June 30, 2015
By John Sonnhalter, Rainmaker Journeyman at Sonnhalter
Distributors in general are their own worst enemies when it comes to the value they bring to the table and charging customers for it. As their customers are asking for more and are willing to pay less, the distributors’ margins are being reduced and they don’t know how to change the momentum.
If you’re a general line distributor, I wish you the best of luck as you are destined to go out of business if you continue to follow this path. Most distributors who have a specialty like cutting tools/abrasives, power transmissions, bearings, etc. have a distinct value to the proposition, but many aren’t taking advantage of it.
Traditional brick and mortar distributors can’t compete with online catalog sites on price, but what if there’s an on-site production problem? Over the years, I’ve been on several joint end-user calls where the distributor and manufacturer are going in to solve a production problem.
Long ago, the distributors just solved the problems and didn’t charge for it (by the way, it wasn’t usually the product the distributor sold them; it was how the customer was or was not using it correctly).
I recently read an article in Industrial Distribution by Bill Moore from SKF on how distributors can put a dollar sign on the valuable services they offer. Here are some highlights:
- Understand your value stream – Are you taking advantage of all the support your manufacturing partners are offering such as training or engineering assistance? All can contribute to a cash value at the customers.
- Understand the customers’ challenges – Instead of selling him cutting tools, find out what type of production issues they’re having using the tools. Help him solve that. Add value they can’t get somewhere else.
- Valuate your services – What do you bring to the table that they’d have to hire an outside consultant to do? What price can they put on not having to shut down a production line?
Bottom line is, take advantage of what your supplier partners have to offer. They can help you improve your value and add $ to your bottom line.
June 16, 2015
By John Sonnhalter, Rainmaker Journeyman, Sonnhalter
Industrial marketers who are targeting design engineers need to practice the virtue of patience when communicating with them. I know Sales wants low hanging fruit to sell now, and the C suite is looking for results sooner than later.
The truth is, nothing moves fast when dealing with designers. According to IHS Engineering 360, 70% of new business comes from long-term leads. You don’t know whether they are just fishing for options, have a real project and need help in determining options, or are ready to download CAD files to put in their drawings.
Very rarely does the conversation start at the download CAD drawings. Being spec’d in can take 6 months to several years. Is it worth it? Long term, I think the answer is yes.
As an industrial marketer, our jobs are to identify where they are in the sales funnel and engage with them as they move toward a sales. Your company needs to be top of mind so when the purchasing decision is being made, you have an advocate inside promoting you.
Here are the four cornerstones of a nourishing campaign:
- Nourish – provide them healthy servings of relevant, useful information.
- Protect – keep their interest so they don’t abandon you for a competitor.
- Support – stay in regular contact and always meet their needs.
- Encourage – give them offers to help them through the sales funnel.
IHS Engineering 360 has put together a lead nurturing tool kit. Here are some highlights:
- Respond to inquiries in a timely fashion – if you don’t respond for a month or so, chances are they will have forgotten why they inquired in the first place.
- Respond appropriately. Define your audience segments so the messages will be meaningful.
- Offer value, not sales pitches.
- Create a call to action and objectives. Engage a prospect and monitor results.
- Build a schedule of multiple touches over a period of time.
What are you doing to nurture leads?
June 10, 2015
By John Sonnhalter, Rainmaker Journeyman, Sonnhalter
We’re in a service business, and I always say our assets walk up and down the stairs every day. The key to any good company is great people. This is especially true in smaller companies where every “body “needs to be the right person.
I recently read a book by Andrew Bennett, The Talent Mandate: Why Smart Companies put People First, that outlines sure-fire ways of keeping great people. Here are some highlights:
- Don’t put jerks in management just because they’ve been around for a while; it doesn’t mean they are ready to manage others. No matter who you put there, they need to be able to think out of the box and come to the table with new and fresh ideas.
- Hire for the future, not the past – Choose talent that has a broader perspective on life and can adapt to the world of today.
- Measure results, not hours – unless you run a factory. Focus on the end game, not how they got there. There’s plenty of ways to get to a goal; be open to new ideas.
- Mix old with new – If your company is big enough, include different generations on teams to get a better perspective on solving a problem. A good idea can come from anywhere and the Millennials have a lot to offer and are willing to learn.
- Formal training program – No matter how big or small your company is, if you want them to move up the ladder, you need to get them exposed to different aspects of your business. Someone in sales may need to do a stint in customer service or production scheduling to have a greater appreciation of the bigger picture.
- Empower your team – The best way for anyone to make good decisions is have all the facts. Don’t hoard info or rationale on why you want to do something.
What are you doing to keep good people?