How Does A Distributor Keep A Competitive Sales Edge?

How does one stand out from the pack when competing against independent distributors, wholesalers, and AmazonSupply? Industry veteran and sales guru Jim Pancero shares his thoughts on the keys to staying ahead of the curve.

This article was part of Industrial Distribution's March/April print issue in the segment, "A Guide to the Modern Sales Organization." The full issue can be viewed here.

One time we counted and I had done work in 80 different industries – all in manufacturing, distribution, and equipment sales. I had trained 3,200 John Deere people in their teams. I’ve worked in steel construction, lumber distribution, electrical parts distribution, pneumatic hydraulics, automation, and many different areas. I consistently watch what it takes to maintain a competitive edge today within them. Within that, I cannot name any of those industries where your just product is a competitive advantage. 

Remember when the iPhone was a competitive advantage, just because of a phone? You held up an iPhone and it was so different that everyone goes “oh my God, you’ve got an iPhone!” And the functionality, the apps, everything was so unique because all it was against Blackberry and a flip phone. It was a major redefinition of life – because of a product. Recently I was sitting on an airplane and a guy was talking on his phone and I couldn’t recognize if it was an Apple or an Android. So we’re back to product no longer being a competitive advantage. That means your service, support, follow through, and those other issues are going to be where your competitive advantage comes from. 

So, what does it take to gain a competitive edge today? It’s still crucial to identify product and quality as central – but it doesn’t give you a competitive advantage. A competitive advantage comes from four things today. 

1. Overwhelming Service

The intimacy of service is a key competitive edge today. How connected does the customer feel to you and what they’re doing? If they feel more connected, they are willing to pay a premium price. I live in Dallas, and I take about 60 flights a year, but I haven’t been on a Southwest flight in 3 years – and I’m in a Southwest hub! The very minor difference in price is not worth the pain of service that I have to go through. So I am willing to, for a few bucks more, pay to stay on American Airlines out of Dallas, not just for the convenience, but for the service, the attention, the creative seating, and all the other benefits of service that it gets me that I don’t feel when I’m at Southwest.

2. Uniqueness

The second is to have a consistent message of uniqueness and value. Why, based on all the competitive alter-natives, would I want to buy from you? That, I believe, is the toughest single question in selling. I think most sales reps have not only a very weak answer to that, they have a very diffused answer to that – where everybody has a different answer. 

There is a test that a manager can do to prove this is a problem. Go up to five different sales people on their team, one-on-one, and say, “You’re the third vendor I have talked to this week about this stuff. Why, based on all the competitive alternatives available to me, do I want to buy with you compared to anybody else?” What you’ll hear as an executive is five completely different answers. 

Now, this brings up a question: How strong is your company brand? I believe branding is predictability – the stronger a brand you can name, the stronger the predictability of that company will be. There’s a predictability to Apple when they come out with something new. There’s predictability to Disney when they come out with a new movie. If you heard that Michael Moore is coming out with a new movie about fast food, you’d know he’ll be beating the crap out of them. Because that’s his brand. 

Branding is predictability, so what happens to a companies’ brand when every salesperson out there selling the company is communicating a completely different definition of what the company is? And then if they do make the sale, the person who is going to support them has no idea how the sales rep sold it, and they have no idea why the customer bought. Every customer is buying completely unique. So look at how this lack of cohesive message is destroying the brand of a company. Because brand name is all centered on predictability. If we improve your predictability, we will improve the perception of your brand in the marketplace.


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3. Improve Best Practices

If I ask an experienced industrial distribution sales person, “You’ve been selling for 10 years, walk me through. What do you do in a new opportunity from the time you identify to the time you close the sale? What are the steps of your selling process?” I will either get no answer from the sales rep, or all they’ll do is identify the steps of the sales call. Well, those are just the steps of a sales call, but a sales rep will define that as the selling process – which is very ineffective because they don’t have a process defined. 

The average sales rep is like a “Hellarewe” bird. It’s a 3-foot bird in 4 feet of grass, and spends its whole life saying “[Where] the hell-are-we?” And a Hellarewe bird is not thinking 32 moves ahead. Everything they’re doing is only based on their next step. So we lay out a selling process, identification to close. If you Google “steps of selling process,” the first three pages only tell you the steps of a sales call. They don’t have a process defined. In fact, the best answer I’ve heard on an airplane from someone I’ve asked was, “We’ve got a four-step process that’s been working for years. First step is the suck-up. Second step is the lie. Third step is to beg and plead to get the business. Fourth step is to drop the price to get the order.” I said, “At least you’ve got a system.” And he said, “And it’s working, baby.” As stupid as that is, that’s a pretty well-defined process.

In selling, that same thing is going to apply – if you have a sales team that is thinking more moves ahead than their competition, they’ll tend to gain a competitive advantage.

4. Active Selling Process Coaching

The sales manager is a selling-process coach, asking how and why questions, and leading a salesperson and team through account planning when they have a new lead – not waiting until a proposal is issued and then helping them to close the business. I believe that 80 percent of the outflow of a selling-process is locked in, is defined, during the first 20 percent of it. But the average manager doesn’t even get involved in the account until the midway point, when the proposal is issued. Look at that major gap. 

So what does it take to gain a competitive advantage today? I don’t know that training all of our sales people on the steps of the sales call would give us a competitive advantage. There’s four levels of selling skills when you talk about ‘How do you improve a sales force?’ When you have a rookie, or someone at 5 years in, they really need help at all levels, but the more senior the person is, the less likely they are going to even listen to you talking about the first two levels.

  • The first level of all sales training is training on attitude and energy. If you listen to Zig Zeigler’s sales training, or even Tony Robbins’, it’s all about attitude and energy: never give up, have a positive attitude, keep working hard, accept a rejection, etc. Tom Hopkins used to teach that if you make $100 on a sale that takes nine no’s for every one yes, every time someone told you no, you made $10. That’s pretty fundamental stuff, but that’s the foundation of all sales training.
  • The second skill is operational. Your operational skills are your personal persuasive skills. Your knowledge of the steps of the sales call, is operational. All the technical, industry knowledge you have are operational skills.
  • The third skill is the tactical skills – best practices and process. What do you do from the time you identify a new opportunity to the time you close on the sale? – that is a tactical discussion. How are you maintaining and supporting your best customers from Jan. 1 to Dec. 31? – that also is a tactical discussion.
  • The fourth level is strategic, which deals with your philosophy, approach, and positioning. Why, based on all the competitive alternatives available to me, do I want to buy from you? Showing someone your line card their line card won’t give you a competitive advantage. It’s going to be: What is your philosophy? What is your approach? What is your brand? How are you going to help us? What happens is, 90 percent of all sales training that’s done in the United States is done on product knowledge. Of the 10 percent that’s left, 90 percent of it is only on operational skills – making you personally persuasive and better at your personal skills.

I believe competitive advantage today comes from tactics and strategy, working on best practices of tactics so we have consistency and replication and improvement. It comes from working on strategy of philosophy and positioning and differentiation.

Jim Pancero is a 33-year veteran in industrial distribution, and the president of Jim Pancero Inc., an advanced sales training and consulting firm. In his tenure, he’s seen the evolution of what it takes to have a leg up on the competition.

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