Sales Training for Distributors – Don’t forget Inside Sales

Last week I threw out some thoughts on sales training for distributors.  The response was great, but I received more than a half dozen challenges from inside sales groups.  The overall feedback could be summarized as: Don’t forget about Inside Sales. 

The comments reminded me of a couple of points:

• Outside Sale people may make the phone ring, but it is the service the customer receives when they call that keeps customers coming back (aka customer retention).
• Most customers gauge Distributor customer service by the quality of the Inside Sales team.

Historically, distributors have focused on outside sales improvement…

Experience shows when distributors invest in skills training (which is meager at best,) they tend to focus on the outside sales position.  A quick “Google Search” on the topic of “distributor sales training” brings up something like 28,600 results.  While I didn’t read all 28 thousand of them, I did look at the first twenty listings.  All were outside sales related.  Assuming that training organizations follow the money, we can assume there is darn little effort devoted to the team who keeps the customer calling and by which our customer service is often judged.  Houston, we have a problem...

Inside Sales was once a baby step in
the trail to Outside Sales

There are three potential reasons for this lack of investment in inside sales: 

1. Back in the good old days, inside sales was viewed as a stepping stone job for outside sales.  The career trajectory for most people looked something like this: start in the warehouse, move to the counter, go to inside sales and finally grab a company car and hit the road.  Compensation for inside sales people was meager and anyone who stayed in the department was viewed at lacking in personality, drive, motivation or intellect.  You might say the good old days were not so good for the inside team.
2. Most of the sales managers serving the distribution world grew up in the outside sales world and don’t understand the inside sales role well enough to realize what training should be focused toward.  They realize the need for training but tend to see it as a subset of the training they provide for outside sales people.
3. Again going to distributor sales managers, most grew up in a pre-internet environment.  Only the most progressive managers realize selling roles have shifted.  Customers no longer count on their outside sales person as the harbinger of information.  Research indicates customers review products, find information and make preliminary decisions without waiting for data sheets to be delivered by their friendly outside sales resource.

The job of inside sales is changing…

Just a decade ago the job of inside sales centered on transferring phone and fax orders to computer system (ERP) orders, answering questions on delivery and selecting the proper part number from a customer’s detailed description.  All good stuff for the time, but nothing like today.

The end of these activities is on the horizon.  New computer technology allows orders entered onto customer PO forms to be automatically entered into the system without human interface.  Further, some of the product selection criteria has been automated or moved to mobile apps allowing customers to better determine the proper catalog number (even in instances where complex part number strings are involved.)

Today customers look to inside sales for more.  For instance, for most distributors, the first line of price negotiations has been switched to the inside sales team.  Front line technical support falls on to inside sales to do some logistical matters like expedites, freight issues and invoice clarification. 

Provide world class technical support and you will attract customers.

How do we train for customer support?

If your companies sells highly technical products (Programmable Controllers, computerized operator interfaces, complex sensors, drives or irrigation controllers, programmable heating systems, etc.), we recommend establishing an inside specialist(s).  This person would be the phone resource for customers with urgent issues. 

The inside specialist need not be a new hire.  We have seen companies delegate slices of their technology to individuals with keen interest in the products.  This will work well assuming the person is not overloaded with other tasks. 

But product support can be taught.  First, let’s assume customers commonly ask the same set of questions.  Identifying these questions and training on the answers grows the overall support.  Rather than being tasked to learn everything, inside sales is taught to understand the 20 most commonly asked questions on the product. 

Further, inside sales is taught a plan for escalating the call to someone more knowledgeable.  Years ago, my own organization created a “who to call list” which allowed the inside team to access factory and internal experts on various topics – but not until the problem was qualified.

Train for add-on product sales…

The most powerful marketing tool in history is McDonald’s

own, “Would you like fries with that?”  Sure, everybody knows Mickey D’s has fries, but just prompting the customer with the question turns a five dollar order into a seven dollar ticket (a 40 percent sales boost not considering fries have a high gross margin for the company.) 

Many of our computer systems (ERPs) allow the addition of suggested sale or “goes with” products.  We need to reinforce the importance of both populating the system and training our people to remind customers of products they may have forgotten.

Proper pricing can improve the inside sales role.  First, without a well-developed pricing system, inside sales teams devote lots of time looking up last prices paid and checking on price levels with their outside sales counterparts.  Inside sales should be trained to spot poorly maintained price files and provide the feedback required to get these fixed.  Second, inside sales people should learn a few basic negotiating tricks to avoid being “duped” by procurement professionals who have been trained in the science of negotiation.  If you have not yet see the information provided by Strategic Pricing Associates or their sister company SPASigma, we recommend you check out this really funny video.  

