• Distributors are shifting their focus on the traditional inside sales team model to create an approach that better supports customers across e-commerce websites.
• A hybrid sales model can include dividing up the responsibilities that were once under the sole domain of outside sales to better serve the changing needs of customers and prospective customers alike.
• Some customers still prefer to do business with an in-person handshake approach, while younger generations want and expect to receive a more hands-off, Amazon-like self-serve experience from distributors.
Distributors’ traditional outside salesforces this year were hit with the double whammy of increased electronic sales on e-commerce sites as well as the surging COVID-19 Delta variant that has kept some of them away from face-to-face appointments.
Looking toward 2022, distributors plan to focus more on inside sales team models to better support their customers across their e-commerce websites, according to MDM’s 2022 Trends survey results.
More than 100 distributors, manufacturers and service providers took MDM 2022 Trends survey online, providing an insight into where the industry is headed next year.
Key takeaways include distributors incentivizing both sales staff and customers to purchase products through e-commerce sites. For example, a sales rep receives a bonus for pushing a sale to the e-commerce site, while customers are offered discounts for going digital. Also, inside sales staff who work remotely can be located outside of their employer’s existing footprint, which helps the company expand geographically.
Andrew Dun, president of Amerisafe Group, says his company’s evolving sales model is moving away from a “pure reliance on external sales representatives to more online marketing and more remote selling tools.”
“I think a greater share of sales, and improved website, SEO and other factors like that are moving to marketplaces and into online sales,” Dun says.
The hybrid sales approach includes dividing up responsibilities that were once under the outside sales domain. Business development managers can focus on finding new business. Traditional territory managers are paired with customer experience representatives so that one handles all inbound call activity while the other executes on outbound initiatives.
With the supply chain shortage, Mike Marks, managing partner, Indian River Consulting Group, says distributors’ salespeople are faced with selling non-stock items to their customers. As such, distributors are doing a lot of innovating with their salesforces to meet the ongoing challenges across the supply chains and the labor shortage.
Technology’s impact on sales
While e-commerce has reshaped how distributors approach sales, technology — such as customer relationship management and data analytics — is putting more pertinent customer information at their salesforce’s fingertips.
Mallory’s Andy Mitchell, vice president of sourcing and supplier relations, says his company is deep in the process of updating its CRM software. Once the upgrade is completed, Mitchell says the CRM will provide Mallory with automated marketing capabilities that will allow it to push its product marketing into specific customer segments or geographic areas.
Over the past few months, Mallory has seen some of its sales team struggle with account management and keeping track of cost savings opportunities, despite previous training.
“We’re hoping with the CRM package, we can better manage and then train that staff to better expectations,” Mallory says. “But I think the entire industrial sales channel is undergoing evaluation of what value salespeople bring.
“I think a lot of companies are evaluating the sales process and finding out where are we really getting benefits from the investment.”
Conducting sales business with a handshake at a branch office still has place for some distributors, thanks to long-held customer preferences. However, younger generations want an Amazon-like experience for ordering, tracking and invoicing products online.
The result, for some distributors, is a hybrid salesforce that still maintains an outside sales staff for face-to-face meetings with customers while also enabling digital tools for inside sales teams as they work with their IT departments.
The digital approach allows customers to check out pricing, availability and ordering of products across websites using their phones or other devices. Having a two-headed sales model may not be feasible for small- to medium-sized distributors that aren’t relying on e-commerce sales.
“I think we will continue to see growth in e-commerce and electronic transactions,” says Ted Stark, division general manager, Dalco, a division of Imperial Dade. “For us, I don’t think it will totally replace the face-to-face sales because we do a lot of consulting and training as part of our sales process.”
In his response to the survey, Scott Bebenek, vice president, Industrial Buying Group, says one of his goals for 2022 is expanding IBC’s sales team to build revenue over the next 12 months. Bebenek says independent distributors have one advantage over large distributors when it comes to sales staff. While a smaller distributor might only have seven sales reps, “those seven reps have been with the company is 18 years or 22 years,” he says.
Expanding the sales footprint
Penn Hoyt, vice president of operations and Marketing at LMT Imports, says his company is looking to expand its salesforce as it sells more of its rustic pine furniture in new markets in the South. Penn says LBT worked on expanding its footprint prior to the pandemic, and then COVID-19 accelerated that expansion.
In his survey response, Hoyt says his company is expanding its sales team to build revenue over the next 12 months while also looking to move into new geographic areas.
LBT has primarily offered its furniture in the Southwest from its warehouse in Grand Prairie, Texas. The pandemic led companies in the South to contact LBT because they haven’t been able to get furniture from their regular suppliers. This also led to LBT offering more upscale furniture.
“What we’re seeing is, retailers out toward Florida, Georgia, Alabama, Tennessee — those areas that we normally would not really sell to — have now started contacting us saying, ‘Hey, we don’t have any suppliers anymore. We want to start buying from you,’” Hoyt says. “The issue in the past was the shipping cost was not going to be inexpensive, but now they’re saying, ‘We don’t care, we can’t get the goods.’
“Our reps are able to say, ‘Hey, look, this is going to help attract another level of customer for you, who spends more money. And, when they’re spending more money, that’s good for you.’ It’s bigger margins for us, as well.”
Defining digital marketing strategies
Michael Butera, director, digital marketing for Steiner Electric Company, says his company recorded more online transactions in 2021 that also add greater average order value.
Butera says the company’s marketing team now works closely with the IT team and e-catalog team that manage product data and marketing channels. Those marketing efforts include email, social media, SEO, paid search, text ads and shopping ads with companies such as Microsoft’s Bing and Google. For digital marketing, Butera says it’s important to have the same marketing campaigns across all the channels.
“It’s not just digital. We’re conveying the same message through all our channels,” he says. “So, creating the collateral [material] that our sales team is going to use. If a customer were to go online and they see some kind of promotion when they talk to our sales reps, they’re going to hear that same message.”
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