Bill Wade


Tough Market Distributor Sales Strategy is Simple - Execute

By Bill Wade

Last week, I had the opportunity to participate in the annual Service Specialists Association (SSA) annual convention. The leading subject of conversation among both shops and suppliers - what kind of strategy works best in a tough economic market?

This is a great question, but I’m not sure that the answer is a strategic shift. I’m thinking that a relatively simple shift in tactics might just do the trick. That is, many heavy duty parts and service businesses have developed perfectly sensible plans for their individual situations. Now is the time to concentrate on execution of those plans.

And this intensified effort has to have only one focus … your customers. Since selling existing products to existing customers has a payoff 15 times bigger than anything else, we’re talking about a customer focus unlike anything else you’ve ever done.

Don’t forget the basics. Your attitude determines your success of failure. Many individuals and companies are starting to become depressed because of the economic headlines. You need to give everyone in your operation a good dousing with common sense and motivation. Success in every market is totally dependant on attitude. This is even more the case in tough markets.

If you want to fail, get a negative attitude (pretty much guarantees you failure). Customers buy on emotion and you’ll never create emotion by simply going through the motions. Work on staying upbeat and positive. Truck operators have enough doom and gloom thrown at them from the media and their customers; they don’t want it from you too!

Most salespeople do not spend enough time thinking about the quality of the relationships that they hold with their clients. There are many aspects of your relationship with your customers. Spending time strengthening and improving those relationships will encourage loyalty, openness and partnership in all markets … not just tough ones.

Think about the various aspects of your relationships with individual clients (for example the awareness they have of your company, how they view your business, how they view you, your personal relationship, your business conversations) and devise a plan of action for improving and strengthening those.

In a downturn clients want reassurance that they are working with the best, that their suppliers are thriving and that their supply lines are rock solid. Take some time out to plan which clients of yours would benefit from a face to face visit, a lunch or a coffee and make that call!

Additionally, innovate now. The only planning choices in a slow growth market featuring capacity and technology driven price pressures are to either cut prices or to innovate with technology solutions. Since "excess capital" will continue to be scarce, focus on smaller but more frequent innovations. Help all employees be part of the solutions for productivity, profitability and balance sheet liquidity improvement.

Here are a couple suggestions from Bruce Merrifield as well:

Identify and deal with big-volume, high trade credit customers for which margins are thin, profits are non-existent and the customers themselves are bankruptcy candidates.

Buy some commodity inventory in smaller quantities, when possible, to increase turns and fill rates more than the gross margin drops from paying a higher price.

Reduce distribution capacity on a local market basis.

Distribution guru Tom Gale summarized today’s situation perfectly with a warning about duplicating some of the recent Wall Street gaffs:

"This is a trench time for most managers as the numbers aren't coming up as hoped for. There is a lot of discounting going on to get market share or playing customer games to get the business. That's both ironic and dangerous when a primary concern across the channel is maintaining profit margins. It may be a strategic necessity to discount with one or two key, high-potential customers, but it can suck the life out of your profit margins and take years to repair the damage."

Rule One: Don’t ever let business just happen. Get involved and take control. Lou Holtz said it best … “He who complains about the way the ball bounces is often the guy who dropped it.”

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