In the last six months or so since we entered the pandemic, companies have been taking time to think critically about their business practices and changing value propositions. In a presentation during MDM’s recent Virtual Sales GPS 2020 conference, Mike Marks of Indian River Consulting Group reflected on the importance of such evaluations, but also noted distributors can unintentionally slow down sales transformation efforts in the process.
The managing partner at IRCG addressed historical assumptions about distribution that can often hold distributors back. For example, Marks said, many distributors still believe that if they take a field salesperson out of a territory, their business volume will then disappear with the person. However, IRCG’s research shows that 80% to 98% of the products a distributor sells to a customer are products that customer has purchased from the distributor before. The customer will likely reorder whether that salesperson is there or not.
“If you’re in the construction business and your field sales people are involved with [a customer that has a] 90% repurchase rate, and they’re fundamentally doing project management services, you could probably cut your costs a lot and actually hire professional project managers to manage those customers — and the customer can have a better experience,” Marks said.
Examine Your Assumptions
Other false assumptions that distributors use to make operating decisions include:
- If a sales rep does a good job with an account, it will be theirs forever.
- If they are in the office, then they are not selling.
- Their performance appraisal is their paycheck.
- Field sales reps are money motivated.
- I incent them on GP, so they get as much as they can.
- As long as he is heading that way, he can deliver the product.
- Discussions around prospecting are uncomfortable and often unproductive.
“There’s pretty solid data right now that says these are in fact not true,” Marks said. “So, if you’re trying to talk about a sales transformation, it’s very important that you examine all of your own assumptions in terms of what you’re doing. And make sure that you don’t make decisions on assumptions that technically and substantively aren’t correct.”
In order to avoid poor outcomes, Marks shared some sales transformation models that are working for distributors in today’s environment. You can access the complete presentation by joining MDM’s Sales GPS Network. But you don’t have to wait for the next information-packed event. Happening today: MDM is providing a free preview of the benefits you’ll receive by joining the network. Join our Sales GPS Network October webcast this afternoon at 2 p.m. EDT for a live sales transformation discussion! Register for free here.