Marketing Implementation Articles

	
THE QUALITY PROCESS IN SALES
Or, why is the expense category that costs the most, the last one that gets "quality" emphasis?



 Part 1: What Salesmen Need to Know

There is a huge movement in the distribution industry called the "quality process", and every company had better be at least thinking about the impact quality will have on its business.

In many cases this process starts with the distributor doing some sort of survey of his customers, to establish the base line of service his customers think they are getting from them. Then the distributor starts an internal analysis of the survey and begins to set in place the quality teams and develops the necessary measurement criteria and feedback loops.

At this point, he finds out the easy things to measure and log area the ones that get fixed fast. Then the quality teams start in on the less obvious areas and the going gets a little slower. These are things that are outside the direct control of the distributor such as vendor and customer errors, or processes that are harder to measure like product knowledge or sales performance. It's this last area I am going to focus on here.

The questions I hope to address are:

• Have you decided what the goal or purpose of your company is?

• If you have, is it the same goal your customers and vendors think you have, or do they think you are fulfilling another purpose?

• Does your sales force have the skills and product knowledge necessary to sell all your products, or do you have a program in place to train new people, and retrain the old people in new products?

• And finally, do you have a set of measurable goals for each sales person, and the feedback mechanism for both management and the sales force that will track the progress on a timely basis?

I will not address the "salesmanship" issues such as probings, closings, and handling objections, because there are many good programs that teach this and are available today.

First, What is the goal of your company?

I would suggest you spend some time on this one, because if you don't do it right here, you will end up encouraging behavior that doesn't support the goal.

Another item to remember: if you are involved in the ownership, there is a difference in your personal goals and the company goals. You may have all the emotions you want, but an economic entity follows the rules of economics and in most cases emotions will not count.

Another consideration to keep in mind is: don't let the goal be too narrow, or too broad. To "make money or sell more" is too broad, but "to sell left-handed monkey wrenches to right-handed plumbers" is probably too narrow. A goal should be one or two sentences long, define the general services and products to be sold, to what type of industries, and some sort of minimum growth and profit performance. Remember, this should be a goal that customers, vendors, and employees can refer to and measure you and themselves with, so time spent here will communicate a lot very effectively.

Do Customers, Employees, Vendors Agree?

Knowing that your company has a purpose, a good reality check would be to see if your customers feel it is a worthwhile mission, and your employees and vendors agree to support it. This may sound strange, but your quality teams should have a chance to pick it apart first so they get to see how to use it in their daily work, and it gives those vendors that care, a chance to see where your company is headed. You may find out that you have defined your products too narrowly, like the railroads failing to realize they were in the transportation business until the truck companies almost took half their business away. If you need to modify the company's goal, do it; remember all decisions made should agree with the goal.

What Products and Services?

Now that you know where you want to take the company, the next thing the sales force has to do is define the products and services the company needs to sell to satisfy the customers. Your goal at this level is to establish a full package of goods and services that meet or exceed their expectations. After choosing all the products necessary the vendors you end up with should be put into two or three classes: First, are the main lines, or those products that generate, or could generate, a significant amount of sales and profit for you. Second, those lines that will never have large profit potential, but are door openers or problem solvers. Third, tertiary lines, those that really don't have a large potential in most accounts, nor are they good door openers, but round out your product offering.

The third group is not to be sold, but to be made available as a service to the customers, because they all use some of it, and promoted with resources other than face-to-face selling, e.g., fliers or mailings.

What Do Salesmen Need to Know?

Once the products are chosen and ranked, the real work will begin and the quality process should start to take effect. If you now know the primary and secondary lines which are the ones that will allow your company to achieve its goal, it would make sense that all your sales people need to know as much as possible about these lines. If you were a customer, what things would you want a salesman to know about the products he is selling to you? And if you were a manufacturer what would you expect a distributor salesman to know about your products?

In answering these questions, you, as a distributor, realize a factory man or a product engineer should always have more time, therefore more detailed knowledge, about his products, but this is not an excuse for a lack of general knowledge about a product by your salesmen.

