Positioning For Prosperity: A Dealer's ChecklistBy Christine Corelli
Article Date: 06-01-2009
Copyright(C) 2009 Associated Equipment Distributors. All Rights Reserved.
Use these ideas to execute serious cost-cutting, morale-boosting and business-building change.
Has the economy got you feeling frustrated because there are more downs than ups?
You are not alone. Today’s economic woes have had an impact on virtually every aspect of American business. We hear it a hundred times a day. Everyone is under immense pressure to deal with the financial challenges created by current economic conditions, rising costs, and global uncertainties.
How long will it last? At the recent Material Handling Equipment Distributors Association conference Alan Beauleiu, economic analyst and principal of the Institute of Trend Research (www.ecotrends.org) shared his predictions. He stated that “economic indicators reveal that by October 2009, industrial equipment distributors will see improvement, and that 2010 and 2011 will be better years.” He said the housing market and commercial construction will open up as well.
If he’s correct, and many attendees said he has been “on-target” for the past five years, this is somewhat encouraging compared to what we have been experiencing. So what to do now? Being proactive is the best way to go.
You can’t control what is occurring, but you can control how you react to it. Recessions separate the weak from the strong. They are akin to Economic Darwinism – the ultimate survival of the fittest. In reality, it’s the smartest, most creative, and most proactive distributors who will not only survive, but prosper, when the turnaround occurs.
To rise to the present challenges, distributors have downsized, reorganized, restructured, and retrenched. What else should be done?
Handle the impact of the economy by controlling costs, re-examining your competitive strategy, improving efficiency, and doing whatever it takes to position your business for a more successful future. Challenge the status quo, evaluate all the costs associated with operating in this new environment, and reposition your business to succeed until the economy turns back around. The following are some steps to consider that will help your business survive:
For example, you might consider centralizing job functions so you can operate with fewer administrative people or fewer people overall. Work to create a highly effective and efficient infrastructure for your company that will put you far ahead of the competition after the slump. Do a reality check for every single function in your company. What would be the consequences of not having that particular position? This is a tough job but you have to make tough choices.
- Examine business processes to improve efficiency. Analyze every function, procedure, policy and aspect of your business. Pulling your business apart and giving it an intense scrutiny will help you to find ways to cut costs and improve operations. This is necessary for every distributor, regardless of size or length of time in business.
- Examine the touch points of the customer experience.Take the time to really formalize systems and procedures that work. Determine how you can provide a superior level of service over your competitors and demonstrate a higher level of caring and professionalism. Create the highest standards for customer service and establish “guiding principles” for how your staff will treat customers. Your ultimate goal should be to provide a flawless service experience. Prepare a manual that documents everything involved in customer service so your entire staff has a playbook they can follow to get the right result every time.
- Renegotiate your contracts and providers. If you haven’t already done so, review your costs for insurance, office equipment, phones, uniforms, vending machines, water supply, utilities — any service or product that represents a large portion of your expense load. Ask everyone for a better deal; this includes your banker and health care provider, as well.
Break into teams and reward those who generate the best ideas. Let them know that even little things can make a big difference to your bottom line. Provide a few examples such as shutting down their computers at night, shutting off lights, avoid printing in color when possible, keep heat and air-conditioning at a minimum, go easy on the gas pedal when using company vehicles, and avoid unnecessary driving. You can improve collections by offering contractual incentives for prompt or early payment.
- Enlist assistance to cut costs, avoid waste. Historically, industrial distributors have underutilized employees’ suggestions and ideas. They rarely hold brainstorming meetings. You will be amazed by the creative ideas they can come up with if you make the meeting and the exercise interesting and collaborative. Help them understand that cash flow is the name of the game.
- Boost your marketing and advertising. Cutting costs is a smart move, but not when it comes to marketing and advertising. Boost your marketing and promotions efforts. Failure to do so can impede your presence in the marketplace and lower your chances of acquiring future business. Instead, consider changing the style of your ads so they are different than your previous ads. Make them more eye-catching and appealing.
- Go back to basics and redouble your efforts. Aggressive prospecting is key. Go back to the basics of what you did when you first started your company or took over that sales management position. Spend more time on the phones and redouble business development activities. Your competitors may be asleep at the wheel and are just waiting until the economy turns around. You and your sales team should be the ones to forge ahead. Jump at every opportunity to make a sale, but remember: A sale isn’t a sale until it’s paid for.
Use focus group research to determine what your customers really want. Tap into your creativity to think of what you can do that your competitors are not doing, and then use it to truly differentiate yourself in the market.
- Add value – but make sure it is worth it. Don’t make the mistake of thinking that throwing something in for free is adding enough value to impress customers. Create a value-added offerings package or program that will make your customers say “Wow!”