Again a special offer…

Last time we offered a postcard from Iowa to everyone who shared their suggestions for sales training with a grand prize of a professionally developed training class set up to be shared with your team.  We are repeating the offer.  No obligation, no telesales calls, no nothing.  Everyone will be a winner. 

Postcards from Iowa for every entry.

Free Sales Program to the coolest suggested subject.

BTW –Sue from California was our winner last time.  Sue claims she had never received a genuine postcard from the Tall Corn State.  Sue, we expect more entries.  The USPS wants to bring you another card.  

Are you a Solution Seller, or Did You Stumble into the Buzzword Trap?

Buzz words bug me. A decade or so ago everybody suddenly became a “value-added" sort of guy. Every salesperson I talked with for more than 20 seconds managed to find a new place to insert the words “value-add," yet most couldn’t define the value they were adding. Even fewer had any idea as to the worth of their “value” to the customer. And, only one in every thousand could manage to prove their value in dollars and cents.

Long ago we suggested a break from the whole value-added selling hyperbole and laid out a plan for value-metric selling. You can read what I said back in 2011 here. 

Value-metric selling added definition and focus to the extra services distributors provided along with their products. We suggested then and still believe providing services or some other value to the customer equation without thinking (or at least considering):

• Does the customer even want the service?

• Does the customer place any value on the service?

• Is the value the customer places less than or greater than the cost to provide the service?

• How much would it inconvenience the customer if the service was not available?

• Can the inconvenience be measured in monetary terms?

• How much does the service cost us to perform and are we making enough gross margin to cover our expenses and still make a profit?

• Should we be compensated for the service in some way above and beyond the gross margin generated by the sale?

Sorry I may have gotten carried away. 
Let me step down off my soapbox and blast another distributor buzzword:  Solution Seller.


Just like “value-added” from the turn of the century, “solution selling” has developed a life of its own. Even the guy who sold my wife a new Buick tossed the phrase out a couple of times. And, with no intention of bashing an otherwise great sales guy, he really wasn’t selling a solution. He was there to sell a vehicle (and I played a cameo role as the evil purchasing guy negotiating the deal.)

The point of all this is to define what might actually be a solution sale and perhaps the various degrees of solution selling. Below is a graphic derived from The Challenger Sale: Taking Control of the Customer Conversation, which is a book I highly recommend. Let’s walk our way down the road from product seller to solutions seller with a few comments along the way.

Pure product sales
Don’t get me wrong there is nothing wrong with selling a product. Strangely, it has been my experience that solutions only guys in the world of engineering services daydream of a time when they can sell a product. Product sellers are often educated in not only the major nuances of their products but in trivial features as well. Constantly on the vigil to avoid commoditization, they often know precisely why their product is better than a dozen or so competitors.

Silo based product sellers develop such in-depth expertise on a given technology or product set they are sought out in the market place. Great examples for the retail world might be the camera stores of days gone by, where the seller knew every factoid imaginable of the topic of cameras. Customers were attracted to the knowledge and purchased accordingly.

In the world of industrial automation a number of silo based sellers have emerged centered on expertise in Programmable Controllers (PLCs), electronic drives, motion control and machine vision. Further, I believe the value each of these silos has diminished over time as the general population of the market has learned the product. The camera stores have largely gone away and I believe there is very little/limited future in being a silo-based product seller.

Product bundling provides customer convenience. Supermarkets provide a form of product bundling. It is quick and easy to do “one stop shopping” but I am not entirely certain the practice ranks high on the solution scale. Taking the whole thing one-step further, I wonder how many distributors providing this bundling practice still struggle to get their inside sales teams trained to the point of making the right product suggestions? One would imagine this would be an advancement in product bundling.

A quick review of our industry demonstrates most of those claiming to be solution sellers are actually wrapping advice and service around some product group. Definitely some solution work going on here, but the practice seems as if it could easily be challenged or replaced by another competitor.

Hopefully you see the escalation of quality of the solutions. Along with each step, comes a bit of competitor proofing. The more advanced the solution, the greater the value to the customer.

Time and space here does not allow me to go into each of the various levels of solution selling. You can look into these as you move forward. However, there are a couple of points you should consider:

• Customers are willing to pay more for solutions that increase their ability to make more money, so understanding your value is even more important.

• Advanced solutions are customized and developed specifically for the customer.

• Advanced solutions make you competitor proof.

• Finally, salespeople who master the solution sale have been proven to be nearly three times more effective than the average seller.

Amazon: Best Friend or Worst Enemy?

