How distributors can use the second half of the year to enhance the bottom line.

It's that time of year. Time to reflect on the first half of the year and to consider how to improve for the remainder of the year.

For most people, the first six months haven't met expectations. And as you talk to other distributors in your market, you hear similar stories - which means you are maintaining your market share - but you know opportunities exist for doing better.

If you remember our last significant economic slowdown in the late '80s and early '90s (according to the Fed, we can't call it a downturn since the economy is still "growing"), those companies that aggressively focused their sales and marketing activities - while controlling costs - significantly outperformed companies that focused solely on cost-cutting. This is because these companies increased their market share and differentiated themselves from the competition, better positioning them for growth.

How can you become more aggressive, cost-effectively, over the remainder of the year? There are two strategies to consider: a focused promotional approach and an account-specific strategic process.

A six-step promotional approach

Most distributors conduct some type of promotional activities throughout the year. If you do not, you should. At least take advantage of manufacturer promotions, offered either directly from the manufacturer or through your marketing group. The key is to do something. If you don't have the people to implement minimal activity, hire an intern or seek outside assistance.

If you do conduct promotional programs, now is the time to plan the remainder of the year.

1. Sit down with your key manufacturers and focus all of your marketing efforts on them, and any complementary lines. Why? These are the products that are most important to your customers, plus the complementary lines are probably products that you should be selling to these same customers but are not (natural extension sales). You need to "ask" for the business.

2. Consider how you can involve your sales force in any promotion by having them focus their efforts on targeted customers.

3. Make sure each program is performance-oriented. Determine program goals, define metrics and communicate, communicate, communicate.

4. The promotional mailers you send your customers are communication tools - remind your customers about the services you offer. Use every opportunity to promote the ways you are different from your competition. And use a consistent branding approach.

5. Be creative. How can you make the program unique, thereby standing out from the competition? What hasn't been tried in your market? What has worked for friends? Talk with distributors in other parts of the country for ideas.

6. Use every manufacturer co-op dollar, or market development dollar, you can. And once you have exhausted your "allotment," ask for more. If manufacturers believe in your idea and can see how it will grow their business, they will invest in you.

If you are contractor-oriented and are comfortable with your promotional strategy, great. If you see bigger opportunities, or are industrially-oriented, consider an account-specific strategic process.

The account-specific strategic process

This is a nine-step approach to focusing your sales and marketing efforts on your best customers/prospects.

1. Segment your customer base. What markets do you serve? What markets do your customers serve? Are there any geographic or industry clusters where you can focus your marketing efforts?

2. Conduct a Customer Profitability Overview Analysis. What type of customer is profitable to you? Why? Develop a "short list" of high profitability, high potential customers (HPHP). It is important in this effort to focus on your best customers, not necessarily your biggest. Consider using an activity-based costing formula to determine net customer profitability.

3. Look at the product mix for these HPHP customers. Are they buying everything from you, or using you for only certain types of purchases? Do you carry the right items for what they need? If so, why aren't they buying them from you? The goal here is to increase your share of the customer. This is a sales and sales management issue. Perhaps develop a very targeted marketing effort, with selected manufacturers, to focus on these accounts. Many times your salespeople just need to ask for the business!

4. Look at your business and consider why people are doing business with you vs. your competition. What does your competition do well? What do your customers wish from you (other than lower prices)? To answer these questions, ask them. Conduct a brief customer survey or a focus group/advisory council. Use this opportunity to get closer to your customer and solicit their input to make you a better company. Two things typically occur in this effort. First, you learn from your customer and secondly, they appreciate that you asked them for help. Use this information in the next step.

5. When was the last time you discussed your competition? Their first six months were probably similar to yours. Be aggressive and target some of their customers. Use a rifle approach. Identify two to three accounts per salesperson, do some research as to their needs, and target your sales and marketing efforts. Have specific objectives for your salespeople to meet each week - identifying and meeting key contacts, determining needs, estimating revenue potential, scheduling joint sales calls with manufacturers, etc. - Think of this as "what steps are necessary to 'close' the sale and develop a relationship?"

6. Now that you have identified current key accounts and key prospects, focus your sales force. Do they need additional training? If so, consider exposing them to the Miller-Heiman sales-training process ( Their book called Strategic Selling should be a requirement for your sales force (only $11.99 through Amazon). Another program to consider is CounterIntuitive (, which offers an interesting program on customer penetration (ClientYield Management) and a formalized sales management process.

While both of these organizations focus on sales processes and more complex sales environments, for you to grow your business you need to consider other buying influences and seek additional contacts within your customers.

7. Conduct a marketing communications audit. Look at your print and Web materials. Are they consistent? Do they represent your company the way you

would like them to? Do they clearly communicate your USP (unique selling proposition)? What is your "brand" and do you reinforce it to your customers? If improvements are needed, use the next six months as a test. Work with your marketing department, or outside graphical support, to clearly communicate your message.

8. Market, market, market. A good marketing strategy will touch all of your customers, many of them differently. Put together an "umbrella marketing strategy" that utilizes your USP and offers something for everyone. Then, develop targeted strategies focused on selected customer/prospect segments - perhaps focusing on product mix issues, new market segments, new customers, account penetration. This is a version of one-to-one marketing. Many of the elements that you need to consider in this phase have been mentioned in the promotional approach. And involve your branch managers and salespeople, as they need to deliver the message to your customers and are the beneficiaries of program results.

9. If you have a good Web site, promote it, but more important, begin capturing customer e-mails to initiate e-marketing with your customers. This will enable you to get timely information to them quickly, before your competition, and enable you to quickly respond to competitive efforts. While your customers may not be ready to order from you over the Web (or you may not offer the service), many people do have online access and want information to help them work more productively.

The year is half gone, but your growth goals are still achievable. As much as these steps can help every distributor (and manufacturer), only the progressive, and aggressive, will take the initiative and position themselves for greater growth opportunities.