- Assist key customers in every way possible. Work with key customers to assist them any way you can in the downturn. Reach out to them and show them you care about them. Show them you understand how their business has been affected. For example, help them to manage and maintain their existing equipment more efficiently to help reduce their costs. This is critical to do during tough economic times and will help you protect your turf when competitors attack, and build customer loyalty that will repay you when the economy rebounds.
Continue to hold customer events. Better yet, have an event that includes your customers and your sales team’s families. This will not only help make customers and employees feel like family, but also build customer and staff loyalty. In addition, it will also demonstrate your company’s staying power. Be sure to invite your “A List” of potential customers and their families to these events. To inspire your sales team, give a cash award to the salesperson that brings in the most prospective customers.
- Show customers you appreciate them. Make sure your customers are made to feel important – very important. What has your company done lately to show your customers that you appreciate them?
- Reconnect with past customers. Make queries to find out more about their present situation. If they were customers in the past, there is a good chance that they can be customers again. Never give up the opportunity to bring them back into the fold.
Don’t keep employees based on length of service. Instead, determine the value each person is providing to your organization at the wage he or she is being paid. Hard as it is, eliminate anyone who might hold your team back from success. Then, do everything you can to retain your top performers – provide them with small rewards and give them big recognition. You can’t afford to lose them.
- Get your house in order. Evaluate your entire staff. Who are your high contributors and long-term players? Who are the best team players? Who works best with customers, employees, and business partners? Who best fits the vision of what you want your organization to be and where you want to go? Who can “play more than one position?”
In addition to product safety and technical training for your technicians, provide leadership, communication, teamwork, and customer service skills training to everyone in the company and make sure these skills are applied.
- Training works for athletes – and for distributors. Ironically, at the very time when they need it most, many equipment distributors have taken training out of their budget, viewing it as an expense rather than an investment in the future. While it is important to control expenses, training is an expense that affects employees’ skills and knowledge. Training builds organizations. Sales increase. Mistakes are avoided. Productivity is increased. Morale is improved.
Set achievable and ideal goals for sales. Inspire your sales team by showing them the commissions they will make instead of the figures you want them to hit. Be accessible to them and help them to close sales. In addition, ask them to identify ways the entire company can better support sales and dramatically improve customer service.
- Define your culture: Everyone is in sales. Make it a major strategic initiative to radically transform your culture into one of “sales-service excellence.” Review your core values and establish “guiding principles” on how everyone should demonstrate the values of honesty, integrity, teamwork, respect, customer focus, accountability, excellence, health, safety, family, and social and environmental consciousness, and your other core values.
- Check your leadership mirror. Remember whose job it is to keep your staff motivated through challenging times: Yours! It all starts at the top. Display dynamic leadership. Set the example for cooperation and service excellence. Treat your employees as well as you treat your best customers. Demand the same of all managers. Adopt a “Zero Tolerance for Bad Bosses” policy in your company.
- Visibility is as important as ability. Attend your industry trade show. Take advantage of the excellent networking opportunities it provides to form relationships with peers, suppliers, and industry experts. Often, the strongest relationships are formed during tough times.
- Go Green! Until now, companies that took an active interest in environmental issues were few and far between. But wise companies realize that protecting the environment is a very real concern to the general population. If distributors want to attract the increasingly environmentally conscious market and gain a competitive edge, they must become known as an eco-friendly company. Distributors who move quickly to become part of the solution in helping construction companies meet regulations will stand to profit. In addition, those who adopt green practices in their own facilities will save on energy costs. The green movement is not going away. Appoint a Green Team to get you going.
- Invest in technology and equipment. Use technology as the driver and the tool for business growth, increased productivity, improved communication and connectivity with customers. If your software is more than five years old, it’s time to upgrade. There are new and affordable technologies being created every day that can make a big difference in your bottom line. Obtain assistance from experts on technologies that will best suit your needs.
“The real secret of success is enthusiasm.
- Don’t let the economy steal your enthusiasm. If you lose your enthusiasm, your customers and employees will sense it. When the economy is down, you need to be up. I like what Walter Chrysler said:
Enthusiasts are fighters.
They have fortitude.
They have staying qualities.
Enthusiasm is at the bottom of all progress.
With it, there is accomplishment.
Without it, there are only alibis.”
If you are exhibiting a “survival” mentality, change it to a “positioning for prosperity” mentality.
Bottom line: There is no more “business as usual.” Execution, taking action, must be a strong part of your prosperity strategy. It will give you the staying power you need to meet the current challenge – and come out ahead.
Christine Corelli is the author of the popular books "Wake Up and Smell the Competition" and "The Art of Influencing Customers to Buy from YOU." She has been a popular presenter at past AED events, and has helped numerous equipment manufacturers and distributors in the areas of sales and service excellence. To learn more, visit www.christinespeaks.com or call 847-581-9968.
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