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
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!
“Distribution Strategy” is a mature 50-year old. But, 90% of distributor’s (that do financial performance surveys) need some Strategy homework. Their 15-year-average grade is 7% Return on Total Assets while the top 5% have been scoring 22%+. What strategic wisdom are the Distribution Strategy Nerds following?
IMITATE THEIR STRATEGY GUIDELINES
Actually, don’t imitate anyone’s strategy. Their competitive soup and strengths aren’t yours. But, do imitate guidelines that generally work for distribution channels. Like:
- The power — in mature, consolidating channels in which 90% of sales are on commodities in global, excess supply — has shifted to the larger, growing/consolidator end-customers. So:
- Partner and retain these customers better than your competitors to grow faster and more profitably. (Do all employees know your top 10 customers by heart?)
- What do these customers want? More supply-chain value and/or lower cost solutions. (Get/learn: Line Item Profit Analytics (LIPA) and Cost-To-Serve (CTS) Math to sell them what they want.)
- Don’t service all customers with the same standard service model and experience. You will over-serve 50% of your smallest accounts and under-serve 5% of your biggest, profit (potential) accounts.
- Shift your service-people, activity time and costs to be proportional to each customer’s profit potential (the reverse of #2). Then, eat competitors doing #2.
- Service-value metrics vary with the needs of each customer niche. And, bundled or unbundled services with the product prices depends upon customer volume and average order size.
- Tiny customers pay for most services a la carte.
- Big accounts can get “extra services for free” if they meet some target Sales and Sales per order.
- Find and cure the Big-Sales, Small-order customers that are killing both parties with hidden activity-costs from too many, small orders.
- Get the LIPA and CTS analytics to support guidelines 4.a-c.
- With customer profitability analytics identify your Core customers: the 10-20% that provide 120-140% of your profits to pay for your losing accounts. Do a “Core Renewal” to: 2X Sales; 2X GM$s/employee; and 5X Profit Dollars/employee.
A US economist tours China in the early 80’s. Seeing a canal being dug by an army of workers with shovels, he inquires: “Why not use a bulldozer?’
The Manager snaps back: “Do you want to put these poor workers out of a job!”.
The Economist muses: “Then, give them spoons” (and create more jobs).
The extra Busi-Ness of the spoons idea is laughable. But, the real problem is that the Manager can’t envision what his Unseen, Next, Higher-Level Opportunities are for redeploying slack workers after getting a bulldozer. What are your next-level, value and profit improving opportunities that you are dying to pursue?
Continue reading 29. Minnow Busi-Ness Prevents Big Account Wins
Bo Burlingham of Inc. Magazine wrote the book: Finish Big: How Great Entrepreneurs Exit Their Companies on Top. He distilled his CEO survey results into these five general goals:
- Be treated fairly during your exit process.
- Have a sense of legacy accomplishment. The world is better for your fun work invested.
- Be at peace with what happens to those who helped you build the firm.
- Have new things to do that you are looking forward to.
- The company will continue to thrive (even better) without you.
But what pre-requisite skills must you to achieve these goals?
Continue reading 28. 5 CEO Goals to Finish Big
According to a March 2016 Gallup poll, only 33% of U.S. employees were “engaged” with their jobs. But, what if I told you that you could get much higher engagement, as well as increased growth and profit rates, simply by ensuring that all of your distributor employees know the answers to these game-changing questions? It’s true! Here are the questions:
- Who are the top 10 most (potentially) profitable customers that pay a disproportionate amount of your profits and payroll?
- What are the customer/niche-tuned service metrics that they want?
- How do department metrics help improve key- account service metrics?
Continue reading 27. 8 Ways to Engage Distributor Employees with All-Win Information