SPA Featured in The Distributor Channel “Product Training, Sales Training, Price Training?” Article

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SPA was featured in the latest article on The Distributor Channel blog – “Product Training, Sales Training, Price Training?“. It describes how the way distributors view training is skewed.

Excerpts of the article authored by Frank E. Hurtte Jr. who has 28 years of distribution industry experience and a lifetime in sales follow.

“Here’s my unscientific rundown of content:”

After observing hundreds of confabs carrying the “Distributor Sales Meeting” moniker, I would characterize the content as product-centric community bulletin boards with an occasional dash of something else. Here’s my unscientific rundown of content:

– 49% New Product Introductions

– 20% Existing Product Re-Launches

– 15% Delivery/Logistics Issues

– 10% Company Policy, Quotas, Performance

– 5% Sales Training

– 1% Pricing

“What should be covered in a sales meeting?”

One major point is why a customer would benefit from the use of your product. This benefit question must be tied to value drivers. Labor savings, lower cost maintenance, better energy usage, increases in uptime, and improved operational efficiency must be studied in detail. Whenever possible, it makes sense to tie these to monetary values. For example, our product saves the customer $105 dollars during the installation procedure.

Distributors also add value via the services they provide. Just in time delivery, emergency back-up stock, parts kitting and application support join valuable yet mundane tasks such as locating and serving as a source for some obscure manufacturer.

A real sales meeting would stress the importance of the value the distributor provides to each and every customer. A real sales meeting would cover the questions needed to bring out customer-centric information which would allow for better solutions.

“But what about Price Training?“

Would it make sense that some distributor solutions are scarcer than others? With this in mind, the distributor is entitled to charge more. The problem is, most distributor salespeople don’t fully understand the cost of handling the products. This could be part of price training.

A few of the products we sell are truly commodity-like. When commodities are sold, quantity and types of logistics required impact the price. Would it make sense to talk about precisely what makes a “quantity order?” Is it 10 pieces, 10 cartons or 10 pallet loads? Are the people in customer service aware of the price breakdowns? Are they measured by the way they adhere to management’s directive?

The sales team must continually review (and occasionally improve on) the following topics:

1. How was the system price derived?

2. What are the natural customer segments and how do they impact price?

3. What product types deserve a higher margin? And why?

4. How do we handle pricing exceptions?

5. How are market prices impacted by competitors?

6. The importance of understanding customer-based negotiations?

“Price Training starts with a Pricing Process.”

Developing a real pricing process is central to price training. The Strategic Pricing Associates (SPA) process uses scientific computer analysis of data pulled from your own past sales. Further, the process has detailed documentation designed to enable multi-layer training for literally everyone within the distributor organization (Sales, Customer Service, Purchasing, etc.) Finally, the SPA process has metrics developed to coach, help and manage the sales team into the future.

Strategic Pricing Associates has assisted over 350 distributors through the implementation of their process. Most SPA clients see results in 90 days. The results pay dividends. The typical SPA client sees a gross margin increase of two full points.

“A final thought”

Strategic Pricing Associates hosts several Pricing Strategy Seminars. These are a gathering of clients already using the SPA system, Industry Experts and companies considering a pricing process. The seminars are thought provoking and powerful. I have had the honor of speaking at a handful of these events and will be doing so again in Chicago on June 6th.

Click here to read the complete article.

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We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

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