WINTER 2020 EDITION

PLANNING TO WIN IN 2021—AND BEYOND

The pandemic took a major bite out of our 2020 business plans. For some electrical distributors, this meant an 18-22% drop in orders. The good news is we are still alive, and our businesses will survive. Introspection along the way reveals we and our customers have learned a few things about business. For example, it is probably reasonable to believe working from home will be one of the carryovers from the pandemic. Customers will be even harder to reach in the future than the past. A few customers have come to enjoy the relative quiet of not having salespeople drop by. Even more have learned to gather information using some form of technology, whether it be the phone, internet, Zoom or another.

With all of this in mind, let us look at how we can push our business forward using these changes as a gentle breeze to our back rather than a stiff headwind. Before we launch, allow me to share a poignant comment made by the president of one successful distributor: “Every day one of my people comes to me asking me what they should do during this COVID crisis. I have a few ideas, but they must also realize this is my first global pandemic, too.”

While I agree wholeheartedly with this gentleman, I also believe economic storms and other business crises (i.e. global pandemics) serve to accelerate changes already in place. For example, business reengineering and rightsizing was started in the mid-80s, but it took the recession of the early-90s to drive the changes to nearly every company in America. I believe this pandemic-driven storm will be no different.

The ‘new normal’ could be more like a gradual shift

Looking at some of the current trends, it is a safe guess that sales will be one of the greatest areas of change as we round the turn into the back stretch of the pandemic. Important to note, I said the back stretch. Experts do not believe the pandemic is going to magically end on the first of January 2021, the day after a vaccine is produced or on any one given day for that matter. Unfortunately, we will be in a long limbo. Since selling is not about the seller, but instead about the customer, we will come to recognize customer preferences and react accordingly.

Inside sales will grow in importance

This is a trend that has been building for several years. Customers want answers to complicated questions tied to the application, troubleshooting and potential configuration of products quickly and easily. Make no mistake about it, this is not the typical price, delivery and order entry stuff many distribu-tors mistake for inside sales.

While many argue the simplicity of electronically transferring a customer from the inside group to a salesperson or specialist’s mobile phone, there are times these folks will be engaged with customers or nestled behind a steering wheel maneuvering through crosstown traffic. What they possess in enthusiasm and great communication skills will be outweighed by a lack of technical data at their fingertips.

Extending on this idea further, inside sales teams will have other technology-driven advantages over their car-bound counterparts. Assume an inside sales team has access to a quality webcam which, unlike those on your laptop, can focus on objects rather than people. Armed with this $100 device, an inside salesperson can demonstrate the proper way to configure, assemble or troubleshoot a product without leaving the office. Instant customer gratification seems to be the new customer service mantra.

Inside and outside sales will be more tightly coupled

With more meaningful sales opportunities coming into the inside sales group, there will be a need for tightening the links between inside and outside sales. Most distributors have already invested in CRM packages. Now is the time to develop better habits tied to inquiries and account progress that are pertinent not only to outside sales but to the rest of the sales team.

What would happen if the inside sales team had the ability to “dispatch” an outside resource to the customer? Most distributor teams are using Outlook to manage personal calendars. With calendar sharing, an inside salesperson could easily schedule an appointment with customers who need something that has to be done in person.

How might this calendar-sharing work? A customer calls in with a technical question. As the conversation con-tinues, it becomes clear the customer lacks one or two important details, and the question cannot be fully answered without someone reviewing the situation on site. Instead of saying, “I will have your salesperson call you,” they open a shared calendar and say, “Your salesperson has a call scheduled near you next Tuesday and I can have them stop in at either 9:30 a.m. or 1:15 p.m.” The appointment is set, and the customer is expecting the seller. A few progressive distributors are already doing this; now is the time to start training.

Appointments will become nearly mandatory

The previous appointment is important for two reasons. First, many of our industry’s best sellers have never quite mastered the appointment process. Believe it or not, there are still hun-dreds of salespeople working what used to be called a “milk route” call schedule. They tell their customers, “I will drop by on Tuesday every week.” The implied threat is “Milk Run Mike” would darken the doorway every week even if the customer did not have a need, was deeply involved in a project, was sitting in a department meeting or was up to his/her neck in issues. These salespeople have not been viewed kindly by their customers for a long time. They hate it today and will despise it in the future.

My second point is that customer appointments are becoming more difficult to set. Customers expect more. They demand to know the following: what will be covered, how long the call will last and the purpose of each participant if more than one is joining the call. This translates into more planning for the seller. Joint calls will need to be better orchestrated.

