Distribution is at an inflection point, and industry executives are debating how to become more digital. We dig into three areas — sales transformation, marketplaces and pricing — to better understand how companies should proceed.
- Distributors have plenty of pain points when it comes to revamping their sales model, but Mark Dancer outlines three means for overcoming them.
- An “inside-out” sales model worked for Gustave A. Larson Co.; the company’s VP of sales and marketing, Matt Wisniewski, explains how.
- Colleen Stanley shows sales managers the right tactics and strategies they need to achieve better results.
The traditional sales model was being upended even before COVID-19 struck, but the last 18 months have proven that distributors need to transform how they market and sell their product lines if they hope to compete in the new economy.
In advance of MDM’s upcoming Sales GPS conference, Nov. 1-3 in Chicago, we spoke with three of the presenters for some tips on how companies can approach the changing landscape their sales teams now face.
Don’t copy. Create innovative sales models
Mark Dancer, CEO of B2B Innovation Network, says distributors are facing several pain points, but they have the means to navigate them by retooling their mindset, infrastructure and sales model.
Forging a new mindset means a distributor shouldn’t copy but rather work to create innovative ways to tackle the challenges ahead.
“Our mindset should be that we need to create an approach to sales that’s for distribution,” he says. “It’s not about accepting that we’re behind in terms of technology and e-commerce and we’re trying to catch up. It’s not copying what is done elsewhere. We need to think about how we can leap ahead. We need to think about our sales approach in terms of creating something for us. That should be our mindset.”
Distributors are often challenged to implement this type of mindset because they don’t have the infrastructure in place. Meanwhile, other industries are launching startups at blazing speeds because they have infrastructures that were built around founders, investors and forums.
“They know what the best qualities of a founder are,” Dancer says. “They have investors that provide seed capital and growth capital. And they have forums where they can openly express their ideas and theories amongst people in the industry and kick them around and then go compete like hell. We don’t have that.”
Last, Dancer says he believes distributors need to focus on creating their own sales models.
“Some people call it customer models, and some call it a growth model, but you need to think about this portion of your business model, which is how you generate revenue and profits,” he says. “You need to know what that is. People skip the sales model, and they go to a salesperson. You can’t do that. It’s wrong.”
Dancer says distributors should examine the capabilities that they need for a salesperson, customer service, marketing and support and other roles when creating their sales models. They can do so across three main areas: platform, creating a champion and delivery.
“Our sales model is a platform,” he says. “This idea is that a platform is about users. You’re enabling users to help users as opposed to ‘I am segmenting, targeting, positioning and selling users.’”
The second important shift for a distributor is to “create a champion within a customer’s business.”
The champion understands what a distributor can offer and will elevate the distributor-customer relationship in new ways.
“Using skills, experiences and metrics that you designed around that role, the champion role is a role that exists within the customer,” Dancer says. “This is a champion of your business that is not your employee. You can create, nurture and support a champion for your business. The champion’s job is to bring to bear all that you can do because as a distributor, we are very unlike Amazon. Amazon wants business on its terms. We are here to help.”
And yet a third area of focus for distributors is in delivery — what distributors can do before and after an order has been placed and delivered.
“This is the idea that the problem with focusing on e-commerce is that it focuses you on the transaction, the act at which an order is placed, and delivery is arranged,” Dancer says. “That happens in a nanosecond. Distributors do an awful lot of things before the transaction and after the transaction, and that’s where they create value. It could be technical support. It could be other things that distributors do, presale or post-sale.”
A case study for transformation
While the pandemic spurred many distributors to embrace or accelerate their digital transformations, Milwaukee, Wisconsin-based HVACR distributor Gustave A. Larson Co. was ahead of the game. The company started its internal migration for a hybrid sales model back in 2018.
Matt Wisniewski, vice president of sales and marketing for the Larson Co., says his company started exploring its “inside out” sales model three years to stay ahead of the curve, but it served the 85-year-old company well when the pandemic hit last year.
The Larson Co., which has 52 locations from the Midwest to the Mountain West, replaced its traditional wholesale distribution model with one that embraces omnichannel and a team sales concept. “It certainly has been an interesting 2021 trying to manage this change, which we’re still early in the early stages of,” says Wisniewski, who added that the company launched the new team sales model in April 2020.
“With a big change initiative or organizational structure change like this, our goal was that this structure would be part of our DNA in three years. When we launched it, it couldn’t have been better timing. Because when everything shut down last year, nobody wanted to see anybody.”
