Delivering for Best-in-Class Wholesaler-Distributors
April 1, 2021  |  ByJ. Michael Marks, NAW Institute for Distribution Excellence Fellow

The field sales rep is as American as baseball. But the traditional role of the B2B field sales rep was on a steady decline even before the pandemic, as we have lost roughly 25% of the B2B field sales jobs since 2015.

In the wake of COVID-19, with tighter budgets and a spike in e-commerce use, transforming bloated market-serving sales teams into a lean market-making force has become even more vital to distributors’ survival.

Our research shows that more than 80% of distributors’ sales to existing customers are merely repurchases of products they had been sold before. They were sold the first time but bought thereafter. Meaning, highly specialized — and highly paid — field sales resources are busy doing recurring lower-value tasks that could be performed by others. The big shift for the industry’s leaders in innovation is carving out many of the market-serving activities from their field reps. The offloaded tasks can be accomplished at lower costs and also utilize evolving new digital tools. The market-serving goal is to maximize customer retention and share of wallet at the minimal cost-to-serve.

The time that is freed up in the sales force is reinvested in market-making activity. This is disrupting the supply chains of the customers of our competitors. This is using the field sales force offensively, rather than defensively.

Ask the following questions about your current sales model:

  • What is the difference between a sale and a transaction?
  • Does our current sales structure reflect how customers are actually buying products?
  • Are costly resources being wasted with outside field sales reps ultimately performing customer service tasks instead of initiating new business?

Honest answers may bring up the need for painful changes. Stepping outside your echo chamber and challenging long-held beliefs is never easy, but it will mean the difference between playing to win and playing not to lose.

A Lean Mean Sales Force Machine

Research shows that many customers complete their purchasing evaluation before they ever reach out to a sales rep, and that customers value the inside sales function higher than outside sales. So, what does this mean for the outside field sales model in 2021?

Specialize your reps.

Field sales reps are an expensive resource for the company because the work they do should generate the most value. Instead of assigning reps a set of customers to serve indefinitely, reps should be doing deep work with a wide variety of valuable accounts.

When reps are no longer saddled with managing quotes and generic customer service concerns, they can conduct needs analysis for customers, document real customer cost savings and disrupt old-school reps by winning over their customers. These are marketing-making activities.

Separate market-making activities from market-serving activities.

Company leaders need to shift toward actively managing their field sales reps, directing them toward new business development and demand creation. It’s the CEO’s job to protect their highly specialized outside sales reps from getting trapped in market-serving activities by developing robust teams of inside customer service reps, inbound and outbound telephone sales, product specialists and quotation departments.

Effective market-serving teams free up the sales rep to target high-potential opportunities, and an effective marketing department can help identify growth opportunities for reps. Instead of adding more reps to create value, prioritize new competencies in line with new market expectations.

Segment customers.

Everyone is doing more with less these days. It’s imperative to look at the data and understand what customers are actually buying versus what distributors think they’re selling. Effective sales models don’t offer the same level of service to everyone — specialized field sales reps can meet customers where they are.

Some customers always have price as their bottom line; other customers value extended credit terms above all else. Segmenting customers based on their buying patterns and what drives them allows distributors to align selling resources so that customers’ needs are met at the lowest possible cost.

Mastering this more agile sales force structure will take some time but leveraging data to realign resources to better meet customer needs is a foundational step forward in creating true competitive advantage in today’s “New Normal” market.

With digital disruption, remote working and changing buying patterns, the role of the traditional field sales rep was already falling out of fashion. COVID-19 just gave old-school sales approaches a definitive nudge. No more playing catch-up. Distributors who meet today’s market with a savvy elite sales force supported by a robust inside sales team are poised for a brighter 2021.

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

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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.

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