Presidential Selling Advice for Recessionary Times
Ancient Chinese Proverb
An ancient Chinese proverb reads, “The man who chases two monkeys catches neither.” During a recession, many distributor sales teams “flail around” chasing after every potential new customer they can identify. It must be remembered; expanding your sales to existing customers is five times easier than selling to a completely new customer. Distributor’s who Target Customers and Products avoid wasting valuable resources at the precise moment they need them most.
Targeting is an over used phrase
I can peal back time to the very first time I heard the word “target”. I was a brand new salesperson for a major manufacturer. My boss was taking me around to meet my newly assigned distributors. We spent a few moments sharing social niceties, talking about my background and discussing the expectations of our mutual customers. Then I heard it. The sales manager for my distributor said, “Call me sometime next week and we can Target some accounts.” I pretended to know exactly what he meant. But in reality, I had no idea. Later, I learned his definition meant - let’s set up some joint calls.
Fast forward, 28 years later. I was invited by a client to observe his annual Targeting meeting. 34 salespeople where gathered in a large conference room. The distributor’s own Specialists and key supply partners took positions at tables arranged around the perimeter of the room. The salespeople migrated around the room, round robin fashion, to spend 25 minutes setting Targets with the Specialists and supplier reps. I watched and listened in on their conversations.
What did I discover? Everybody used a different definition of “Target”. For some folks, Target meant, their largest account – whether there were real applications or not. Other salespeople used Target to describe an account they wanted to call on but had no idea as to potential, buying habits or other critical data. One thing was clear; Target was a nebulous word with no real meaning. Later, I asked my client and friend to define the word. Strangely, he had no clear definition.
The word “Target” had been used literally hundreds of times that day, but each person meant something different.
The need for a Target Vocabulary
To illustrate the need for vocabulary, let me share a story.
I live in Iowa - and, strange things happen here. What would you say if I told you there was an animal that appeared in my back yard occasionally? And, what if I told you the animal had fur and four legs? You would still wonder exactly what I was speaking about – right. But, what if I said it was an animal with four legs? What if I then told you it was big? Then what if I said it had horns? Still have no clue? Now I tell you it made a mysterious “MOOO” sound? You would probably say, “Frank why didn’t you say you had a cow back there?” Cow is part of our common vocabulary. We planned it that way a long time ago to make communications work better. I could have easily said, “There was a cow in my backyard” and you would have instantly conjured up a picture that narrowed down the definition.
You need to develop a vocabulary around accounts and Target is part of that vocabulary.
I define Targets as a known opportunity to sell more products and make more Gross Margin dollars. They must be defined, measurable and have specific time lines. The metrics are important because without them you will never know if your efforts are successful. And, without a time line, it’s impossible to determine where you are in the process.
For our industry, I break Targets into three categories:
Strategic decisions as to the kind of customers, the types of products, buying habits and other criteria important to your business are included in this category. These need to be established by company leadership.
Sales Person Level
High potential accounts whose actions, personality and business practices match the salesperson calling on them. They are migrating to a point where the salesperson gets over 90% of their available business. Salespeople and their direct manager need to establish these.
The practice of matching products to customer over a short term basis falls into this level. Most Supplier – Distributor coordination happens in this level. Salespeople and Specialists set these, sales managers guarantee the quality. Today we will drill into this practice.
A must for Recessionary Times - Product Level Targeting
Product Level Targeting becomes extremely important in recessionary times for a number of reasons. It is:
• Easily managed and simple to implement
• Short duration and results can be felt very soon
• Great for building Supplier cooperation
• The most effective way to develop your sales team
• A good way to better serve your customers
Product Level Targeting is achieved when products, potential application problems and customers are closely aligned. While most supplier reps understand the ins and outs of their products, they often lack a detailed understanding of exactly where the product is applied to the customer’s needs. Their territory size does not allow for detailed customer level knowledge. To illustrate this point, let’s imagine a new product designed for underwater lighting. The supplier rep typically understands the product specifications – the ability to withstand water pressure to 30 meter, the ability to create 5 lumens, etc. But he typically lacks the ability to tie underwater lighting to its useful applications in artificial crystal farming or some other local application. Further, he knows very few details about the customers in your territory.
Discussion of the product comes as part of a product sales meeting. After the meeting little is done to select (Target) the 5 or so customers who provide the best opportunity for a sale. And this is the essence of the target process.
We will quickly build a plan for Product Level Targeting in the next few paragraphs. Each step is like the supports of a three-leg stool; removal of just one and the whole stool ceases to function.
Step One – Identify the Product
Identify potential products for targeting using your existing lines. Look for new products or ask yourself, what cool product exists somewhere in the footnotes of the master catalog that might fall through the cracks. It is my experience that nearly every line has them and they never find their way into the spotlight.
Step Two – Identify and Record Customers with Application Needs
Explore potential customer application needs with your sales team. A word of caution; your goal falls not on gathering dozens of customers but rather a small handful who happen to have special needs. If a customer application is uncertain – move on. This exercise works on quality not quantity. Some salespeople will have no targets in their territory. As the list is developed don’t accept Acme Widget as a Target instead “drill down” to the very person or department who will understand the application.
Build a method for tracking the Product Targets. To be effective, this must be tracked and analyzed. I have developed a quick spreadsheet to get you started. Expect some resistance from your sales team - many will scream bloody murder when you begin to put metrics to their job. Stand resolute when you hear the comment, “Do you want me selling or keeping records?” The results will far outweigh the moaning and groaning.
Sample Product Level Document
||Murph "the Surf" Murphy
||Stainless Steel Wire Ties
||in corrosive locations
||New Product Group
||all metal design for marketing
Each salesperson should be capable of handling between 30 & 50 Product Level Targets. Your spreadsheet should be set up by salesperson so that you and they can quickly review the process on a monthly basis.
Step Three – Document the Process
In short monthly meetings review the process of each of the Product Level Targets. Experience dictates that salespeople need your coaching to objectively judge their progress in the initial stages. Some naturally give up too soon, others never decided to drop this “Target” and move on to another. In a short “post mortem” review, decide together what went right, what went wrong and how to improve the process. Equally important – record and celebrate the victories. It reinforces the process and allows for sales skill training.
And now, an import message for the Home Team
First, this is really not a great deal of work. Secondly, it brings your organization a step closer to having its own Targeting Process. This is important because research indicates that companies with a Targeting Process are 47% more effective at reaching their financial goals. And these days, that’s important for the Home Team.
And finally what’s this have to do with President Obama?
Rahm Emanuel, President Obama’s Chief of Staff, has gone on record as saying, “You never want a serious crisis to go to waste.” I agree. Most changes in business process at the selling end will be resisted by your own team. I heartily recommend that you use this recessionary crisis as a tool to drive sweeping changes in your business process. You will be glad you did.