Santa Shares All…. Six Lessons for Distributors

For those of you who don’t know, Santa Claus and I have a special relationship. It began way back when I was still knee high to a short elf. It seems my grandfather, who was a jolly sort of guy himself, was somehow connected with Mr. Claus. Imagine being 3 or 4 years old and learning Grandpa and Santa were buddies. Special feeling? You bet. I knew it was real when Santa greeted my Grandpa with, “Hey Red (my Grandpa’s nickname,) how late did you stay down at the Eagles’ Club last night? If they weren’t pals, how in the world could this jolly red suited man know these details?

Santa knew me by name, too. Really! And since that day back in the early 60s, Old Santa and I have enjoyed a close and special friendship. According to Santa, yours truly has managed to make the “nice” list for 5 of my 62 years, but this story is not about me. It’s about distributors.

During a slow point down at the local mall, I managed to grab a few minutes of the jolly old elf’s time. After our normal greeting and a few “Ho, Ho, Hos, Santa took me aside and asked me to share a few pointers with my distributor friends. It was an “everything important in distribution can be learned from Santa” sort of moment. Rather than blast out with bloviating reindeer breath, let me pass on six of Santa’s lessons.

Lesson 1: Segment your Customers
Santa said he learned this lesson some 500 or so years ago. Once he started segmenting his customers into groups, naughty and nice, business picked up. Today, Santa’s North Pole organization carefully tracks customer behavior and provides services accordingly.


Santa believes distributors must understand customer demographics too. The customers, who value your service, buy in the right quantities, display the right kind of buying behaviors and allow you to make a profit, deserve extra nice treatment. Santa and his team of elves carefully insure the “nice” boys and girls get better treatment than the rest. Simply put, distributors can dive more profitable business if they target the right customers.

Lesson 2: Build your own unique brand
The red suit and eight tiny reindeer shtick is part of the whole North Pole Brand. Flash a picture of a slightly overweight guy dressed in a red suit with white fur trim and kids anywhere immediately recognize the brand.

Even Coca-Cola knocked
on Santa's door

Santa and his team of marketing elves first came up with this whole branding deal back in the 1600s. Since then, dozens of marketing gurus came knocking on the North Pole door; each proposing a different strategy. On a side note, you can only imagine what would have happened if Santa would have taken on that Paisley Nehru Jacket pitched sometime in the 1960s. Thankfully, Mr. Claus avoided the temptation of flipping his branding message.

For distributors, this means understanding what you’re known for in the marketplace and carefully advancing the message. Are you known for having a larger stock of hard to find items than your competitors? Is your team more tuned to technical support? Are you good at solving logistics issues? Is your counter more knowledgeable than those of your competitors? It’s time for distributors to stop relying on their supply partners for branding. In the future, distributors must understand what they’re known for and advance the message. It develops a strong and loyal following who are willing to partner.

Lesson 3: Adapt to changing customer styles
When Santa first started up, things were different. Boys and girls were known to whisper their Christmas wishes up the open chimney hearth. Santa had thousands of elves employed at listening posts. It was mostly tedious and time consuming work. Later, the kids wrote their wish list on a piece of paper and tossed it in to the fire with the hopes that Good Saint Nicholas would somehow read their smoke signals.

For most of us, an annual letter to Santa was something of a

tradition. But today, Santa receives requests via email, instant message, phone calls, and the traditional “snail mail." Along the way, Santa has constantly upgraded the way he monitors and processes these incoming orders. He's had to shell out some big bucks on technology and training.

Today, distributor customers communicate in ways unheard of just a decade ago. Inside sales teams receive faxes, emails, and EDI communications at the speed of light.

Santa, who keeps abreast of the younger generation, believes some distributors have missed out on the trend toward communications via instant messaging. Applications currently exist which allow customer instant messages to appear on the inside sales team’s computer screens. This gives customers a new way to communicate with the team and allows inside salespeople to handle multiple customer requests simultaneously. Further, as customers move toward faster and more sophisticated devices, the jolly old elf believes the trend will grow.

While we’re on the subject of mobile devices, distributors need to evaluate some of the applications designed for speeding up customer selection of products. Santa tells me that he is working on a new “app” for next Christmas.

