04/14/2023 copyright River Heights Consulting 2011

Process Interaction

Process in Distribution

SalesCRM, Pricing,

Targeting, Metrics

PurchasingSPA, Ship & Debits, Vendor

Management

AccountingAccounts Payable, Accounts Receivable,

Inventory Valuation, Cash Flow, Payroll, etc.

Difficulty Systemizing

LogisticsWarehousing

Freight Shipping

IT/Support

The Wild west

The Distributor Sales ProcessIt’s Complicated and…

It’s Interactive

Customer Interaction

Pricing

Vendors

There’s Pushback

They can’t make me do that..This steals from my selling time…

Big Brother, Mind PoliceJob SecurityI’ll fight….

Do you want me Selling of Filling out Forms?My sales will go down because I will loose

customer intimacy!

We already have a process….

Documented?

Written down or flowcharted?Provided to Salespeople and others?

Metrics?

Are there measures of success?Are these real or subjective?

Managed against?

Are people judged based on their adherence to?Is coaching provided to help follow process?

Real or imagined?Here are the tests of a real process..

But, it’s informal…Each salesperson has their own…

Evidence MountsBusiness Partner

Contributor

Solutions

Preferred Supplier

Approved Vendor

No Process Informal Defined Defined Continuous

Perceived Value

Sales Process

Only High Process Groups

Pricing ProcessInteracts with Sales

Forces Process Driven:• Feedback • Scientific Pricing Analysis• Training• Documentation

Customer Activity

Pricing

Vendors

This Results in:• Better Segmentation

(Customer and Vendor)• Stronger Feedback• Discipline in Sales Mgmt.

Upper QuartilePerformance

• Often have higher margins but…

Not a margin driven thing…Better Control of ProcessAffects:• Selling Activity/Results• Operational Costs• Transactional Costs• Inventory Control• React Better/Faster to Changes in Economic Conditions

What’s next?

Customer Interaction

Pricing

Vendors

Customers most likely to value and respond to our solutions

Best customer to product

match

TARGETING

Product Level TargetingDocumented?

Product Selection* Based on Vendor* Management DirectionLimited number of accounts selected* Type of AccountShort term

Metrics?

Order Received* Predetermined size* First/Trial OderSpecification* OEM impactNumber of Targets

Managed against?

Right Customer* Are we matching customer and product well?Time to order* Are we achieving success in the right time?Number of Targets* Organization skills?

Vendor – OrientedFast Results – typically 6 months or lessEasily automated Pricing

Process

Solution Targeting

Information

Developing

Acceleration

Partnering

Are we there yet?plus

Lean

Information

Developing

Acceleration

PartneringStage Milestones Information We are learning the people and how this customer does business on the inside. Still asking questions, still finding out who does what. In many ways this is the most important stage – skip over this stage and all you get is practice writing proposals.

Who and what do we know? Contacts at the customer?

Purchasing, production, maintenance, engineering, executive level?

Who is likely to be the decision maker? Why? Is there a gatekeeper, roadblock or imposter?

Who is the incumbent supplier? Strengths, weaknesses, allies in the customer

What are their business plans for the future? How do they fit into the market place? Major issues around our kind of business?

How might we address those problems?

Do we see issues they do not see? What are those issues?

Developing We are aiming our proposals at the places where the customer feels the most pain. This maximizes our chances of making every proposal a winner.

Which problem should we attack first? What is the advantage to the customer?

Who at the customer is most likely to understand the value? Have we developed any metrics? How long will it take the customer to decide? What is our probability of success?

How will this position us for additional business?

Are there other opportunities that will fall should we succeed?

Accelerating Pushing our competitors out of the way. Looking to make certain this goes into full bloom and maximum profitability.

How will we handle the switchover? Do we have a set date, occurrence ect?

How is this defined? Do we have a signed agreement?

If no, why not?

Partnering Nothing is worse than losing a customer. What can we do to understand now – how to better retain this guy for the long haul.

How will we “lock in” to be competition proof? How are we going to measure customer satisfaction? How often should we “service the customer”?

Typical Documentation

Measures • Where are we in the process?• Time in stage• Salesperson stuck in stage?

Coaching/Management• Need to abort late in process?• Salesperson’s ability to gather

information.