Before the pandemic, Wisniewski says his company had already invested in its infrastructure and secured the IT capabilities that it needed for people to be able to work remotely.
While the hybrid approach allows the company’s customers to check out pricing, availability and then ordering of products across websites using their phones or other devices, Wisniewski says some customers still want person-to-person interactions with the sales staff at branch locations. The Larson Co. is giving its customers across the various generations — from baby boomers to millennials to Generation X — the best of both worlds with its hybrid sales team.
“In the past, we had all of these salespeople out there doing all these different responsibilities,” he says. “What we’ve done now is started to look at it in terms of a team concept where we have business development managers that are out there, and their primary objective is to find new business. Then the traditional territory managers, those individuals now are paired with customer experience representatives, and one of them is taking all the inbound call activity, and one of them is executing on all the outbound initiatives.”
The goal, he says, is to provide the company’s customers with an exemplary experience “by putting the right people in the right seats, doing the right things and connecting with our customers, and maximizing opportunities and creating the best customer experience possible.”
Wisniewski says helping the company’s customers realize the deeper benefit of the inside-out sales approach has been the next phase of the transformation.
He adds that the company also is working on driving the benefits of its sales model transformation deeper within its customers. This should help some customers who reverted to their old ways of doing business with the company this year due to stress from the supply chain and labor shortage issues.
“What we’ve recognized is we’ve got to get deeper into the customer value stream to communicate this new change and how it benefits them,” he says. “What we’re doing is going back and kind of re-communicating to our customer base and engaging the next level of their organization and the level below that. We knew it was probably going to take us a few years before everybody that we interact with understood how we’re doing this and why we’re doing this for their benefit.”
Top tips for coaching sales teams
Sales managers are always in search of tactics and strategies to achieve better results, and Colleen Stanley has an important one for any business looking to transform its sales model. One, don’t confuse a deal review with deal coaching.
“Reviews are looking at the numbers and the analytics,” Stanley says. “Deal coaching is moving and improving the numbers, and that one should resonate because most of them are looking at selling in stages across the pipeline. They have the same conversations because they don’t know how to coach.”
Stanley says an invisible issue that needs to be addressed by sales managers is self-limiting belief systems. With self-limiting belief systems, a salesperson may be caught up in various negative mindsets.
Examples for self-limiting belief systems include: “I’m too young.” “I’m too old.” “Our prices are too high.” “I have the worst territory in the world.” “I don’t get enough support.”
“If a manager doesn’t know how to coach against a self-limiting belief system, he or she ends up throwing more training at a field performance challenge, and that is not going to change any sales behaviors or outcomes,” she says.
If a customer believes the company’s prices are too high, the sales manager needs to spend more time on pre-call planning with a salesperson on possible pivot responses when a customer complains about high prices.
Pre-briefing sales calls include more than that providing data or spreadsheets about customers. Sales managers need to pre-determine if the salesperson has the right skills and knowledge to manage an effective call.
“I teach the ‘what if’ game,” she says. “What if a new decision maker shows up to the meeting what will you say and do? What if the prospect won’t give you a budget? What if the prospect breaks the time agreement and says we’ve only got 15 minutes versus 45?
“What you’re doing is you as a sales manager is you are making sure that they have the skill set before the call, and not just debriefing it after.”
One of the biggest items for running effective group sales meetings is to make them training and development meetings and not operations meetings or complaint meetings, she says. CEOs and VPs of sales should work with HR departments on vetting sales candidates to make sure they can embrace a “learning culture.”
Stanley says sales managers are set up to fail if their HR departments hire employees that aren’t coachable and don’t have an appetite for learning. “I can be a great coach,” she says. “I cannot coach someone that doesn’t want to learn. I can’t coach somebody that’s not coachable.”
Stanley says CEOs and top executives can also be part of the problem if they aren’t checking the metrics for how many coaching sessions, pre-briefings or ride along the sales managers are conducting.
“They keep working on the wrong end of the problem,” Stanley says. “There needs to be a system in place for the sales manager because who’s measuring those metrics? Managers don’t get measured by those metrics. The [sales] numbers are off because they’re not doing the coaching metrics.”
In his new job, Buelow will oversee all of DSG’s sales and marketing functions across…
Fastenal reported daily sales for the month also were up 1.2%, but safety sales dropped…
Fastenal’s reported daily sales for the month also were down 3.2% versus a year ago…