Strategic Insights 23
SUPPLY-CHAIN, SELLING SKILLS @ YOUTUBE.COM (?)
Are you tired of “getting
last look” to “be more competitive”? How do you exit the game of customers doing
periodic (to daily) reverse auctions to “keep everyone (suppliers) honest”
while you try to sneak margins up? Why not, at least, get the lion’s share and
last-look plus two points; or, at most, propose a win-win, perpetual, supply-chain
partnership?
How do you get last-look
plus two points? It’s easily stated. First, define, achieve and sell “best (guaranteed)
service value” (not generic “good service”) tuned to at least best customers in
a target niche. Then, educate the customers – patiently, persistently and
courageously – on how the service reliability lowers total “hidden” costs much
more than the incremental price premium.
If the
customer is still psychologically upset about paying a “higher price”? Play judo and offer them a lower one, but with
conditions. You get all of the
(category) volume and together you co-create a re-tuned, semi-custom, buy-sell
process that lowers your cost-to-serve (CTS) more than their new
contract prices. The results are: even
lower total supply-chain costs for them; and a bigger, net-profit total from
the account for you.
Switching from price-buying
to demand-replenishment partnerships is a 24-year-old trend we should proactively
embrace and offer. In 1988, Wal-Mart announced that they would buy as much as
possible from suppliers with the best supply-chain solution capabilities. Since
then, lots of big buyers and some independent distribution channels (drug,
hospital, hardware) have substantially switched from shooting prices for
product volume to win-win supply-chain solutions. Why wait for and react to our
best (potential) customers switching to supply-chain buying? Why not, instead, win
the arms-length, service-value game, AND
pitch the win-win partnership option. Tell them: “we’re ready when you are”! But,
do be competently qualified (perfect service and supply-chain smarts) to
execute.
HOW TO MAKE THIS HAPPEN?
It’s a journey with the
following seven, big steps. You can’t negotiate, lower-price, bigger-volume, sustainable,
win-win partnership deals without: (1) knowing the current net-profitability
and CTS for every customer. (2) A customer net-profit ranking report is only the
first step/tool towards (3) identifying target niches of customers to (4) re-define
service-value-equation metrics. And, each big customer will have a different
(5) value exchange scenario to manage.
Achieving “service
excellence” with extra heroics from all associates for target accounts will
require (6) corporate culture changes to re-engage everyone. Then can management
and both outside and inside sales reps (7) all sell supply-chain economics (Total
Procurement Cost; Uptime economics, etc.)?
What if any of these “big
steps” seem too overwhelming? Then, fractionate them to baby steps so small and
safe that everyone can start moving forward. Many small steps can build
momentum and courage. In this case, the baby steps involve skimming through 200+
youtube educational clips (four minutes average
length) and experimenting with the ones most useful to you. This growing
collection of clips is a prototype for a distributor-specific, turn-key,
educational-support solution for the “seven, big steps”. Please go to www.merrifield.com and click on the “Youtube
video project” link and give me feedback.
VIDEO CLIPS SPECIFICALLY
ABOUT WHAT?
1.
Clips numbered 10-22
will teach everyone how to be totally capable with supply-chain building block
concepts: TPC; uptime; customer’s customer satisfaction economics; etc.
2.
Demand
replenishment systems require a new view that I call “Value exchange
management”: clips numbered 23-32.
3.
How to reassess old
belief systems that persistently blind us from seeing the opportunities in
being able to also sell supply-chain solutions: #s 33-55.
4.
Why the outside
reps role is shrinking to fewer total, bigger accounts while expanding beyond
selling commodities for a price to “service-value solutions”: #s 134-35, 140-42.
5.
How to crack
target accounts (with total team focus): #s 136-39.
6.
The need for and
expanded use of “line item profit analytics” (LIPA): 57-95.
7.
50+ additional
clips are soon to be posted (about 400 in total planned) on how to turn all
employees on to achieving best, total service value. (Sign up for new posting
e-alerts at Merrifield.com) .
NEW SOLUTIONS FOR TOUGH
TIMES
Striving for “last-look”
selling AND proactively embracing the 24-year “supply chain buying” is smart. But,
to do so we need our own – CTS math; perfect niche-service; semi-custom service
value solutions; and re-engaged employees – to make any win-win partnerships
happen. These improved capabilities will require an educational and
service-value reinvention journey. The easy first steps I recommend are:
Read past and future
“Insights”.
Skim through the youtube video clips and take or repurpose what is most
useful for your company.
Attend the Advanced Profit Improvement Conference
on Sept. 20 – 21 2012 in Phoenix, AZ with fellow, most-ambitious, progressive
distributor executives.
And, be in touch if I can
help further!
