For many of us, it's instinctive to want to be in control. When I was a territory manager, I worked diligently to take care of all the details myself. That way, l rationalized, I knew things were done the “right” way. Can you relate?
The problem with this mindset is that it limits one's capability to utilize the resources of others who are equally, if not better, equipped to provide value-added support to your customers. It follows, then, that limiting your resources limits your ability to create anything unique. If your thinking is the same as others, it's likely your behaviors will be the same as others, and it's likely that your results will be the same as others. Being the same as others is not extraordinary. So, if you are a territory manager who thinks the way I did, then this article is addressed to you.
I've been writing about how you can approach your target accounts with an intention that is different from your competitors. Others call on your customers hoping for an opportunity to bid or quote on something… looking for some scraps to pick up. My coaching, detailed in the book Proposition Selling, presents a consultative approach to selling where you see yourself as a value-added resource to your customers that can help them create extraordinary success in their business. If you intend to create extraordinary success for your customer, you're going to need some help.
When it comes to helping customers create business growth, the wise territory manager would consider all of the resources that are available to him or her. Just about every person in your company has capabilities that could, in some way, help your customers:
- Your customer sales specialist can often answer questions that technicians and installers have.
- Your delivery guy can time hi deliveries to accommodate your customer's busy morning activities.
- Your marketing specialist may help contractors put together technician sales handouts or direct mailers.
- Your training department can put on classes that will improve the skills of your technicians, installers and comfort advisors.
- Your credit department might provide coaching on how to deal with certain financial challenges.
Looking at others within your company as a resource for creating growth could also apply when it comes to helping your customers get out of trouble.
For example, let's say your customer shares with you, in confidence, that he's having problems with cash flow. He got himself stuck by expanding his residential business into commercial, taking on several projects with general contractors who are all now challenging him with slow payments. He's afraid to push for money because he doesn't want to alienate the general contractors and cause them to pay even slower or decide to look for ways to not pay him at all. He has already exhausted his credit line and now he's extended himself past 60 days with all his suppliers, including you. He only sees things getting worse.
Many territory managers would see this as something they couldn't do any thing about. Company policy might dictate that he turn the account over to the credit manager who would set guidelines on how much business could be taken, if any, and what the terms would be. This might help the company to minimize bad debt losses, but it wouldn't necessarily help create any future customer business or loyalty.
You could choose to help your customer learn and grow from the experience by getting expert help in managing this complex situation. You would start by asking some questions:
- How is the rest of his business doing?
- Are the general contractors willing to discuss their payment intentions with your company also represented?
- Has he ever used job accounts?
- Would he be willing to sign a personal guarantee?
- Would he be willing to meet with your credit manager to discuss alternative ways to approach the general contractors when asking for money?
These questions are realistic for discussion if the territory manager has a good relationship with his customer. The credit manager has likely had experience in similar situations and could suggest alternative ways to work through this;job accounts could be set up, joint checks could be issued by the general contractors, materials for completing the job could then be delivered on time and your customer could focus on running his business instead of worrying about survival.
With this mindset, the territory manager would be looking at the situation not just as an opportunity to help his customer get out of trouble, but to also address the cause of the problem. By doing so he can actually strengthen the relationship.
Let's take another example.
The service parts and supplies business you have had for years is now being threatened by a competitor who has promised your customer that they will reduce your pricing by 5 percent across the board. You ask your sales manager for this price concession and are immediately turned down. What can be done?
From my perspective, the first step is to recognize the difference between “price” and “cost.” It is possible that you can be the higher price, but the lower cost provider. You must understand your customer's business in order to capitalize on opportunities to create leverage in these situations. You must also understand how your business can provide resources that will produce cost – saving advantages for your customer.
The first point to make with your customer is that any cost savings should represent an opportunity to increase profits. Many contractors will buy something for a lower price and recalculate their selling price based on that, essentially making less profit.
Secondly, reassure your customer that you have not been overcharging for your parts and there isn't 5 percent to give. Explain that this is a typical strategy for gaining new business and eventually prices will be increased to the same levels or even greater.
Neither of these points will be enough for you to keep the business, so you will to have to do something creative. Let's go back to the idea that you can be the higher price, but lower-cost provider. Let's say that you know the service dispatcher complains about technicians who don't order the repair parts they need from the day's service calls until they return to the shop at 4:30 p.m. She can't reschedule the service repair until she can confirm the part's availability and cost. Customers constantly complain to her about this.
Let's evaluate this situation. What is it costing the company to continue to operate this way? To begin with, the dispatcher has to spend time prodding the technicians for repair parts that they need throughout the day. Every call she makes consumes her time and the technician's time, which costs time and money. While she is making those calls she can't do something else that would be productive, which costs time and money. If a part has to be back-ordered and the customer is told that the next day, you not only could lose the repair, but you can lose the customer due to poor service. That costs a lot of money.
Here are some alternatives that could actually improve the level of service you provide and increase your customer's profitability in many ways without lowering your price:
- You could offer to consign inventory in adequate quantities, so that the majority of these repair parts would be on hand. That would save time and money.
- You could offer to process any standard repair parts orders given to your branch by 4:30 p.m. and have them delivered by 7:00 a.m. the next morning. That would save time and money.
- You could offer to process any standard parts order given to your branch by 4:30 p.m. and deliver them to each service technician's truck at their home later that same evening. That would save time and money too.
In fact, each of these strategies is currently being done by some suppliers. Compared to the typical way suppliers provide parts and materials to contractors, each of these alternatives could be considered extraordinary service. All of them require support from others in your company.
In Example No. 1, someone from your branch will have to regularly stop by and count inventory, create the order for what has to be replaced, get the contractor to write a purchase order, then get the order entered and eventually delivered.
In Example No. 2, someone at the branch will have to stay late to process those orders, pull the parts, and get them staged for delivery in the morning. Then someone else will have to come in early, get the parts and deliver them by 7:00 a.m.
In Example No. 3, again, someone will be staying late to process the orders and pull the parts, and another person will be driving for hours making the deliveries four or five nights a week.
Without recognizing that price and cost are different, and without understanding how the customer's business operates, there isn't much that can be done against a competitor offering lower prices. On the other hand, when you work with a team that, together, can address a complex set of customer needs, you have then created a competitive barrier that is very tough to breach. That doesn't mean that your competitors will just give up. It's likely that they will look for ways to improve on what you have provided. It is a good idea to constantly search for ways to create extraordinary service, helping your customers be more successful, and grow your territory with the profitability you need, and deserve.
Tom Piscitelli is the founder and principal of T.R.U.S.T.® Training and Coaching, www.sellingtrust.com. For nearly 40 years, he has worked with HVAC and plumbing contractors, distributors and manufacturers with a focus on increasing sales by creating effective customer relationships. Tom's new book, co-authored with John Sedgwick, Proposition Selling: How to Create Extraordinary Success in Business to Business Sales, is now available. Contact Tom at 425/985-4534 or firstname.lastname@example.org.