In this industry, sales cycles can be long and good salespeople aren’t cheap. You put a lot on the line every time you approach a new prospect. To avoid the common trap of taking just any new business that comes your way, follow this approach to target the right business and win them over for life.
1. Know your business.
Labor makes up more than half of most distributors’ costs, with a significant portion of that allocated to outside sales. If you send that valuable resource after any prospect with a pulse, you will dilute your sales effort.
Instead, take a data-based approach to identify, target and convert new business that you know you are capable of backing, stacking the deck in your favor from the start. Make sure that you intimately understand the following:
- Your value proposition
- The customers that your value proposition resonates with
- The profile of those customers
This data should be built over time in a CRM system based on your team’s experience in the field and publicly available data. Ideally, the sales team and leadership would collaborate to determine where the overall data is pointing.
2. Identify targets.
Now that you’ve identified the customer types and categories that you excel at, take this knowledge and map it forward: Who should you target for new business? Consider size, what they produce, the systems they use, their ownership and other variables when building that profile. Think beyond just SIC/NAICS.
Identifying target accounts should be a strategic and intentional decision. Think of it as a recipe for how you go to market. Which potential customers line up with the value proposition and capabilities you bring to bear?
3. Take a collaborative approach.
Once you’ve identified a target account, don’t rush in with just your outside sales team. A successful growth strategy requires that you do your homework, and do so collaboratively. Just as you need to involve your entire team in customer retention, they need to be involved in acquiring new business.
How do you get your foot in the door, and how do you attract the prospect’s interest? This is where collaboration with the marketing department becomes critical. The marketing team can help you show how you’ve benefited similar customers with significant cost savings or other benefits, and provide you with a hook that convinces the decision-maker that it’s worth it to them to go through the brain damage of evaluating you. After all, they’re not just sitting around waiting for your sales call, P.O. in hand.
You should also get your operations, finance, customer service and other departments involved early in the sales process to identify a service or design a solution to position you to successfully and sustainably take over that business. For example, let’s say that the potential customer is unhappy with their current supplier, who installed vending machines but has done a horrible job of servicing them. Bringing your customer service and operations leads in on the effort early in the process to design a solution gives you time to ensure and show that you can actually solve this customer’s problem.
Having the finance team double-check the customer’s ability to pay is also a good idea and will help you avoid wasted time. And bringing in the operations team can help you confirm that you sell the right lines, determine whether you have the required inventory in stock and ensure that the lead time on the solution you’re proposing will work for the customer.
Consider all the variables, including technology questions this customer might ask during the initial sales call. If the customer asks to see how you can digitally interface between your platform and theirs, for example, you need to be ready to show that. Or they might ask how they can order one-offs or unique items on the website. If you don’t have those capabilities, but they are important to that customer, you’re out of luck.
Thanks to growing transparency, the customer probably already knows what the market price is for your products. But that doesn’t mean you shouldn’t be ready to talk about it; if you're higher, be ready to articulate how your superior value proposition outweighs that difference.
4. When it’s time to close, bring out the big guns.
As outlined above, there are a lot of things to button up before you can move to closing. Even if you’ve done a great job up to this point, you still have to actually convert the business. And this means much more than just collecting a P.O.; it means putting your brand on the line, saying: "We're going to do this, and we're going to do it right. We’re going to get you the result that we're committing to."
You have to prove that you've done all the homework, and ultimately convince them that the onboarding process is going be seamless so that they won’t be left regretting their decision. To a certain degree, this requires a different talent set than simply going out and banging on doors, so consider bringing in a senior salesperson, sales leader or even the owner to help close.
5. Don’t stop when the sale is done.
Once you close the business, move into onboarding and delivering right away. If you don’t move right into customer-retention mode, you could lose the customer for life. The minute you win is not the time to go have champagne and move on. Celebrate, but ready yourself for the task of hanging on tight to this hard-won business.
Larry Davis is CEO of AgoNow, a Tulsa, OK-based pure industrial master wholesaler and channel solutions provider. Learn more about AgoNow at agonow.com. Before co-founding AgoNow, Davis served as the executive vice president and chief commercial officer of Stellar Industrial Supply, an industrial distributor based in Tacoma, WA, and as president of ORS Nasco, Tulsa, OK.