Before COVID-19 became a pandemic and entire sales forces were forced to work remotely from home, distributors had several traditional methods of generating growth at their disposal.
However, most of those go-to methods are less accessible in remote sales environments. They rely on insights derived from face-to-face interactions and site visits. If you haven’t equipped your sales team with a bounty of relevant customer data in the absence of these raw insights, you’re probably struggling to make headway with traditional growth strategies.
After a year of social distancing, reliance on remote environments and considering the degree of change your distribution business has likely experienced, it’s clear last year’s game plan for growth won’t cut it in 2021. You must edit tried-and-true approaches to fit today’s reality. Additionally, you must consider how you’ll approach less traditional strategies that could take your operations to a new level.
Below discusses three ways to get started.
Provide prescriptive growth guidance
Two core growth generation strategies that are limited by remote selling are penetrating existing accounts and acquiring new customers. Without the wealth of information gained from visiting with customers and assessing their business on-site, it’s your responsibility to provide salespeople a sufficient alternative that will support growth generation.
If you’re only giving them basic data, such as transaction data, they can’t make great strides. You need mature customer analytics that allows you to segment your customers into categories. This is known as customer stratification, and it provides more granular, customer-specific information without overwhelming the salesperson. There are two types of information that provide customer insights: Past — a customer-specific dashboard that summarizes key metrics in terms of revenue, product mix, margin trend and cost-to-serve, and future — a customer-specific profile that highlights item-level sales recommendations and margin enhancement opportunities.
An industrial distributor we worked with deployed this strategy as part of its remote sales effort. The distributor had performed customer stratification as part of its strategic initiatives during the last year. One of the key applications is the “customer X-ray” snapshot. The X-ray view distills customer KPIs into four buckets: customer volume mix, penetration, margin and cost-to-serve. The salesperson can access customer-specific information intuitively and instantly. The view lists customer-specific recommendations based on its periodic purchases, enabling the salesperson to integrate a customer’s past performance and future opportunities. The benefits are numerous for a remote selling model. It helps the salesperson prepare for customer calls, demonstrates consulting capability, creates value for customers, and minimizes pricing pressures.
Help your sales teams reorient.
You must be proactive in helping your salespeople reach their full potential with remote selling. Remote selling has unique demands and requires a new set of skills – particularly if you’re going to add a new tool like customer stratification. If you simply dispense a new tool and expect your teams to use it well or even accept it in the first place, your efforts will fall flat.
Two competencies are critical to reorient your sales teams with customer stratification: Customer insight — leveraging customer analytics to grow revenue, and customer influence —reinforcing value creation through new lenses. As described in the previous section, it’s paramount that the sales force leverages analytics to influence customer conversations in remote selling. When we worked with another industrial distributor, the sales vice president organized two virtual training sessions with the sales analytics team’s help. The first training helped sales managers understand the role of customer analytics in influencing customer calls. The second training was conducted both at the group as well as individual levels. The sessions helped salespeople understand the customer X-ray snapshot (customer performance) and how to use it. By applying advanced analytics to develop these customer X-rays and recommendations, we trained the sales team to access the information using easy-to-absorb visualizations intuitively and instantly.
Many of the less traditional strategies that distributors used to keep on the back burner are now front-and-center for consideration. These are strategies like expanding into eCommerce, updating your value proposition and moving into an adjacent vertical.
When the pandemic hit, these tactics quickly became essential to survival. If a distributor didn’t have eCommerce, they needed that channel to connect with customers. If demand in their vertical plummeted, they needed to find new verticals they could fit into easily. Distributors who already had eCommerce or had diversified their business could more seamlessly navigate the disruption.
An industrial distributor noted two major shifts in its customer mix following the pandemic. The distributor shipped products to 392 medical, healthcare and hospital customers that had purchased little-to-no products from them in the past. They also observed a surge (28%) in eCommerce customers’ traffic. Seeing these shifts in their customer portfolio (in terms of new customers and channel mix), the distributor examined the items customers bought to determine additional working capital investment needs. The distributor also examined the demand mix to understand how much represented a one-time surge versus recurring demand before making that additional inventory investment.
The key to innovation is to be strategic and targeted. Choose your focus for the year based on the most significant potential impact on your growth. Then, make a plan to pursue that innovation using data from your customers and your industry.