At some point, the tumult we’ve been experiencing over the past six months will be behind us, and we’ll all be focused on growing sales and profitability once again.
Are you set up for the rebound?
After all, the trends we were seeing before COVID-19 have only accelerated in 2020. Outside salespeople can’t visit many of their customers and are engaging remotely. Online retailers are reporting record sales and going on hiring sprees while everyone else is laying off and furloughing employees. Manufacturers are passing along sudden price increases and COVID-19-related fees.
Add on top of that an ongoing race to the bottom on pricing, an improvement in supply-chain efficiency and continued consolidation. And don’t forget the Internet rising as a primary source of product and application information.
Is your sales organization in February the same organization that you want as you rebuild? Or should you take this opportunity in the midst of disruption to restructure your sales force?
A lot has changed since 2000. But many distributors, anchored by the traditional sales rep role, haven’t changed their sales structures to account for the growth of new channels with lower cost structures and decision-makers who grew up in a digital self-service world.
What’s the best sales structure to meet your customers’ needs?
Will your current sales structure work when everything returns to a “new normal”? Chances are you need to make some changes.
Distributors have far more access to data than they did 20 years ago. Leverage customer analytics, including geography, market segment, service output, travel required (which has also changed), how reps are spending their time and so on to realign your structure to meet customers’ needs. Usually, more than 20 percent of accounts assigned to an outside sales rep can be moved to another lower-cost function, such as inside sales, customer service or even an online self-service solution.
A field sales rep’s role should be focused on new business development and demand creation. But it’s likely your field sales reps are completing tasks that should be done by a lower-cost resource, including delivering product to customers, creating quotes and checking price and availability with vendors.
Successful distributors are adding dedicated customer service reps, product specialists and quotation departments to narrow the field sales rep’s responsibility and reach more customers more cost-effectively. Some distributors have also allowed field sales reps to visit customers when needed but use other remote methods as their primary means of customer engagement. The field sales role that remains is no longer defined by a set of assigned customers but based on where they are required to protect marquee customers and able to move the needle on growth.
This market-based model is more efficient and effective, and allows you to provide better customer service and market coverage while also realizing a lower cost to serve. Key customer-serving responsibilities are unbundled from demand creation with skill sets most appropriate to each allowed to specialize on what they do best.
With all the disruption we have been facing, now is an excellent time to explore these possibilities.
Mike Emerson is a Partner with Indian River Consulting Group. Mike has worked with hundreds of distributors and manufacturers of all sizes and within many lines of trade. Contact Mike at firstname.lastname@example.org, call 321-956-8617 or visit ircg.com.