Is Virtual Reducing Relationships and Threatening Sales?

Webster’s dictionary defines the word VIRTUAL as being “such in essence or effect though not formally recognized or admitted; indirect.”

How has this word now become a strategy employed by many since COVID to take the place of personal contact?

Many cite that an issue with millennials is that this generation would prefer emailing or texting rather than face-to-face contact or even telephone calls.  Thank goodness for these tools (and yes, Zoom / Teams) during COVID when personal contact was difficult, if not impossible.  Virtual meetings proved to be an extremely effective tool to facilitate selling and marketing when little else was available.

After my last article on “Where have all the Profits Gone,” a very respected and experienced distribution leader in the electrical industry wrote to me stating the concept of profitability comes down to three simple strategies:

1. Listen
2. Follow-Up
3. Make Sales Calls

It sounds simple.  During two recent projects for Channel Marketing Group, in two different geographies, I found when interviewing distributors, contractors and manufacturer representatives the single major concern since COVID was not the supply channel, but there were far fewer sales calls being made.

One manufacturer representative, whose company expanded into a new territory, stated that three different distributors told him that, in the past six months, he was making far more sales calls to their branches and main location than any of his competitors. One of the distributors actually placed orders for a new manufacturer of the rep’s because he was determined to give more business to reps that actually bothered to care for his business and were willing to support him.

The opinion of contractors was similar. Although a few contractors stated they learned they were more efficient without distributor or manufacturer representative calls being made to them and now require appointments, each stated they value relationships and entrust their business to those showing interest in their needs and those bringing new products and labor saving opportunities to them rather than those who merely await being asked to quote jobs.

Nearly every contractor interviewed stated that few distributors, even those making their own sales calls, were seldom traveling with reps or factory people.  They stated that during the supply shortages their reliance on additional distributors was imperative, but that they were now undertaking a shrinking of suppliers. Part of their supplier review criteria is now supporting those who value the business, and call on them for the right reason and that they had begun leaving those that had not performed but where relationships had existed.

They all shared that the days of the milk run were over. While they may like the donuts, they do not need the donuts. Essentially, it is about the value that the salesperson brings to the party. That is what is valued and builds relationships.

A manufacturer needs to be aware of the relationships not only of their representatives, but which distributors are keys to their success in the field.  The only way to gather this is first hand with regional managers and field people making calls with their reps to distributors and users for their products.

If your regionals are not back on the road AND adding value, do you need them or is a different model viable? The key part of this, however, is “are they adding value?” Unfortunately we’ve found that many reps are not honest about this as, the reality … they need to maintain the relationship with the regional (which is why some companies hire us to gather insights from their reps.)

Perhaps it is a major reason why distributors need to include a level of decision-making authority at branches or within geographic areas rather than primarily at headquarters.  If regionals do not think that a branch can influence decisions, they question the value of visiting the branch (which is also a reflection on regional managers.) Driving business at the field / branch level comes down to which manufacturers and representatives are making calls and supporting a distributor’s locations rather than which manufacturers might give them the best rebates.  It’s a question of “face-time versus office-time.” Can the people in the office write a P.O.? Take a manufacturer to a customer who will place an order or influence a project or use the product?

Reps have told me that they have little authority in the field on pricing and strategies, yet they are evaluated on sales dollars and profitability. The perception by distributors and contractors is that lighting reps have that authority, for projects, where supply reps do not.

Does a factory quotations person understand that there are times when sales requests “sharpening the pencil” not because the rep wants to give away margin , but a loyal distributor might need a better price to help them win a specific job or to do business with a specific customer that might be essential to both the distributor and subsequently to the manufacturer (and the rep happens to benefit)?  Distributors, and sometimes their customers, recognize that salespeople are essential to their needs and allow for significant relationship growth, and sometimes these relationships can be result in more business. While factories seemingly want to automate processes and eliminate salespeople, thinking that distributors will be self-sufficient and loyal to a brand (or perhaps a rebate), distributor field personnel (branch personnel and salespeople) recognize that manufacturer reps, direct salespeople and yes, sometimes regional managers, add value if they make an effort and make sales calls.

Little of this information is available by emails and texts!  Only personal contact allows the development of longer-term relationships that enable the ability to prove your sincerity, trust and show your customer how much their business might truly mean to you.

According to my findings, people still do business with those they want to do business with.  Is pricing important?  Surely, but there are so many other factors involved when relationships and services exist!

Sidebar

This fall David presented a “sales” workshop at the NAED Missouri River Club titled “Actively Listening to Drive
Customer Loyalty” which touched on sales being a contact sport and touches on many of the things I mention. According to one distributor “Sales people need to get back to basics. Your presentation points these out, yet many sales reps don’t do any of these on a consistent basis. The tools you discussed can help capture customer loyalty.” If you’d like a copy of the presentation, email us.