in five companies cannot find the workers they need for today’s advanced technology manufacturing and wholesale distribution environments,” said Karen Kurek, mana...