Reasons Not to Use Supplier Sales Teams
by Frank Hurtte, River Heights Consulting
In the November/December issue of Industrial Supply magazine, I wrote an article outlining the advantages of harnessing the power of supplier sales teams as a free resource (read it here.) I believe that, in the rat race of life tied to providing customer support, developing new accounts, researching innovative solutions to customer issues and simply taking care of business, many distributors have lost sight of the resources available from their supply partners.
For me, articles are a therapeutic outlet; a creative way to vent on topics I repeatedly encounter in my day-to-day practice. When distributors agree and incorporate the ideas into their business, I get warm feelings in the cockles of my heart. When they take time to expand on my thoughts, I get ecstatic.
Last week I received an email from a now-retired 40-plus year veteran of our industry. A guy who, even though retired, still cares enough about the future of our industry to read this publication. And, a gentleman who obviously has thought a lot about the supply partner help. Here are some of his thoughts:
“I agree with everything you said about doing joint sales calls, but you didn't touch on reasons NOT to make them. My experience offers three, although there may be others.”
Here are his three reasons:
1) The agent/rep does more harm than good
2) The agent/rep is a newbie and the distributor salesperson and/or the customer doesn’t want to take time to train the new person
3) If there is a possibility the manufacturer will take the business direct
All are great points and worthy of a few comments.
The Agent/Rep does more harm than good
Our reader points to a specific situation where the supply partner’s salesperson used poor judgment in comments to the customer and displayed an unprofessional demeanor. Quoting, “His language would probably be OK in a bar or in some friend’s man cave, but not with customers.”
Sadly, there are people like this. In these cases, it might be best NOT to take the guy on calls. However, the decision must be made carefully and, in my opinion, with the feedback of management.
Why do I say this? This reason for not taking supplier sales teams on calls is one of the most commonly mentioned by salespeople. If true, the supplier salesperson needs to be left out of the equation, but experience with dozens of distributors points to a need for further examination. What if only one of the distributor’s salespeople feel this way?
We have heard rants about lack of professional behavior by distributor salespeople which, when investigated with the other members of the same distributor’s team, turned out to be mostly without merit. One person found the behavior to be offensive while many others found value in the supply side seller’s work. Could it be a personality conflict? If so, solving the issue falls on the distributor’s management team.
A final word on this topic. If the behaviors are truly offensive and negatively offset any potential value, it becomes a management issue. Distributor management must either document and report the issues to the supplier or make a hard decision to operate without support.
The agent/rep is a newbie and the distributor salesperson and/or the customer doesn’t want to take time to train the new person.
We’re all busy – I get that. However, training a supplier rep the right way could pay big dividends. Even in a world where supply partner salespeople turn over about every three years, a year of training could provide payback for a couple of years.
Mentoring a newbie also creates loyalty that transcends the normal business cycle. Thinking in worst-case scenario terms, that being they learn from you then go to a competitor, a properly trained guy most likely will understand the need for distributor margins and not turn into a “two-point Pete” pricing wizard.
If one of your customers dislikes newbies so much that they don’t want to breathe the same air as anyone with less than 10 years of experience, work around the situation by instructing the new supplier salesperson to listen, learn and only speak when spoken to. They might still be useful in negotiations with their factories.
If there is a possibility the manufacturer will take the business direct.
For the record, I hate companies that take distributor business. First, it eliminates any semblance of trust from the partnership and, more importantly, it keeps distributors from doing their job. I know of one company whose new (and ill-advised) president mandated that every salesperson in North America do 30 percent of their business direct. The best of the best salespeople quit. The rest followed the path of least resistance, converting distributor customers to direct. The results were devastating to the company. Why? Distributors quit actively selling their products, business levels dropped, and a few distributors retaliated by attacking the direct business with new suppliers. Suppliers please note: It took this company two years to realize their mistake and 10 years to get back on track.
Manufacturers, allow me to provide a couple of final words. Sometimes direct business is necessary. Distributors don’t like it, but they understand. The key to maintaining your distributor relationship is to avoid these common errors:
- The need to take direct business must be predictable. For example, accounts in certain industries, accounts purchasing over a certain threshold or brand-labeled business might be examples.
- If you take business that was originally developed by a distributor, you need to compensate them in some way.
- The decision to take business direct should be handled at a high level. This is not a decision to be made by a rookie manufacturer salesperson.
- The decision to move business from a distributor to direct should never be made based on the request of a purchasing agent who states, “We need to buy direct because of distributor service issues.” Purchasing professionals believe direct purchases mean lower prices. If it’s a service issue, keep the price to the customer stable and give the distributor a chance to fix the service issue, assuming any existed. Many customers, when faced with a direct price equal to the price from their incumbent distributor, magically decide to stick with the distributor.
- If you must take business direct, free the distributor to pursue the sale with another supplier. It’s fair for everyone. If one of your competitors can build a distributor margin into their sale price and you can’t, then the problem belongs to you, not the distributor.
Finally, for distributor salespeople….
Distributor salespeople, at least the successful ones, prove their value to customers daily. But that’s only half of the equation. We are the “middleman” and a powerful channel to market. Take time to sell your value to your supply partner counterparts. You’re not simply processing orders for business that would happen anyway. Without you, their lives would be harder and their paycheck leaner. Tell them about the expectations you set for yourself, especially the ones that help them do their jobs better. And, this is important, tell them what you expect from them. There is an implied contract: I’ll do my part if you do yours.
Straight talk, common sense and powerful interactions all describe Frank Hurtte. Frank speaks and consults on the new reality facing distribution. He has a new book out – “Plan on Breaking Through – Strategic Planning for Accounts.” Contact Frank at frank@riverheightsconsulting.com, (563) 514-1104 or at riverheightsconsulting.com.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