Joint calls will still be a part of the play

Joint calls have served our industry well. Salespeople bond with their counterparts at suppliers and learn selling techniques and many other important points. However, there will be a need for a new level of discipline with supply-partners traveling in from out of town. Whether well-deserved or not, the regional managers of many secondary product lines have a repu-tation for going off script during joint calls. Somehow in their zeal to talk to customers, they want to cover the subject at hand and show off every new product introduced since 2000. This must end.

Specialists and distributor business development people are often part of the joint call landscape. Many times, if two people are on the call it goes beyond actual customer needs. If there is a need for a specialist, why not send the specialist while the salesperson addresses other needs? As team selling develops, so too does the need for communication and information sharing between line salespeople and the specialists working on the same account. Just tagging along to stay in the loop will die a slow painful death; the best distributors will give the prac-tice the coupe de gras right away.

Specialists as a resource

Specialists have a competitive advan-tage as both a driver of customer value and a resource (an expensive resource at that). Today, during the COVID-19 pandemic, many customers have closed their doors to sellers but continue to welcome those they see as necessary to the continued operation of their business. As many customers continue to limit the access of distribu-tor salespeople to their operations by way of strict appointment guidelines and even tighter limitations on por-tions of their facilities, the selling job becomes more difficult. Happily, most customers do not view special-ists as sales types, which could be a great Trojan Horse play for distributors employing specialists. A little thought now will make it possible to position yourself to maximize this service-oriented perception.

In at least some instances, the work provided by specialists should come with a fee attached. This adds to the customer perception that their visits are not sales calls. More importantly, those providing service are generally expedited through the facility check-in process. It is not uncommon for service providers to be issued clearances that allow them to travel through facilities without escorts and other such encumbrances. Moving to this level allows for better use of a specialist’s time, translating to more calls and more focused customer service. Teaching specialists to set up sales situations for the rest of the team will be a strategically important move into the future.

Distributors need to take responsibility for their own product training

Unlike back in grandpa’s day when relationships and local inventory were the distributor’s stock and trade, prod-uct knowledge is the foundation of distributor selling. Best-in-class dis-tributors place a higher value on appli-cation knowledge and solution selling than they do on product knowledge. But without solid product knowledge, the solution sale is impossible. And, with a few exceptions, manufacturers have delivered the bulk of the product knowledge-based training.

Again, looking at industry trends since the recession of 2001, manufacturers are rapidly backing away from this responsibility. The Great Recession of 2008 furthered this trend, and it will accelerate to become the new normal.

Do not confuse the current pandemic lockdown phenomenon of manufactur-ers begging for your people’s attention with Zoom-related training with the real future. Confidential conversations with manufacturers point to growing fatigue of providing introductory classes for your newest hires; not to mention conducting training classes that are not taken seriously.

For distributors, this translates into investing in one of the many online programs to cover the basics and assigning responsibility for product training to an individual within your company. Specialists are one of the logical choices for covering some of the more advanced issues tied to selling products. If your company fails to actively manage product training, growth will suffer.

Being online and being good at the process

Reports from manufacturers indicate online (only) distributors have been tracking ahead of traditional brick-and-mortar distributors by as much as 40%. While none of them doubt the need for local support, technical expertise and application skills of their traditional distributors, they see customers placing more of their orders online.

One of the major trends through the pandemic has been the growth in web-based buying. For instance, according to emarketer.com (Oct. 12, 2020) e-commerce sales have grown by 32.4% while brick-and-mortar retailer sales have declined by 3.2%. While most distributors recognize the trend and most have launched web-stores of their own, our industry has not gotten “good” at the process. The question becomes, what does it take to be good.

Understanding our customers want an omni-channel approach to buying, they want to use both the internet and our technically skilled sales teams. However, research with distributor sales teams indicates the sellers do not understand how to maneuver through their own organization’s webstore. Even their best customers are offered no training on what is available to them online. Inside salespeople rarely use the online product selectors built into the webstores to demonstrate customer options. Most distributors have relegated responsibility for the webstore to IT professionals who do not understand our products, customer needs or sales process.

The new reality calls for a sales manager to oversee our internet-based sales and attention placed to creating an environment where traditional salespeople understand the effort is just another tool for selling more product.

A final word about the ‘new normal’

In the weeks since writing this article, I have spoken to more than 10 distribu-tors who have COVID in their lives—either a member of their immediate family, a co-worker or they personally have tested positive. Yet, they continue to see solid improvement in their business. As stated earlier, this thing will not end abruptly on Jan. 1, 2021. Our customers will adopt the circum-stances, and we will continue to be there to serve them. Electrical distribu-tors will reshape their business plans to meet our customers’ needs; it is just something we do. Now is the time to begin your journey into the new normal.

Frank Hurtte
Straight talk, common sense and powerful interactions all describe Frank Hurtte. He speaks and consults on the new reality facing distribution. Contact him at River Heights Consulting via frank@riverheightsconsulting.com or 563-514-1104.