Bad advice disguised as a how to compete against Amazon article

Vultures circle high overhead.  Stumbling,

struggling, maybe even crawling way down below, we see the cadaverous body of the wholesale distributor.  The experts are once again predicting the demise of distribution.  Unless we heed their costly advice, our lifeless corpse of an industry will be served up as carrion caviar.  And the folks at Amazon will dance a merry jig around our tombstone.

It’s not too hard to imagine the advice these guys are tossing out.  Spend money on building your own e-commerce site.  Hire them or their company to assist you in growing your very own mini-Amazon. 

For our kind of distributor operation, this is a terrible recommendation. 

What is our kind of distribution?

A few years ago I coined the term “Knowledge-based distribution” to describe our type of business.  In this knowledge-based world, we sell a bit of our expertise with every brown box headed out the door.  Depending on the products on your line card, this could be engineering support, start-up assistance, internal logistics assistance, parts kitting or integrated solutions with parts from several manufacturers tied together to solve the customer issue.  We work hand-in-hand with our customers to establish production, maintenance or other long term strategies.  This is a far cry from logistics based wholesalers who basically toss product over the wall to their shipping departments.

If we play the Amazon game we will lose.

Think about this for a moment.  Amazon is investing hundreds of millions into their internet-based platform.  For the purposes of this discussion, we did a quick review of spending for online capabilities.  Amazon didn’t break out their budget, but their biggest competitor in this business, Grainger, reported spending $40 million for online spending in 2012 alone and industry analysts indicate this number for annual spending is going up each year.   If you happen to be a distributor with this kind of budget for e-commerce, you might want to skip the rest of this post.

We’re not saying that fighting an online guerilla war with Amazon, Grainger and the like isn’t a valiant cause.  Instead, I wonder if investing time and energy is a good use of our troops and treasure.  Why not use the effort to up our game in our real area of expertise?  Let’s focus on playing our own game so well that we take business from the giants.

Upping the ante in a game we can win.

Instead of fretting and fumbling with how to improve our online catalog, why not work to develop additional tools for your own unique knowledge-based value proposition?  No doubt your organization provides dozens of value-added services to customers.  Certainly, you provide on-site expertise which will not be delivered via the web (at least in the foreseeable future and my lifetime.)  Let’s invest in the stuff that really attracts our customers.  The list could be massive but here are a few to ponder:

1. Develop a process for measuring the value you provide to customers. 

Don’t count on technical customers to properly monetize the value of your product/service solutions.  Most technical folks lack the basic skills required to turn your last late night service call into dollars produced for their employer.  Develop and aggressively sell this customer advantage.

2. Create connections with your customer’s top brass.

These folks may be writing big checks to your company every month.  Very few of them understand precisely what you do and why you warrant the dollars they send your way.  They don’t understand the technology of your products and most don’t want to learn it.  Why they do want to understand is how you help them make money.  Learn to speak their language; talk about financial impact (see my previous comment.)

3. Build a process around your sales effort.

Good salespeople are hard to find.  Many of your top sellers may be pushing toward retirement years.  A process will help capture their expertise and allow your company to quickly and efficiently on-board the next generation.  And, the future will most likely involve some kind of team sales approach.  Done well, team selling requires a playbook.  A sales process keeps the team running in the same direction.

4. Start charging for some of your services.

A lot of what we do is so valuable, so uniquely positioned and required for customer success that we deserve to be compensated.  The Gross Margin for service model is starting to break down.  Why, because products are getting functionally cheaper and the cost of our expertise is rapidly rising.  Something has to give.  This is where I put in a shameless plug for my book, The Distributor’s Fee-based Service Manifesto.  It’s on… holy smokes, you may have guessed-- Amazon.com.

5. Sell your value to your Supply Partners.

Here’s my take on a lot of this Amazon stuff.  Some of our Supply Partners are reading the same articles I have been subjected to.  A good many of them are starting to wonder if they should be jumping aboard the midnight train to Amazon-land.  We need to stop them at the platform and before they buy the ticket.  The folks who actively sell vendor’s products into new applications aren’t hunched at a computer.  The knowledge-based advice we provide is not buried 300 pages down on some internet site.  We actively sell their products.  We create new demand for their stuff.  All of this effort costs money.  We need a much deeper margin than an online store.

I am not saying we should abandon new customer facing ideas.

Before we get back to the business of distribution, I want to make one final point.  I do believe we should constantly update our ability to interface with customers.  A dynamic website is a must have these days.  Distributors need to be able to handle electronic orders and provide logistical information to customers via e-commerce.  I like electronic invoices.  Mobile apps will play an important role in our near-term future.  Not keeping up is never good.  But….

I believe our game is solving customer problems not selling brown boxes on the internet.