10. Economy Worries in Distribution? Provide “Challenger” Scripts for Your Reps

Global economic clouds are gathering. Rain or shine, why not get bigger chunks of your best customers’ business with lower service-activity costs?

A recommended book, The Challenger Sale by Brent Adamson, tells you how. The book’s research proves that “Challenger Reps” killed the “nice guys” at the bottom of the 2009 downturn.

The Challenger Rep has better scripts to pitch to customers. Their solutions are to work together to reduce shared, heretofore, hidden activity costs to improve both parties’ bottom lines. The nice guys — who don’t rock the boat, suck up and reactively hustle harder for any customer request — are outdated.

Since 1988, purchasing has shifted from wanting just “Price” and “Availability” to also wanting replenishment-process cost reductions (“Supply Chain”). You’ve seen this!

Most distributors have and continue to lose big accounts to “sole, integrated-supply contracts”. Head buying honchos are VPs of “Supply Chain”, not “Purchasing”. So, add Supply-Chain-Solution selling and scripts to your Reps’ repertoire.

How? Start with consolidating unintentional small-dollar line item and order events that are systematically occurring between your company and bigger accounts. Identify the most frequently-picked SKUs with the smallest-dollar per pick average. Then, find out the most common cause(s) behind these smallest-dollar lines and invoices. The previously unmeasured, unknown “root causes” and potential-fix ideas will emerge. (See this Grainger case story)

Re-tuning how you do business together can reduce both replenishment-process and service-activity costs that equal as little as 5% to 30% or more of the customer’s annual purchases. Price pressure is forever. But, why not go after the 5-30%+ lose-lose, and change it to win-win opportunities? Don’t be surprised if the customer is so grateful that they decide to partner with you and give you 100% of what you can sell them. Any competitor can cut the price 1 to a few points, but only you will be saving them the extra 5-30%+.

Tuning up all big customers’ buying processes and keeping them efficient requires some new analytics tools and Cost-To-Serve (CTS) Math education, both of which are quickly and affordably available. For example,

  1. Request a demo at www.waypointanalytics.net of WayPoint Analytics’ web-based costing service for a monthly fee.
  2. Learn more about Cost-to-Serve Math by checking out the recently released CTS-Math course at: http://iklarity-courses.thinkific.com/courses/CTS-Math
  3. Attend an APIC Conference, which is primarily devoted to cost-to-serve math and line item profitability. Learn more about it and register here: www.apicconference.com.

 

Don’t keep pushing Nice Guy hustle (which is also a commodity). Join the supply-chain-solution world to partner with the biggest, best customers.

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