Lesson 4: Don’t forget your warehouse
It’s no secret that Santa operates from a single central distribution facility located in a remote part of the world. One would expect that this could be a disadvantage to the fat man and his organization. However, over the years, Santa has refined his delivery mechanism in order to meet customer needs. North Pole warehouse is equipped with all the modern material handling and tracking tools. Each year literally millions of Red Rider BB guns, electric trains, Easy Bake Ovens and dolls are delivered accurately and on time.

Santa asks distributors to take time to ask how their warehouse today differs from the warehouses of 1983. Does your system employ barcoding, part location, wave picking, or any of the tools which allow you easier throughput and cheaper warehouse operations?

Lesson 5: Never say no
Santa has developed a customer service plan second to none. He has trained his team of salespeople (dressed in Red down at the mall) to never say no. Instead, they say, “Santa will have to check.” There’s a big difference.

One of Santa’s distributor friends (a guy named Jack) once told me this: “I never say no, I just ask; how much you would be willing to pay to make it happen?” Distributor sales and customer service people need to be trained to offer options when the customer’s original request can’t be met.

For instance, if a customer asks for a part that’s not on your line card, do your customer service reps say “we don’t have it?" Would it be better if they asked if a substitution can be made? While this doesn’t seem like “reindeer science," it does provide your organization with additional sales opportunities.

Further, if the customer would like to have something sold by a competitor, do you have a plan? Some customers want you to take ownership of the issue, regardless of cost. Santa thinks that’s a cool concept.

Lesson 6: Understand the cost of services
Finally, Santa wanted to point out the rising cost of value-add services. For eons he assembled dollhouses, set up elaborate train sets and put together back yard swings. It was pretty cheap to do this back in the 1960s. Even though the elves and reindeer work for carrots and peanuts, he has been more reluctant to put things together in today’s business environment. Health care benefits are spiraling out of control up north too. Instead, Santa pushed the work off to the moms and dads of generally good girls and boys.

He will still set things up for the really, really nice kids; the ones who never (ever) pout or cry. The medium nice kids have to pay for services and I don't mean in cookies.

Santa thinks distributors, now more than ever, need to understand the cost of the value-add stuff they provide. As a matter of fact, Santa took time to make one last point. The great bearded one strongly recommends that distributors everywhere read Frank Hurtte’s The Distributor’s Fee-Based Manifesto. He won’t be placing this book under your tree because he still remembers that incident at the golf outing last summer (Santa really does keep track of these things.) Naughty and nice applies to everyone.

Even the naughtiest distributor can order the book in time for Christmas. It’s on Amazon.

Now a word from Santa’s longtime friend and veteran of five seasons of niceness:
December is a joyous time of year. Whether you celebrate Christmas (I do,) Hanukkah’s Festival of Lights (many of my friends do) or anything else, I hope you are blessed with time for friends, family and fun.

And, my Grandpa and Santa really were close friends.

Frank Hurtte, Founding Partner of River Heights Consulting, speaks, writes and consults on distributor issues. He can be reached at frank@riverheightsconsulting.com.
Santa has him on the “naughty list” again.

Santa on Selling

Santa in 1881 by Thomas Nast

Everyone knows Santa Claus. Red suit, long white beard, familiar laugh and long-time leader of all things North Pole. For some strange reason, most don’t have a clue as to the early days of his career. So let me break it to you, Santa got his start in sales. A long time ago, hundreds of Christmases before occupying the big chair in the corner office up at the North Pole, Santa worked on the selling side of North Pole Distributing.

Like many hardworking sales types with hundreds of years under his belt, Santa leveraged all the lessons learned in his territory to move up in his organization. Playing a front and center role in a global distribution organization with customers around the globe, Mr. Claus puts those lessons to work almost every day.

It’s difficult for a lowly industry consultant to get an audience with big time executives, but last week I leveraged over six

Photo Credit: GM

decades worth of being on the nice list to score a rare opportunity to speak with Santa in his North Pole office. I wanted to impress. So, rather than humdrum questions – the kind most people ask – I set out to do something different. Skipping over the normal topics of reindeer care and feeding, keeping the Elves busy in the workshop and the naughty and nice kids’ lists, I asked Santa about early lessons from way back in time. Those old days when he was a rookie sales guy for The North Pole.

Here are the highlights of our talk. Whenever possible, I am using direct quotes from the Jolly Old Elf himself.

