In April 2015, Forrester Research estimated that one million B2B reps would be toast by 2020 due to digital disruption. They solidified this forecast in a subsequent March 2017 report. The findings were perhaps hyped in order to sell reports, but they are still a helpful warning to undertake an actionable assessment of your reps’ readiness for cloud commerce in 2020 and beyond.
How? Consider viewing your reps through the following analytical lenses to create questions for further investigation. Continue reading 106. Customer-Centric Sales Force Reinvention
The Present Facts
Amazon (AMZ) is building out the first value channel from end-users back to factories. And of course, this channel is a cloud-based digital channel. The customer-centric channel is comprised of 10+ intersecting, reinforcing, winner-take-all platforms starting with the 60MM Prime members in the U.S. (100MM+ worldwide). This monopoly capability will allow AMZ to sell into, and/or collect fees from, all verticals that sell anything to Prime members.
This cloud-based value channel has breakthrough advantages over legacy, product-push channel players. Hence, there is insane loyalty from Prime members and astronomical sales growth. Continue reading 104. Innovation Two-Step: Core Renewal and a Cloud-Based Value-Channel
This is one of the first insights that distributors who subscribe to Line-Item Profit Analytics are shocked to find out. Analytics reveal that:
- Naturally high-margin percent SKUs and customers are mostly net-profit dollar losers
- Gross profit dollars on small-dollar lines and orders are less than their cost-to-serve dollars
You can’t ignore small transaction size, or the variable service-people costs for customers with bill-me-later, paper-based trade credit. Continue reading 102. High-Margin Counter Sales Aren’t Profitable!
Imagine a distributor that has 10 outside Reps making 4.5 calls per day at an all-in cost per call exceeding $100. They must believe that the costs of these rep calls are worth the benefits. So, what cluster of beliefs guides those daily bets that add up to over $4500?
What beliefs lie behind your rep call cost bets?
Here are two belief clusters that serve as poles on a continuum. Where do your beliefs fall?
We’re supply-chain value creators
- All our reps are certifiably excellent at knowing which are the highest net-profit potential accounts
- All our reps plan and proactively pitch (with team help) the best, win-win solutions to these accounts that deliver a one-stop shop array of SKUs throughout a customer’s business and are executed with perfect, basic service metrics tuned to the customer’s needs
- These solutions lower the total procurement cost of the customer’s replenishment process, while boosting their uptime productivity using our goods and lowering our cost-to-serve expense as a percent of sales
- We also take care of all (new) product knowledge needs customers may have
- Our goal is to secure a bigger, win-win share of spend, if not a 100% partnership
- When we partner with the best growing customers, they grow us
- Our sales (and rebates) grow faster than industry averages due to customer-centric, service-value innovations for replenishment of commodities (which now comprise 90% of our sales)
We maximize “relationship value” to get economies of sales
- Our “good” reps make just-in-case, regular calls to befriend customers and react to their needs (often economic concession demands)
- More reps secure more active accounts
- Our goals are to push products to more accounts to grow sales, margin dollars and rebates.
- With all operational costs (seemingly) fixed in the moment, incremental GP-dollars will flow increasingly to the bottom line. These profits will hopefully grow faster than sales. (But, they haven’t!)
Relationship beliefs stopped working long ago
Financial survey data shows years of low returns for 90% of distributor participants. Isn’t it time to update your beliefs and analytics to improve your odds for better returns on your rep-call bets?
Business is like poker. You can’t have perfect information or consistent good luck. The winners are statistically a few percent better at deciding when to fold or hold; and at winning the hands they play.
Focus your best people-talent bets on creating more value for your biggest net-profit growth potential customers. Customer/SKU profitability analytics will upgrade your beliefs and improve your betting odds.
How? Contact me for a free, desktop session.
Your brand statement encompasses your company’s beliefs about your competitive edge. It’s your company mantra. Many distributors proclaim something like, “Our good people deliver good service”. But, most companies don’t have measurable, customer-centric service excellence that could help them earn a dominant share of accounts, have the firmest prices, or become first-choice for supply chain partnerships. Why not retune your brand?
What’s your path to powering your brand with service excellence? So, if you have a big warehouse in a warehouse district and an outside sales force, your future has been here in other channels for some time.
Your Future in a New Service Promise
A promise should be an IF, THEN statement. Most of all, IF your customer buys all they can from you, THEN you will: Continue reading 67. Distributors, Retune Your Brand and Find Your Partners
Do you want to hire the best employees and keep them stoked? Here’s a successful distributor’s thinking and how to put a service-triage-program in place:
- Best employees (like thoroughbreds) cost more upfront. And, they want a career growth path.
- But, raises and profits to reinvest into growth must both come from growing Gross Margin Dollars (GM$s) per Full-Time Equivalent Employee (FTEEs).
- So, freeze headcount and trade low, unprofitable, GM$/service-hour, accounts for high GM$/hour accounts.
- How? Give your 5 most profitable and 5 most potentially profitable accounts much better service.
- Every employee memorizes ten biggest (potential) profit accounts.
- Ideas are listed and play-acted for diplomatically giving “the Big 10” line-cutting service at the inconvenience to unprofitable “minnow accounts”.
- Service goals for the Big 10: they will never be handed off to another employee with any delay or fumbles. They will get: faster, perfect and more-creatively, thorough service.
- Give everyone customer profitability information and trend reports for both GM$s/FTEE and Profit$s/FTEE. If Profit$s/FTEE clears a target, then gainsharing bonuses accrue for all.
All inside sales people were busy. #2 Target Account calls. The “overflow person” enthusiastically tells #2 to: “Wait just one second”. Then yells: “Can anyone Triage for #2?”
Tony is talking to “Micro-Plankton Man” (MPM). In mid-speech, he hits the blinking button to work with #2 for more than an hour. #2 needs some product specs, pricing and a shipping date – for a potential factory direct order. Tony walks the call over to purchasing. The team (using the speaker phone) calls the factory to get all needed information in record time.
#2 then quotes their customer and wins by being the first-back bid. Tony and associates then collaborate with #2’s folks to create a “Speed Quoting Wins” process.
#2 then wins more business with faster quoting. Their purchases grow from $30K to $500K with profits rising from 3 to 6% of sales. MPM’s sales, meanwhile, go from small at a loss to zero. He switched to a competitor when assigned to a new service model and terms that would have made him profitable.
The team needed MPM’s service activity and more to reinvest into #2’s booming activity without adding people. GM$/FTEE doubled; Profit$s/FTEE quintupled; and gainsharing bonuses and reinvested profits/FTEE happened.
Will you lose key accounts and gain more minnows? Or, get Waypoint Analytics first to hit competitors both high and low?