When salespeople sell value instead of price, distributors must track and measure cost savings to sustain success.

by Paul Markgraff

Selling value is a lot like a great golf swing: Mechanics will take you a long way, but if you don’t follow through, you’ll come up short every time.

So it goes with fictitious distributor Primo Industrial Supply. Sales manager Kevin Fitzpatrick has taught his salespeople the mechanics behind selling value, and some of them have become adept at it. But Fitzpatrick is unsure how to follow through on these successes and document it to prove Primo’s worth to customers.

We posed the question to V-Mail subscribers in our last issue, and responses varied. Some readers thought Fitzpatrick should invest in software that handles value-added documentation, while others thought more ubiquitous software could handle the job. Still others said Fitzpatrick did not need software at all.

Josh Duggan, a manager at Pine Bluff, Ark.-based Arkansas Mill Supply, says Fitzpatrick needs to create a standardized reporting process for cost savings. He suggests Primo could create forms using specialized software and store them on the company network so all salespeople could access them.

“You could take it a step further and invest in software such as SalesStrat,” says Duggan. “This gives you standardized documentation so all savings are reported uniformly, and it allows for all documents to be created and tracked electronically and more efficiently.”

Gary Drypen, vice president of operations for Exotic Automation & Supply in Farmington, Mich., says a loose-leaf binder full of forms may satisfy some elementary aspect of Fitzpatrick’s problem. But to really bear fruit, the value-added selling mentality needs to be ingrained within the corporate culture.

“Any time a salesperson undertakes some action that ultimately benefits the customer, it needs to be tracked and measured,” says Drypen. “Software packages can assist in this, but an enterprising company with products like Microsoft Exchange, Outlook and Office can put together a functioning system of their own. The question – What have you done for me lately? – can be answered with this documentation.”

Carl Norris, president and owner of Fort Smith, Ark.-based Rogers Industrial Supply, agrees. Rogers Industrial uses a “semi-elaborate” Excel spreadsheet form with drop-down menus to measure documented cost savings by salesperson. When the salesperson completes the form, he or she e-mails it to the home office where the form is organized by customer.

“Whenever management makes joint sales calls or takes the customer to lunch, it’s an excellent opportunity to take along the cost savings file. It’s also great ammunition if the customer starts shopping prices to save a penny,” says Norris. “I see no need for elaborate software that might be difficult to use, expensive and inflexible to the needs of the company.”

Phil Samuels, vice president of sales and marketing for Keo Cutters, Warren, Mich., says collecting a backlog of value-added success stories takes time. In the meantime, he says Fitzpatrick should encourage his salespeople to share their successes during regular sales meetings.

The process of presenting value-added success stories can achieve far-reaching effects, says Samuels, such as:
• Reinforcing the value of value-added selling.
• Reinforcing to vendors their participation is valuable.
• Reminding everyone of a particular application they might apply to their own accounts.
• Showing a willingness to support productivity-improving products at the supplier and end-user level.
• Improving overall sales activity and the subsequent growth of the organization.

This article was prepared exclusively for ValueAddedPartners.org, Copyright 2007.

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