The paper chase

What do you do after you mandate cost-savings documentation and no one responds?

by Paul Markgraff

Fictitious distributor Primo Industrial Supply sales manager Kevin Fitzpatrick is fed up. For the past several years, Fitzpatrick has witnessed the incredible savings generated by the Value-Added Partner of the Year Award winners. He learned how their consultative approaches to curing customer headaches boosted sales and expanded gross margin. He wanted in.

So, Fitzpatrick ordered each of his salespeople to turn in one documented customer cost-saving per quarter.

After some initial buzz, the program failed miserably. Not one salesperson turned in documented cost savings, and Fitzpatrick’s value-adding plans are at a standstill.

In our last issue of V-Mail, we asked you what you would do if you were in Fitzpatrick’s place. Should he start to pay his salespeople to turn in the documentation he requires? Should he withhold commission checks from his salespeople until they turn in their report? Should he fire the lot of them for gross insubordination?

Tim Cogan is product manager for IBT Inc., a Kansas-based industrial distributor. He says

Fitzpatrick needs to first sit down with his sales team and discuss the objectives of his program, because the majority of the sales team members probably view it as a total waste of time.

“He needs to effectively sell them on the benefits of this project,” says Cogan. “They have to be convinced, without a doubt, that their efforts will not be in vain. Once Fitzpatrick can justify the time each of them must invest in this effort, the better chance of it then becoming successful.”

If the program can be justified, it will become successful. If not, Fitzpatrick should swallow his pride and move on, says Cogan.

What would you do? Fictitious distributor Primo Industrial Supply sales manager Kevin Fitzpatrick wants his salespeople to help customers find potential areas for improvement on the plant floor. But, his salespeople are having a hard time getting access to the plant floor. What do Primo's salespeople need to do? If you were in Fitzpatrick's shoes, what would you do? Click here to weigh in on this difficult issue.

Henry Testa, MRO sales director for Michigan-based fluid power distributor Exotic Automation & Supply, says mandating documented cost savings isn’t enough. Testa says Fitzpatrick needs to first train his staff in developing the necessary relationship-building skills this kind of selling requires. He also says he would cover the documentation requirement in his salespeople’s annual performance reviews.

“If the effort is still not made, the seller is more of an order taker,” says Testa. “You can then structure his compensation accordingly.”

In his experience, Testa says his sellers either embrace value-added documentation and make money with it or they struggle with the entire customer account planning process. When they struggle with the concept, it becomes difficult to add value and protect and grow margin for the company.

Chet Mann, vice president of sales for North Carolina-based Central Welding and Industrial Supply (CWIS), would put the focus on compensation.

This article was produced exclusively for ValueAddedPartners.org. Copyright 2006.

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