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Changing Your Channels of Distribution A recession brings an opportunity to prioritize
your selling strategies Sales and Marketing Magazine Article January 2002 - Tim Furey Co-Author of Channel Advantage |
"Channels of Distribution" refer to an entire "go-to-market" system that links a producer of products or services(Suppy) to the end-user (Demand). For example, a hotel (Supply) may want to link to the end-user Meeting Planner (Demand). The channel of distribution to link may be in the following sequence: (a) an "list" service generates a list of potential buyer, Meeting Planners, (b)a hotel telemarketer or telesales telephones these meeting planners to learn of more of their needs and ask if they would like a sales person to call them for an appotintment, and (c) the sales person has an appointment and attempts to "sell." This channel or go-to-market system had three components. As you can see, it would be far more expensive for an experienced sales person to do what the other lesser paid components of the system did. This information will help you to better understand the following article.
The following steps
are recommended by Furey to determine a more profitable selling strategy::
1. Prioritize Customers and Products
Sales executives should be asking themselves which customers and products
are going to bring in the most profit during the next year—and then drop
the ones that aren't at the top of the list. It sounds easier than it is,
because most salespeople want to hang on to any client who's bringing them
commission.
Tim Furey, CEO of Marketbridge,
a sales consulting firm, in
Such strategies will help these companies come out relatively unscathed
when the economy rebounds. It forces salespeople to put an extra service
focus on their biggest, most stable clients, who will still exist when there's
a brighter economic outlook.
But for other companies, prioritizing customers has meant abandoning the
call center altogether. Tim Lybrook, president
and CEO of Teletron, a company in
2. Integrate Multichannel
Coverage
Just because a company decides to make one channel a priority over another
doesn't mean certain customers don't still need to be serviced by more than
one of your sales entities. During a weak economy it's paramount that salespeople
cater to the wishes of their most prized accounts, Furey says. "Major clients want coverage by their salesperson,
supported by telesales and Web applications, too," he says. "Customers
want to alter their coverage—they don't want to have to pick a channel."
It's dangerous to get caught in single-channel mode. That's why Scott Koerner, executive vice president and chief operating officer
of Zones Inc., a computer products reseller, in
3. Abandon What Isn't Working
Partnerships and alliances are the key to increasing your customer base
in these trying times, but that doesn't mean every partner is worth keeping.
Now is the time to cut some of these partner channels loose, before they
drain your business of time and resources. "Everybody needs to do some
pretty significant rationalization of partner channels," Furey
says. "I recommend cutting the bottom twenty percent of partners out."
What to look for in those you're keeping? Koerner
says he can't go wrong with his alliance with Compaq and IBM. "We work
together to service our top two levels of customers—the competition from
Dell is fierce, so partnering achieves a service level that can surpass
what Dell can do," he says. "IBM keeps satisfied customers and
we build the relationships with them."
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Coaching Recession Rookies Chances are that most of your sales force has never
sold in a down economy. Now's the time to teach them how Sales and Marketing Magazine Article January 2002 |
It's a problem sales managers across the country are
facing—salespeople, many of whom have never sold in anything but a booming economy,
are struggling in today's recession. In a recent SMM survey, 51 percent of 235
respondents said the average age of salespeople at their company is under 35. Think about it: Most of these reps are
recession-time rookies.
The market shifts aren't just throwing salespeople for a loop. How to deal with
reps who are lost in a slowdown has many managers
flummoxed. Sales managers from GE, Sony, and other major corporations are
turning to public relations firms like PepperCom
Inc., in
With some experts speculating that fewer than half of today's salespeople have
sold in an economic downturn, many say solving a customer's problems is beyond
the skills of reps who have clinched deals by just
showing up at clients' offices. The problem of inexperienced salespeople is
"endemic among seventy-five percent of my clients," says Jacques Werth, president of consulting firm High Probability
Selling, in
Robb Johnson, a sales manager for Xerox Corporation, in