The sales managers' challenge:
Get the numbers with smaller budgets and fewer people...
Fierce competition...
Customers who demand more but expect lower pricing...
The most common solutions:
Tweak the compensation system...
Rally the troops...
Apply pressure...
Lower your price...
Look for new talent...
Reforecast...
Why aren't these common solutions producing the results they once did?What has changed? How do you stimulate sales performance.
So here's a detailed look at the manufacturer/distributor working relationship 1996-2000
82% of manufacturers and 92% of distributors said yes to "Are working relationship problems having a negative impact on your business?"
Survey participants indicated that relationship related problems resulted in increased sales and marketing costs and lost sales volume.
Why?
Satified with the status quo, or not aware of the true costs...
We identified the measurable impact of working relationship problems using Kaizen principles.
"What are the most common areas of waste in the relationship between mfgrs and distributors."
#1 Fixing Mistakes
#2 Expediting Orders/Fast Tracking
#3 Excess inventory
#4 Waiting
These unnecessary channel costs resulted in higher operating costs,
increased sales and marketing costs and lost sales volume.
The bullwhip effect: These problems intensify as they move toward the customer -- shifting the burden
Where will these problems have the greatest impact?
Who is going to do everything humanly possible to keep this from happening?
What comsumes a sales person's time? Fixing problems. "We don't notice a lot of these problems because we have a really good rep. When we have problems, our rep throws his whole body at them and fixes them."
The 5% of peak performers:
- Have higher sales volume
- Higher net margins
- More loyal customers
- Less turnover
- Lower overall sales costs
- stop looking for the silver bullet
- stop thinking in terms of hiring peak sales performers
- start thinking about getting more out of your existing sales force
- identify which of the 5 common barriers are holding your salespeople back
- focus on the little things you can do that will fre up your salespeople- one hour at a time.