Beringer Associates Technology Blog

Who enjoys losing? The story of Jim and a lost sale

lost sale

This week we had the opportunity to sponsor the 2014 Connect event in Dallas. This event brings together Distributors and users of the Prophet 21 system from all across North America.

 

My first impression of this year’s event was WOW! Over 400 attendees and 35 vendor sponsors! Beringer Associates has been part of this community for several years and have seen this event grow significantly to where it is today.

 

It was great to connect with old friends in the user community, catch up with long-time Prophet 21/Epicor team members and to meet new people as well.

 

I personally connected with people from over 50 distributors at this event and heard a lot of the same things as we discussed their goals and challenges related to Sales and Marketing. Distribution is a business that has evolved from selling in a very old school fashion to one that is embracing technology and data to be more effective in sales and marketing. I remember the days when a sales rep at a distributor considered their trunk inventory and a handshake their best tools, today selling in this highly commoditized arena is more about adding value.

 

How do you add value when selling commodity products? One way is to better understand the customer. I recall a story or more of a confession from a longtime sales rep at an industrial supplier, let’s call him Jim.

 

Jim had been selling to Company A for many years and had built great relationships with key people at this company over the years. This customer announced that they were launching a new line and needed to get some pricing on several items. Jim was excited about this opportunity and got right to work on pricing the items. He sent the proposal over to his longtime purchasing contact then sat back and waited for the order as that is always how things have went with Company A.

 

Jim didn’t hear anything back for over a week and realized he hadn’t followed up on this quote so he called his purchasing contact on the quote. He was informed that they decided to buy from another supplier… Jim was floored. How could this happen?

 

Jim learned later that a competitor was also contacted and asked to provide pricing. The sales rep for the competitor (Shelly) started with the purchasing contact but was using a CRM system that has social integration with data sources like LinkedIn. She noticed that Company A had just brought in a new CFO. She researched this CFO and learned that he had been very successful at previous companies in decreasing manufacturing costs. She sat in on one of Company A’s investor calls and also reviewed their 10k. She learned that the new CFO’s charter is to reduce inventory costs by 25%. She contacted the CFO, introduced herself and asked for a meeting to discuss how she could help him reduce their in-process inventory costs, the CFO obliged.

 

During the meeting with the CFO Shelly focused on how as a supplier she could help them reduce in-process inventory costs. Ahead of the meeting she worked with her vendors to build a Just in Time program for Company A with direct ship items from the vendor. She demonstrated how this approach would reduce in-process inventory costs significantly. The CFO was impressed.

 

As a result of this approach Shelly not only won the business for the line expansion at Company A, but is now creating similar programs for other lines at Company A.

 

Jim saw sales to Company A decline to mainly items they have exclusivity with (a 63% decline in sales to Company A).

 

This is a good example of how the selling landscape has changed. Today everyone in sales needs to be more aware of the centers of influence at a customer and to focus on adding value. How many places could a customer buy the items you sell? Likely many so we have to differentiate on value-add. We should always assume there is competition, think about it as a triangle, you, the customer and at least one competitor. Jim’s company realized their deficiency and decided to implement a CRM system and to adopt a sales process to keep this from happening again.

 

How would your sales team perform in this advanced selling scenario? Would they have identified the new center of influence despite having dealt with the same purchasing contacts for years? Would they have dug in and found out about the goal to reduce inventory costs? Some of this is certainly sales acumen however tools and process are the other important aspects to a well-rounded sales plan.

 

Beringer Associates, Inc. has been providing technology solutions to Wholesale Distributors for over 21 years. We offer CRM for Distribution, a Sales, Marketing & Customer Service solution built on the industry leading Microsoft Dynamics CRM platform. CRM for Distribution is fully integrated with Prophet 21 allowing you to have a centralized Sales/Marketing and Support system that increases sales effectiveness, improves marketing abilities and allows you to provide stellar customer support. We welcome the opportunity to show you how CRM for Distribution could help your business.