A Sales Call is Not Just a Box of Donuts
For many distributors, multi-channel only means adding e-commerce alongside field sales. However, there is more to multi-channel than just field sales and e-commerce. It might or perhaps should include proactive inside sales, vending machines, mobile, email, and SMS/MMS.
The key driver for all of these potential channels is your customer’s need for more efficiency in how they shop and buy from you. We have done numerous surveys of customers over the last 7 years that show customers are less interested in spending time with field sales. Our most recent research with over 3500 customers of 10 distributors shows that 16% of respondents NEVER want a field sales rep to visit and another 22% only want a field sales rep visit ONCE per year which is kind of like NEVER.
Using an e-commerce site or working with a dedicated inside sales rep are both much, much more efficient for your customer than spending 30 to 60 minutes with a sales rep (and possibly receiving a dozen donuts!) Your customer can shop and buy online or shop and buy with an inside sales rep in less than 15 minutes. If a P.O. is necessary, they can send it via email and be done with it.
While this preference for efficiency is more pronounced with Millennials who consider shopping with a sales representative as the third resort, the trend applies across other age demographics as well. The great news is that what’s good for the goose is good for the gander. You, the distributor get better efficiency with e-commerce and inside sales in the following ways:
- Cost per order with e-commerce is significantly lower, often $20 to $30 per order.
- Cost per customer contact with inside sales is much lower (see the table below) AND the gross margin of customers who would be assigned to inside sales is significantly higher. For most industrial segments, mid-market customers are 10 to 20 points higher margin. For building materials and construction it is more like 6 to 12 points higher.
| Type of Sales | Average Contacts/Day | Average Contacts/Year | Average Annual Salary | Average Cost per Contact |
|---|---|---|---|---|
| Field Sales | 3-4 | 750-1,000 | $100,000 | $100-$133 |
| Outbound Call | 20-25 | 5,000-6,250 | $45,000 | $7-$9 |
The direction today and in the future is inevitably toward greater efficiency. While this is not a clarion call to fire all of your field sales reps, it is incumbent you to help make your customers more efficient in shopping and buying from you. Here is my recommendation:
- Find out what YOUR customers want in shopping, buying, and communication.
- Heed their message and respond accordingly. E-commerce might NOT be the first move. Your customers will tell you.
Jonathan Bein, Ph.D. is Managing Partner at Distribution Strategy Group. He’s
developed customer-facing analytics approaches for customer segmentation,
customer lifecycle management, positioning and messaging, pricing and channel strategy for distributors that want to align their sales and marketing resources with how their customers want to shop and buy. If you’re ready to drive real ROI, reach out to Jonathan today at
jbein@distributionstrategy.com.