Ho Ho Hold Up! Santa Has Advice for Distributors By Frank Hurtte Santa Claus and I go way back to when I was knee-high to a short elf. One year at the Eagles’ Club, Santa greeted my grandfather with, “Hey Red, how late were you out last night?” and that was all the confirmation my three-year-old brain needed: these two weren’t just acquaintances. They were pals . Santa always knew my name, too, and we’ve kept up the friendship ever since. According to him, I’ve made the “nice list” five times in seventy-some years, a statistic he brings up more often than I’d like. But during a rare quiet spell at the mall, the Big Guy pulled me aside and said, “Frank, distributors need to hear this.” Think of it as Santa’s masterclass in business disguised as holiday cheer. Let’s unwrap Santa’s six lessons. Lesson 1: Segment Your Customers Santa learned early that segmentation matters. Once he started dividing his audience into “naughty” and “nice,” operational efficiency skyrocketed. ...

Clean Up on Aisle Sales: Segmenting Customers and Attitudes By Desiree Grace A funny thing happened on a customer segmentation journey: trash talk, bad behavior, and customer attitudes were exposed. Say what? Yep, when you start dissecting your customers and how you should be treating them, internal dysfunction often slides into the spotlight too. Here’s what happened: I was working with a client, whom we’ll call Zac, who had no customer segmentation in place. That meant every customer was treated the same way. There was no distinction between great, good, or frankly, terrible customers. They all received the same terms, attention, responsiveness... you name it. As you might guess, this was not sustainable. So, Zac and I collaborated on building a customer rubric —a list of qualities to evaluate and score his customers. This helped segment them into tiers, which in turn dictated how they would be managed. Would they be contacted monthly, semi-monthly, or quarterly? Would t...

White Swan Strategy: Increasing Customer Lifetime Value (CLV)—It’s NOT Magic! Desiree Grace   Some people think loyal customers are like magical unicorns—rare, and subject to luck, alignment of the planets, and other uncontrollable nonsense—the stuff of fairy tales. I would argue that loyal customers are WHITE SWANS. White Swans are highly predictable events that can be easily anticipated, and their size and importance can be easily estimated. You DO have control, if you know what to do. The choice is yours. Customer Lifetime Value defined Customer Lifetime Value (CLV) is key to customer retention and long-term profitability.  You can measure this easily by multiplying customer annual revenue by customer lifespan. Then, subtract any acquisition costs for year one and retention or servicing costs, like rebates, from the annual number, and presto! You have customer lifetime value. Let’s walk through an example: Cobalt Electric buys $10,000 per month per year from St...

I just finished reading a great article in The Electrical Distributor online called “ BOOSTING YOUR DISTRIBUTOR'S VALUE-ADDED PROPOSITION ”. As I started to read, I was attracted to a distributor comment which stated, “(Our) company knows that it may not always be able to compete on price, so it focuses on helping customers run their businesses better.” I liked the message, step away from pricing and instead work on providing the kinds of services customers value. The article went forward with a number of great examples of the non-product services provided by distributors in the electrical segment. Here’s the deal: Since Tom Reilly’s ground breaking book by the same title back in 1985, distributors have embraced the concept of Value-Added Selling. They have let their creative juices run wild with new and innovative ways to help customers. In the process they have further endeared their product offerings to customers throughout their territories. But we have a problem...