Five Critical Areas of Knowledge

Given the above, I would expect a fully qualified multiline distributor salesman to have working knowledge of five areas of each product you handle. Now before you read any further, I realize this is not an easy task, but if you want to offer your customers and suppliers the best service, as it relates to your sales and marketing effort, then you need to be working as hard at improving your company in these areas as you do at keeping the mistakes in the order processing system to zero. Historically, the sales organization is too busy taking orders and selling product, or correcting mistakes, to think much about training. But in this age of technology, education in all areas of the sales and marketing effort has become imperative.

The five areas of knowledge needed for each product line represented are:

1) What type of customer would buy this product, why would he buy it, where would he use it?

These may sound like simple questions, but I have asked many manufacturers' salesmen the same questions and gotten no real answers. They will say: "Lots of companies use this stuff", or, "Everyone uses this". If they can't be more specific than this, how does the distributor, or the manufacturer, hope to get any focus on the markets and customers he hopes to sell to? If the manufacturer you represent can't answer this question, then you must do it yourself, and log that down as a weakness in area No. 4 below.

2) What are the competitive strengths and weaknesses of the vendor(s) you compete against for this group of product(s)?

Here, your sales force, and if appropriate, the vendor, should do a no-holds-barred analysis of the good and bad attributes of the competing manufacturers of the product(s) in areas such as price, breadth of line, delivery, origin of manufacture, etc. This will give your company a good chance to educate the sales force on the alternative products your customer is looking at.

3) What are the competitive strengths and weaknesses of the distributors you compete against for this group of product(s)?

If you don't know your local competition's good and bad points for each of the lines that compete with you, then you are probably losing business that could be yours, assuming you knew how to take advantage of your competitors' weaknesses. You could save yourself a lot of useless effort trying to get some business from a competitor that has such a strong offering in a product line that he will win every time in a head-to-head battle. For this type of competitor you must sell your other strengths, or package a group of services together to get the business.

4) What are the competitive strengths and weaknesses of the vendor(s) that you represent for this product group(s)?

Unless you are the luckiest distributor in the world, and represent every full-line, lowest-cost, best-product manufacturer you probably have lines that have a weakness or two. You also have the lines you represent because they have some good points. Identify both, and teach your sales people to sell the strengths, and sell around the weaknesses.

5) What are the questions that need answers, in order for any of the vendor's products to be specified?

I refer to this as: "What are the (one to ten) standard questions that need to be answered in order to specify a product's application?" If you order an item to do a specific job from any catalog, you have to specify size, color, etc. If your customer orders an item from you, then you need to know the equivalent information, and if your salesman (inside or outside) doesn't ask for it, another call is necessary, which is not good for customer relations or the quality process. So, if you think you want your salesmen to represent all your liens, then you, and your supplier, need to give all your sales people the "crib sheet" necessary to ask the proper questions and either specify the product on sight, or call your specialist, or factory customer service, and get the proper item, without bugging the customer again. This seems to be a natural thing to do, but many of us (distributors and manufacturers) forget the importance of this.

Now that you have all your sales people knowledgeable in all your major lines, how do you measure their performance? I suppose you can do it on gross sales or gross profit. You can do the same for the factory representative. But what if he/they have the largest account(s)? How do you measure the penetration of each account? What if one salesman has accounts worth $50 million dollars in your products, and another has only $10 million-who has the better market share? The quality process needs to have measurable goals to go against.

One solution is to have each salesman create a key account list, that includes at least three things. First: customers that can give you and your supplier new business; second: the amount of business these customers can give you, and third: customers who have said they would buy the product from you, if you can "make the conditions right".

If you have 20 major products defined by your quality group, and you want each salesman to have five new customers for a minimum of $5,000 each, this would give you a key account list worth $500,000 of "new" business per sales territory. This is usually a sizable increase in new business in any territory, and now all you have to do is track it, and feed it back to the salesmen, and the factory representatives; then watch your sales grow. This also gives you a solid measure of performance.

I have been through the above, and have developed the feedback loops to control the above process. The next installment of this article will explain how to look for a data base and report generator to help you manage your quality process in the sales effort. Meanwhile, lay a good groundwork by focussing on the give areas of knowledge described above.

Next: Building the database for quality in sales