Delivering for Best-in-Class Wholesaler-Distributors
November 27, 2018  |  ByJ. Michael Marks, NAW Institute for Distribution Excellence Fellow

Last month, I talked about how often outside sales reps should call on existing customers. The answer largely depends on two things: whether there is opportunity for increasing sales to that customer, and how often that customer wants to see a sales rep. Both of those factors are evolving along with our rapidly changing marketplace.

But while it may be a sound business decision to deploy your valuable outside sales team where they will have the most market-making impact, the issue here is greater than simply rescheduling or cutting back on sales calls.

It’s about distributors rethinking how they go to market. And it’s about putting technology such as e-commerce and CRM to work for you.

Because 90% of what customers buy is a product they have purchased from you previously, servicing those existing customers is primarily a matter of preserving that revenue stream, and making sure you don’t lose valued customers to ordering mix-ups or delivery snafus.

To expand share of wallet, put people in specialized positions and shift transactional work away from field sales reps. This will cut costs by reducing expensive sales calls. And you can free up your field salespeople to focus on what they should be doing: high-impact market-making.

The success of all this depends on effectively employing an evolved omnichannel model.

Technology can provide up-to-the-minute supply chain information, tracking inventory availability, order status and deliveries. Then, with that information, your inside salespeople, your product specialists and support staff can answer the phone, make sure orders are delivered on time and handle most day-to-day issues that come up.

When you link your computer system with your customer’s, ordering becomes automatic — something we call LOOP, or Lights Out Order Processing.

In this model, your sales reps will still be involved with their customers, not with recurrent calls, but with periodic visits, and as ready backup should an emergency arise.

And technology will benefit their sales efforts, too.

Technology can give you a snapshot of what customers are spending and where — and it can give your outside sales team the information they need to decide whom to prospect, and where to invest their valuable time.

Of course, many sales reps will be reluctant to give up all that customer contact. You may encounter initial resistance, and even turnover, because salespeople will resist what they may perceive as giving up accounts. And those who were comfortable being order-takers will balk at the idea of going out and calling on somebody who is not a customer.

But you’ll also find that some veteran members of the sales team will be energized by the change and will transform into killer sales producers. Those are the field sales reps who will be intercepting those critical sales events and turning them into revenue for your company.

When e-commerce and other technologies combine with a restructuring and rethinking of sales roles, you’ll cut costs and your business will master this changing market.

To learn more about Mike’s approach to value creation in distribution, read his NAW-published books: What’s Your Plan? Smart Salesforce Compensation in Wholesale Distribution, Working at Cross-Purposes: How Distributors and Manufacturers Can Manage Conflict Successfully and Value Creation Strategies for Wholesaler-Distributors. You can also reach Mike by visiting ircg.com.

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J. Michael Marks, NAW Institute for Distribution Excellence Fellow
J. Michael Marks, NAW Institute for Distribution Excellence Fellow J. Michael Marks is Managing Partner of Indian River Consulting Group (IRCG). He became a NAW Institute for Distribution Excellence Fellow in 2002. IRCG is an experience-driven firm that continues to focus on the wholesale distribution channel. Prior to forming IRCG, Mike held the position of Executive Vice President at Lex Electronics, a vertically integrated electronics distributor. Prior to that, he was Director of Corporate Training and Development at Ducommon Inc., an industrial distribution company.
J. Michael Marks, NAW Institute for Distribution Excellence Fellow

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