Santa on Targeting:
You know Frank, I share your views on targeting. Years ago, we here at North Pole Distributing decided we couldn’t do everything. You call it targeting, we call it the naughty and nice list. There are just too many kids out there for us to deliver presents to everybody. So, we started what the elves call “the list.” We do our best to take care of the nice boys and girls and let the naughty ones get their presents somewhere else. In the past couple of hundred years, we’ve further refined our customer-base to exclude moms and dads. You may have noticed that sometime back in the 70s we took you off the list because, well, you were just simply getting too old.

For some it doesn’t make sense, but the North Pole Distributing team is devoted to providing the best of service to a targeted group of customers. They love us, we love them and it helps us do a better and more efficient job.

Santa on Customer Service:
The whole North Pole organization thrives on providing the best customer service on the planet. For as long as Ole’ Santa Claus is sitting in this chair, I have stressed the importance of getting the right toys to the right girls and boys on Christmas Eve. It’s our mission, vision and creed all rolled into one. The Elves sometimes get sick of hearing me say it. But every time we break for chocolate and cookies, I feel compelled to bring up customer service as Numero Uno. Every break in a reindeer game, Rudolf and his crew hear me retell the story. On time delivery is only part of customer service. There can be no disappointments.

Santa Says Under Promise and Over Deliver:
Remember the time you asked for an Electric Train way back

when the Kennedy lived in the White House? I can still recall. You and your grandpa dropped by my shop and you looked old Santa in the eye and said, “Santa, I have been good. I brush my teeth, do my homework and I am nice to my little brother. Can I have an electric train?” Remember what Santa said? I told you, we’ll see if the elves can come up with something like that. I learned that approach back when I was a seller. I knew the elves were running behind on train sets and I knew your parents were planning on buying you one for your birthday on January 23rd. Seems like I brought you a really cool sled that year, and since the snows were waist deep to a tall Elf, you had tons of fun. That’s how the North Pole works; under promise, over deliver. Even though you didn’t get that train set, you were all smiles with the sled.

Santa on Tracking Customer Data and CRM Systems:
Up at the North Pole, customer data is king. Or at least right after Santa Claus, it’s king. We’ve been doing the naughty and nice list for eons now. Back when we started the practice, it was all paper. Lots of manual entries, teams of elves checking the lists and then checking them twice. In our business, knowing who’s naughty and who’s nice is pretty darned important.

I started the practice back when I was handling the small Schleswig-Holstein territory in Germany. I was struggling to remember all the kids and their behaviors and Mrs. Claus suggested writing a list. In retrospect, she was questioning my memory way back then; that’s how loving spouses can be. It turned out to be a great idea so I brought the entire

concept to the North Pole. Over the years, we’ve fine-tuned it and a few years ago, one of the elves in our computer department modernized the whole thing. We never miss a naughty or nice and never need to check things twice.

My time was short, Santa and his Elves are pretty darn busy this time of year.
Just like back in the old days, my time with Santa just zipped by. Our scheduled hour seemed like just a couple of minutes. Along the way, he pointed out when I almost slipped onto the naughty list, mostly for fibbing, but somehow I managed to stay in Santa’s good graces through all these years. As the time was ending, I asked Santa if he had any final words for the good girls and boys across distributor-land. Here are the Jolly One’s final words…

Enjoy your Holiday Season…
Make Merry with your Friends

and Family…
Make plans for a Happy 2017…
Ho, Ho, Ho….

Authors note: Santa and I have enjoyed a special relationship through the years. Based on the way they talked about things going on down at the Eagles Club, it seems my Grandpa was a close, personal friend of Santa. My own grandkids have noticed that I know Santa too. Hopefully, you haven’t lost touch.

Kris Kringle’s Executive Meeting

Kris called a meeting with his top elves. These were the folks, assuming elves count as folks, who have had centuries of experience filling Santa Enterprises’ magic bags to the brim for all the nice girls and boys. And, as Kris thought back, this team had never missed a single Christmas. Through massive snow storms, candy cane shortages and even the great reindeer food shortage of 1954, they always came through; never, ever missing a single good little boy or girl.

Even though he was madder than a wet reindeer, Kris sent a politely worded invitation to the new elfin expert down in procurement, a certain Elf Pricedrop.

