The 2020 Mid-Year Economic Update_long

Distributors Will Determine Their Own Fate

As we enter the season for retrospection and planning for the coming year, there were two sessions at the recent Power Transmission Distributors Associations Industry Summit that hit on both of these activities in simple terms that, when acted upon, can put distributors in a stronger position heading into 2020.
Managers walking through large warehouse controlling goods distr

As we enter the season for retrospection and planning for the coming year, there were two sessions at the recent Power Transmission Distributors Association’s Industry Summit that hit on both of these activities in simple terms that, when acted upon, can put distributors in a stronger position heading into 2020. 

The first was a presentation from marketing consultant Ron Karr, where he encouraged attendees to embrace a velocity mindset in their sales process. Meaning, to move forward with speed, but speed that has a set direction. Otherwise, that haste will only produce burnout. 

Karr had several practical tips to improve the sales process, starting with acknowledging the need for daily reinvention in order to remain relevant to customers. He urged sales representatives to remember that customers value the counsel of a partner who will help them to make the right decision versus someone who just talks at them about product offerings. “No one wants to be sold to today … but people value leaders,” he said.

Distributors need to train their customers to buy from them, Karr said. By focusing on purpose versus task, distributors can rethink routine processes like requests for proposals. The RFP inherently leads with price. Rather than wasting time with what he called senseless proposals, he suggested taking the opportunity to do things differently by being onsite with the customer, asking them focused questions about their business pain points and what success would look like to them. 

Any time a customer is called upon — even if it’s a scheduled, planned call — it is a disruption to that customer. Simply acknowledging this fact helps the salesperson to lead with the heart (an emotional connection focused on outcomes for the client) over the mind (a products and services focus), Karr said.

Accepting the role of leader means creating a safe environment for the people we want to work with. To drive home this point, Karr addressed the psychology of selling. Interacting with people triggers three types of hormones: cortisol (stress), oxytocin (trust and connection) and dopamine (feel good). Salespeople can work with these forces, rather than against them, by using customer-focused talk that is purpose-oriented and outcome-based. 

From a forward-looking perspective, economist Alan Beaulieu encouraged PTDA attendees to think a half business cycle ahead. He predicts a mild 1.2% downturn in the first half of 2020, with a stronger recession in 2022, but added that such a downturn will likely take place no matter who wins the next presidential election. Statistically, past recessions have not correlated with whether a Republican or Democrat was in the White House, he said. “What counts is you,” Beaulieu said, adding, “Companies that prep for a recession pull ahead during and after it.”

He urged distributors to plan for a slowdown, using 2020 to “grab all you need out of 2021” before a more significant economic event. Ask yourself, what can be done to improve efficiencies to keep money in the business? As we work on our editorial calendar for 2020, this is a chief focus for MDM as well. 

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