Archive for December, 2011

Value-Added Distribution Services That Strengthen Customer Relations. Guest Post by Derek Singleton


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Value-Added Distribution Services That Strengthen Customer Relations

Guest Post by Derek Singleton

Derek approached me after I reposted some of his very good content on adding value. After reading this, head over to his website and see his other good advice.  Reg

Distributors always have a host of pressures to contend with. For instance, the industry is constantly grappling with fierce competition and rising fuel prices. Under these conditions, it’s becoming more important than ever to maintain customer relationships. Like other industries, one of the ways that distributors can strengthen their customer relationships is by offering value-added services.

But what services should distributors offer? Customers have a whole laundry list of services they’d like to see added. These services range from providing consultations to managing customer inventory. Of course, distributors can’t provide all of these services. They have to pick and choose which they’ll provide. I’d like to highlight three value-added services the industry should consider providing their customers.

1. Vendor Managed Inventory

Vendor managed inventory (VMI) is a concept first popularized by Walmart. Under a VMI system, the distributor assumes responsibility for keeping their customer’s inventory levels stocked at optimal levels. While this is a complex undertaking, advancements in web-based software and mobile capabilities are making it easier to manage inventory on a customer’s behalf. As an example, a distributor at their customer’s location can access their their software with their smart phone and initiate a new purchase order to restock inventory levels.

2. Delayed Product Assembly

Distributors that work with manufacturers have an opportunity to increase customer satisfaction by delaying product assembly. Distributors get great discounts by purchasing component parts in bulk and assembling the product as orders come in. However,  managing product assembly can be tricky. To effectively manage delayed assembly, distributors should rely on the bill of materials (BOM) functionality in their wholesale distribution software. A bill of materials allows distributors to track the components parts, item numbers and proper packaging specification to ensure that final assembly is done correctly.

3. Improve e-Commerce Support

In the digital age, more and more retail are operations are asking distributors for help in fulfilling online orders. Supporting online sales distributors shifts the traditional dynamic of distribution operations by shortening delivery times and increasing the number of shipments. To handle the demand of fulfilling online sales, distributors need to focus on integrating their system with their customer’s. This allows distributors to receive orders instantaneously and to pick, pack and ship these orders in the most efficient way possible. Of course, it’s also possible to fulfill online orders through manual methods but these have a large efficiency gap compared to automated systems.

These are just a few of my ideas on how distributors can improve their customer relationships. If you’d like to see an expanded list of value-added services, please visit the Software Advice website to view the original article at: How Distributors Can Improve Relationships with Value-Added Services.

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Bottom-Line Selling. The sale’s professional’s guide to improving customer profits.  Jack Malcolm.  2011. Second Edition. ISBN 9781935961321. This was first published in 1999, but the story is is even more true today as then. If you want to sell in value, you need to prove it to  the client using their data. To be more than a discount salesperson this is the type of book you must devour on your way to the top 5%.

A long time ago I built and used a presentation,  “What Your  CFO Can Teach Your Sales Team”. In it I laid out the various simple quick ratios a salesman can use to analyze a prospects annual reports to see if they would qualify for terms, their profits and where they came  from , growth rates, and several others.

Malcolm’s book goes much further than that PowerPoint of mine in a a very readable and digestible manner.  Any solution seller will recognize the terms used and also learn many more.  I always ask clients, “Do your salespeople  deserve to take the client meeting?  Have they done their homework.? “  Malcolm’s book has the right kind of homework here for all the value sellers. Excellent revision and a valuable addition to any sales managers/salesman’s library.

Paul McCord does a terrific review of this very valuable book.  See http://salesandmanagementblog.com/2011/12/05/book-review-bottom-line-selling-by-jack-malcolm/

The Management Mythbuster. David A.J. Axson

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The Management Mythbuster. David A.J. Axson. 2010. ISBN 9780470463628. How can such an absolutely true book be so funny? from the Introduction with such titles as Strategic Plans are of Little Use in Times of great Uncertainty and Volatility through to the end with Isolating Management Stupidity.   Those of us with a bit of grey hair have lived through many of these myths and the mistakes.  In our practise we often meet companies that are growing at what looks like very decent numbers. How ever when you compare these numbers with the superior gains competitors are able to post you realize that the company is losing ground and not is unaware of it. This delusion is way too prevalent in High tech companies.  Thus we a look at  compensation metrics which reward outperforming the competitors in all types of markets and conditions.  This is one key to helping  prevent overpaying senior executives.   The book should be on every business school reading list as well as that of  all shareholders.  Execs of all types would do well to read this book.   A great read.

Zero-Time Selling. 10 Essential steps to accelerate every company’s sales. Andy Paul

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Zero-Time Selling. 10 Essential steps to accelerate every company’s sales. Andy Paul. 2012. ISBN 9781614480501. This short (168 pp) tightly written book punches way above its weight class.  The 10 steps are simple, obvious and elegant. It relates very well to changes we are seeing in the marketplace, changes that negatively impact technology sales.

Why change?  Here is his comment on the buyer’s life today.

Customer firms are no different from any other business.  Most productivity gains are due to people being pushed to work harder , to increase their output within the same number of hours.   If buyers are stretched thin like everyone else, then it stands to reason that one good avenue for creating value for the customer through the selling process is to reduce the time he needs to spend assembling the information required to make a fully informed decision.”

As a salesperson, do you deserve to be in front of the buyer? Have you done your homework on his industry and his needs plus do you have the product knowledge to answer the most important of their questions immediately?

To make Zero-Time work ( and this is not a quick fix ) sales managers need to be able to measure that:

  • 100% of leads are being followed up
  • lead follow up time is meeting your set time goals (30 minutes? )
  • the salesperson is answering the buyers needs/questions without extra follow-ups?
  • weekly reviews with ea salesperson show that:
  • they are tossing the losers from their pipeline and
  • selling  the proper solution to the people that need it. (Often this is the researcher/user, not the payer who is  waiting for the users approval/research results.)

This book is recommended to sales people and their managers who want to step up their game in response to the changing selling situations.  One cautionary note to sales managers.  The Sales Lead Black Hole research indicated that the more seasoned/mature salesperson can be expected to react negatively to extra manager attention to lead follow-up. See below. (full post)

We also find that as sales reps become more experienced, they are less likely to:

  1. pursue marketing-generated leads,
  2. respond positively to managerial tracking of marketing lead follow-up, or
  3. respond positively to greater marketing-generated lead volume.

Thus implementing a change to your program means more than a Jean Luc Picard “Make it So” .

You will need to think this through and work together with your star performers first.