Please be aware Santa Enterprises hadn’t held a meeting in December for eons. Kris believed in Santa. Under his magically jolly leadership style, the top elf in every workshop was empowered to make their own decisions. These elves believed in Santa too. This is the busiest of seasons, so no one was taking this gathering of top elves lightly.

The meeting was scheduled for 8:15 North Pole Time. And as the various elf types started entering the big conference room, the mood was different than normal. And, while the room was dressed in tinsel, garland and glistening lights, the atmosphere seemed a lot less than cheery and bright. Even Elf Buddy, the jokester of the group, wore a solemn look. The ever present plate of warm cookies, milk and hot cocoa sat on a side table, but not even Elf Mary, who leads up Mrs. Kringle’s kitchen, nibbled on one.


At promptly 8:14, Kris Kringle and his faithful companion Rudolf entered the room. Even Kris’ entrance seemed off the norm. Generally, Kris arrived at the meetings early. The Kringle approach called for elfin small talk, sharing a hot cup of cocoa and the bright light of Christmas time anticipation. One elf was fond of saying, Kris’ magical presence filled the room like a barrel full of Ho, Ho, Hos. But not this time.

As the big old-time grandfather clock struck 8:15, Kris stood up and began to address the group. He said, “After nearly two thousand years of operation, we face the biggest crisis ever faced by Santa Enterprises. We are critically short on parts, a couple of our toy making machines are completely broken, and we are less than two weeks from Christmas Eve. We stand to single-handedly ruin Christmas for tens of thousands of good girls and boys.”

Instead of punctuating each sentence with a “Ho, Ho, Ho,” all the elves could detect a strange crack and a touch of a tear forming just above Kris’s big bushy white beard. But, Kris continued onward, “Our list of the Nice Boys and Girls is 
massive. These kids have been on their very best behavior and all of them expect Santa to deliver their packages on time. You are my most trusted elves. Together we have solved some mighty big problems. We can’t let this Christmas Season go down as the year Santa didn’t show up. I am opening the floor for suggestions. What can we do?”

Almost immediately, the new elf from procurement, we’ll call him Elf Pricedrop jumped from his chair, stood up, primped his fancy tie and adjusted his finely tailored jacket. “We’ve made a lot of major improvements in the way we do things. We are doing business with some of the top suppliers on the planet. The work my team has streamlined the way we handle our orders. We’ve saved Santa a bundle. Why, aren’t the rest of you holding up your end of the bargain?” he complained.

Based on the look of the rest of the top elves, Elf Pricedrop’s words were going over like a North Pole snowball to the face. Kris Kringle asked for more feedback.

Elf Evergreen, whose record at the Major Toy Shop was legendary said, “Our toy train machine has been broken or running at half speed since the end of October. We’ve called our new supplier a dozen times and the best they can do is email us an updated user’s manual. The shipment of wheels for the toy cars was supposed to be here two weeks ago. The vendor says they are working on getting us some, but not until two days after Christmas. And the new internet-based guy you procurement types have sending us red paint for the fire trucks isn’t answering emails or the phone.”

Elf Mary Sugardrop from Mrs. Kringle’s kitchen joined the discussion, “The candy making has ground to a halt because the sugar plums that give everything a unique Christmas-time flavor has a strong hint of spinach. We wouldn’t even send this stuff out to the naughty list.”

Elf Pricedrop stiffened in his chair as one by one the elves doing the real work listed issues with his new crop of low cost and efficient suppliers. Finally, he said, “Every new system has a few bugs to work out. We have saved so much money on this we can afford experts to fix things and life will be good…” But before he could finish, Kris waived his magical hand. Silence. Then the big guy spoke:

“We don’t have time to fix things. We can’t postpone Christmas. When Christmas Eve rolls around, it will be now or never. And, we’re not going to disappoint anyone. Not while I still have a single ounce of life left in this formerly jolly body. Failure is not an option. Anybody else got an idea?”

