Twelve Steps to Better Wholesale Sales and Distribution
If you’re like most distributors, you probably operate in a crowded, highly competitive market. You’re trying to grow and keep your supplier base, distinguishing yourself by always looking for the next hot new brand that’s going to make you money, and get your company noticed. You’re also trying to grow sales in your territory, usually at some rate determined by factors beyond your control, like the economy, supply shortages, and market trends that you didn’t anticipate. You’ve made it your mission to make every supplier happy, even the little guys, while managing crushing goals from you largest suppliers. You’re committed to keep gross profits up, while supplier pressures are pushing your margins down.
How do you create a sales environment which will overcome the adversity you face in such a competitive market every day? It’s not easy. I conduct a two-day seminar in overcoming distributor roadblocks, while creating a supportive sales environment which ensures that all your employees are awake, aware and engaged. I recently gave a lecture at the 2018 Alcoholic Beverage Importers and Distributors Conference in New York. This article is an product of that lecture, with twelve essential steps you can take to ensure that your distributor sales organization is the best it can be.
Change Your Culture…
1. Sales are priority one
· Top sales organizations succeed by targeting the right customers and helping them improve their business. If you’re willing to help your customers get what they want, your business will thrive. What does that mean? Giving them quality products, delivered on time and at prices that make them profitable.
· Every department in your company should have sales support in their job description. Customer service, brand management, marketing, accounting and warehouse & trucking all need to believe that “sales” is part of their job. If they don’t, you’re not going to be a successful sales company.
2. Establish a “coaching culture”
· The latest Gallup research shows that continuous training and education, as an everyday exercise, called “performance development”, is much more effective than annual performance reviews. Waiting until the end of the year to review performance is too late! You and your management team needs to be coaching every day! Implementing “Performance Development” creates a cultural shift not only in how people work, but how they work together.
· Moving from traditional management to Performance Development requires managers to think of themselves as coaches, not bosses. What would happen if a basketball coach waited until the end of the game, or the end of the season to give each player a performance review? That would be crazy, right? Coaches give minute by minute instructions on the court and review performance at the end of each game. They don’t just critique the team at the end of the season. Managers shouldn’t do it either.
3. Embrace a leadership philosophy of developing strengths vs. fixing weaknesses
· It’s the job of a great manager/coach to develop employee strengths and channel that energy in ways which fulfill the goals and objectives of the company, while minimizing disruption to your organization.
· Focus on what’s right with people and stop trying to fix what’s wrong with them. You’re going to be frustrated and you’re not likely going to succeed anyway.
4. Training and education distinguish top performers
· The best companies teach their employees how to work. Don’t assume your people know how to manage their time and how to prioritize their work flow.
· Training your employees in the basics of selling should not be overlooked. Coach them and get them professional help if necessary.
· Clearly, in our business, wine education is prime currency. Invest in your employees, whether it means sponsoring trips or subsidizing WSET courses. Make your sales staff the best informed on the street.
· Finally, understand the difference between Skill and Talent? Skills can be taught. Talent is innate, it can’t be taught, but it can be directed
Change Your Process…
5. Give everyone the responsibility and the authority to solve problems
· It’s not enough to give employees responsibility without giving them authority. It’s one of the hardest thing for corporate managers to do – give up authority.
· Another big mistake is losing sight of your goal and your mission. Whether you’re talking about customer service or sales, don’t lose sight of the fact that you eventually have to serve the customer.
· Following procedures, should always be paired with an end result which fulfills the company mission statement. Therefore, the best organizations follow procedure 90% of the time. The other 10% of the time, employees are empowered to “break the rules” in order to ensure a positive outcome for the customer or the company. I always tell my staff, “we make the rules so we can also break them if we need to”.
6. Cohesive, consistent, processes which serve the customer, not the organization
· What I mean by this, is that if you’re making rules and procedures which make your job and your employees jobs easier, you’re not focusing on the customers or your suppliers.
· Amazon CEO, Jeff Bezos, explains that as a companies grow, it becomes easier to rely on the process rather than the result. In which case, the process becomes "the thing," or what he likes to call a “proxy”. In other words, the process takes the place of the desired result and usually ends in failure. When this happens to companies, they stop looking at outcomes and only consider whether they’ve followed the process correctly.
· An extreme example of this happened to United Airlines last year. Remember, UAL forcibly removed a doctor from a plane in order to make room for four United employees. What a PR mess that was? The most amazing fact of the case, though, was that during the investigation into what happened, all those UAL employees interviewed said that they had followed procedure. The end result was a disaster.
7. Planning and maintenance versus fire drills and breakdowns
· If you’re going to run a successful sales organization, you have to know what you plan to accomplish in yearly, quarterly and monthly buckets. Take those goals and build an action plan for each one.
· Planning to succeed rather than trying not to fail makes you proactive and unlikely to engage in “fire drills” of your own making or from your suppliers.
· Action plans are far more successful than what I like to call re-action plans.
Change Your Strategy…
8. Successful sales goals are bottom up
· That is, they should start with the customer or the sales rep and flow up, not the other way around.
· If sales reps participate in the process, then they will own the results.
· Goals can’t be seat of the pants numbers. Set “SMART” goals which are: Specific, Measurable, Achievable, Realistic, Time-specific).
· Then hold people accountable - track, reward and recognize performance.
9. Align individual goals with company goals
· Research shows that individuals and teams perform better when an employee is responsible for both individual and team goals. Therefore, the work individuals perform and the goals they pursue, should align with the purpose and goals of their team and the organization.
· Employees need to understand their company’s strategy and values, so they can see a connection between their performance and the company’s success.
· A shared, comprehensive sales and marketing calendar; in a single, visible place, where everyone can see the company’s top priorities and programs from top to bottom for every quarter and every month is essential.
10. Enlist your supplier partners to participate in the negotiation and fulfillment of goals
· Find out, what are they asking for? Is it reasonable? Is there a timetable?
· What do your suppliers bring to the table to help you achieve their goals? Do they offer incentives? Depletion allowances? Other marketing support?
· Outline what your organization will bring - Incentives? Tracking? A commitment to success?
· Insist on a customized, written, marketing plan for each supplier detailing the goals and objectives.
11. Brand Management, Sales Management, and Marketing, should all have a seat at the table
· Don’t think that you alone, as the boss, can sit in a meeting with suppliers and credibly promise to deliver on a sales plan.
· Have accounting and logistics sign off, (and this is something almost no one does) to secure that the back of the house can support the goals. Can you get the inventory here in time? Is your GP in line? Have you budgeted the money to purchasing?
· Resist the idea that one person or one department can speak for all of the stakeholders. Integration of the process is key to success
12. Turn supplier goals into executable sales plans
· Think about it. This is your primary function as a wholesale distributor! It’s your job to take your suppliers goals and ambitions – what they want to do in the market - and work out an executable sales and marketing plan, tailored to your territory, which will get the supplier to their stated goals. That’s what they need you for and if you’re not delivering on this single objective every day, then you’re not fulfilling your role as a distributor!