The only elf yet to talk was Elf Alabaster Snowball. Unlike the other elves present, his work didn’t revolve around making toys. His department maintained the famous Naughty and Nice list. He was both the most stern and jolliest of all the elves. Good girls and boys brought out the jolly side. And, well let’s just say, the naughty list put him in a pretty nasty state of mind. When he spoke, the other elves listened. Here’s what he said:

“I’ve been reading a lot about knowledge-based distributors. I kind of stumbled onto them because I like to keep an eye on that Frank Hurtte guy. You know, according to our records, he has been on the good side of the naughty and nice list for over 50 years. And, if you skip over that little pouting spree back in 1962, he would have an almost perfect record. According to him, solution based distributors have some magic of their own.”

Elf Pricedrop protested, “I believe in the old motto, eliminate the middleman and save. We’ve worked hard…” Once more Kris Kringle stopped him dead in his tracks and said. “I believe in Santa. You can stuff those old B-school sayings in a sock full of lumpy coal. We’ve got to save Christmas, how do we get these guys to help? Get Frank Hurtte on the line…”

A note from the author: I told you I always turned out to be the hero of the story. I can imagine some of you were shocked to learn that I have been on the nice list for a half century. What can I say, Santa and I go way back. Join us next week when we introduce the real heroes of the story – Distributors just like you! Maybe Santa Enterprises will bring you something nice; regardless of your behavior.

Purchasing Problems at the Pole

'Tis the season. When my daughter was young, I loved telling her stories. After a while, I got tired of the classic princes kisses frog and lives happily ever after kind of tale. If I had to make them up, why not make the sales guy the hero. For the next several years, my daughter heard a collection of tales where bad guys in business suits were fed to hungry dragons and purchasing types turned into frogs. This year we are determined to spin such a tale. Trust me, there will be a happy ending.

Talk about seasonal surges, Santa’s North Pole Enterprises experiences the largest single seasonal surge in any venture, anywhere. It calls for dedication, it demands expertise and it demands for some really fancy footwork during the last days of December. As President and CEO, Kris Kringle has seen some changes. Quoting him directly: “Back in the old days, most of the goodies we delivered to the good boys and girls were made of wood. We simply chopped down a few trees, brought in the elves and got busy. Our only problem came with dull knives and handling all the wood chips.” But things have changed.

The assortment of requests from today’s children runs the gamut of modern manufacturing technology. Christmas requests include everything from cute little dolls and toy soldiers, which are mostly hand crafted, to elaborate plastic works and electronics. The parts and pieces to make all of these grand presents come from literally all over the world. Kris and his Santa Enterprise team learned the value of working with distributors back when grandma and grandpa were kids. For decades, Santa Enterprises would select the very best distributor salespeople and magically pull them to the North Pole Headquarters to work on plans for making the big day go smoothly. That is until last year.

Allow us to relate the story.

Kris and Ms. Kringle were taking a few days off in January. To protect his privacy, we won’t disclose the exact location. Instead let’s just say, there are warm beaches and the natives often ask, “Would you like another taco Senor Santa?” Anyway, Kris and misses are out on the beach and when a slick talking guy with a shark skin suit and a B-School background approaches. After a few minutes, Kris is hearing the power of aggressive purchasing and getting an earful of cost savings data.

Quick as a wink, and without looking into a couple of decades old naughty and nice lists, Kris decides to bring in a new style of vendor management. Once onboard at the North Pole, the new Elf in charge of purchasing launches into massive cost analysis and sets up a new plan for buying supplies. Using a moto called “Hey, we’re helping Santa,” the North Pole goes on a cost cutting spree. Reverse auctions uncover a whole new rash of untested suppliers with low price and flimsy service. Banners wave at every North Pole workshop, each one carrying a bigger savings claim. But, the workers were noticing a change.

The elves at the woodshop got wood that wouldn’t carve. The doll shop reported cute little dollies with no eyes and two left hands. They held meetings, the big shot elf in purchasing spouted larger savings and the new suppliers promised they would get better. For a while even Kris was nodding along with all the propaganda.

Then the cold winds of winter started whipping through the North Pole. The countdown to Christmas Eve had hit twenty days. Santa Enterprises was in a pinch. The shipments from the new batch of suppliers were running a “little late.” Looking over the situation, Kris realized a little late would have him delivering toys sometime in mid-January. Christmas Eve really could turn into a “Silent Night.” The Santa reputation for delivering the goodies to nice girls and boys would be gone, gone, gone; price savings or not.


Kris was hot. And, when a jolly guy like him is upset, people pay close attention.

Stay tuned…