STATE OF THE INDUSTRY / 2011
Eight ways to improve customer relationships and expand your business
Improve Your Customer Service
Tips you can implement right now to keep your customers coming back for more.
cott Gingold, owner of business management consulting firm Confidential Counselor, and Ryan Sauers, president of Sauers Consulting Strategies, list four ways that distributors can quickly boost their customer service efforts:
1. Call your company during business hours. "Get one of those cloaking devices, or have someone call for you, and find out what it's like to call your company," Gingold says. "Do this during normal business hours and after hours. How long are you put on hold? How friendly and responsive are they? If it's after hours and you have an answering machine, maybe leave a bogus message, and see how long it takes somebody to actually call back."
2. Ask your people. Many distributors don't like to hear it, but Gingold says it's crucial to routinely ask your employees for honest feedback about what aspects of your company's customer service experience could use improvement. "Ask, 'Can you tell me what areas need improvement so I can try to make it better?'" he says. "Don't become negative or offensive."
3. Surveys. "Distributors need to have a frequent online and offline survey that they provide to their clients to get feedback, not just on what they're doing well, but on what they need to work on," Sauers says. "Customers, whether they fill them out or not, appreciate the chance."
4. Remind your customers that you're thinking about them. "Get in the habit of writing follow-up, hand-written notes after all customer meetings, because no one does that anymore, and that will separate you," Sauers says. "Whether it's thanking someone with a holiday card or a hand-written thank-you or birthday card – anything that takes time out and says, 'I'm thinking of you' – that's a customer experience that, quite frankly, no one gets in today's world."
Fire A Bad Customer
Go to www.asicentral.com/soi1
to an ASI Radio segment with tips on how to avoid a sales slump. Share these strategies with your clients and distributor friends.
To Mike Emoff, a "bad" customer is one who takes more of his company's time than it's worth to sell to them – in particular, clients who buy inexpensive items but take up way too much time in doing so, which wreaks havoc on his overall profit margin.
"If I have a customer who's going to run me around and buy something small – as long as I can equate what their time drain is, then I know what to do," says Emoff, CEO of Shumsky (asi/326300). "I can say to that customer in a very professional way, 'I've got to charge you a fee, and you've got to take it or leave it.' Some of them have left me, which is my indirect way of firing them. Others say, 'I know I'm not a big customer and I value your time, and I can afford the fee.'"
That same tactic can work for your larger customers. But before you push one of those clients out the door – perhaps one that's verbally abusive and seemingly impossible to please – make sure you have incoming business to make up for it, says Larry Cohen, president of Axis Promotions (asi/128263). "It's very difficult to let them go when they're driving a significant margin to your bottom line," he says.
A crafty approach to dismissing a troublesome customer without burning bridges and having that customer spread negative comments about your company is to suggest that one of your competitors might be a better fit for their needs, Cohen says. "I'd rather them waste my competition's time," he says.
Perform A Client Profitability Analysis
MMarilyn Landis, president and CEO of Basic Business Concepts, says there are three key components to performing a 100% accurate analysis on each client's profitability:
1. Direct costs. These include the distributor's cost per unit sold to the client, along with the portion of the warehouse that's used to stock that client's inventory, Landis says. "Also, if they have a dedicated customer service rep – somebody who's actually working with the customer in a technical sense – that's a direct cost," she says.
2. Indirect costs. Distributors should calculate utility expenses, including gas, A/C, and anything else in use while dealing with that specific client, Landis says. "You also have your administrative overhead – your IT, sales management – all of those things are indirect costs unless you can tie them into direct sales," she says. "If this customer is 30% of your sales, they should be allocated 30% of these indirect costs."
3. Intangibles. Landis says this is the category that is most often overlooked. "This includes returns, errors, free work and discounts," she says.
Take the cost of an order and divide it by direct costs, indirect costs and intangibles, and you will wind up with that client's overall profitability for that particular order, Landis says. "I always tell my clients that they should gauge profitability for their biggest accounts first," she says.
Target The Education Market
Marketing to K-12 schools is often much different than marketing to colleges and universities, but according to Mike Emoff, CEO of Shumsky (asi/326300), they have one important similarity: Distributors can earn an in with lower and higher educational institutions by volunteering in one form or another. And it's time well spent, since the education market is the number-one end-user sector for distributors, accounting for 12.4% of industry revenues in 2010 – a total of $2.16 billion.
Whether it's helping to raise money for athletic gear or terminal disease research, Emoff likes to volunteer at K-12 fundraisers. But he doesn't hard-sell the decision-makers; rather, he lets the discussion of promotional products come up naturally. "Typically I ask, 'Have you tried this product?' And then they start talking and get excited about it, and ask, 'Where can we go to get it?' And I'll say, 'Right here.'
"It's all about trust," Emoff says. "If you position yourself as someone who's going to be checking out every opportunity to make money on a volunteer opportunity, they're going to know that. Position yourself as an expert in the field, give your advice, and let it take its course."
By the same token, Emoff has also volunteered to teach business-oriented classes at local universities by positioning himself as a marketing expert. "People who have a competency in selling can be an adjunct sales expert in a class," he says. "I make connections either with the business school or professors in a marketing role. I also donate, so I find myself in a position to make sales with them because I'm supporting the universities."
EXPAND A CLIENT RELATIONSHIP
When trying to expand your relationship with a current client, Marsha Londe, owner of consulting firm Tango Partners, says distributors should ask themselves five questions about that client:
1. Do they have staff and/or customers who need to be motivated, recognized or rewarded?
2. Do they have a client base that calls for mailings and gifts?
3. Do they have multiple departments
(especially marketing and human resources) that don't have established promotional product programs?
4. Do they have ongoing programs such as safety initiatives or celebration days for departments and staff?
5. Do they have multiple divisions, offices and/or locations?
In regard to the final question, Londe says distributors should look at companies with multiple locations as individual clients. Take the medical industry, for example. "Each hospital is a separate client and may have individual marketing and other departments," she says.
Londe also notes that every hospital system has many departments, and each department has specialties, such as human resources, marketing, IT, recruiting, physicians' groups, community health events and kids' school programs.
"Selling more into a key account is not simply about moving from department to department, or from a branch to the regional office to the headquarters," she says. "Look for opportunities for growth and continuity by developing programs that can cross divisions and locations. Perhaps you can create a collectible program, a limited edition opportunity or custom calendars."
And once you grow within your client, Londe says distributors should look to further expand by contacting entities that are connected to that client. "What about your clients' clients? Does this business outsource their call centers? And if they host and purchase items for a trade, can you call on the firms displaying wares or services at a show?" she say
Start A Referral Program
One quick and effective way to grow your
sales is to target new and expanding markets. Go to www.asicentral.com/soi3
to listen to a podcast that offers strategies for marketing your services to new economic sectors.
Scott Gingold, owner of consulting firm Confidential Counselor, says there are three things that distributors can start doing today to earn referrals from their satisfied customers:
1. Networking. Gingold says this should include people who distributors think might not directly be able to refer them. "But maybe that person has people in his network who can help you," he says.
And distributors need to remember that networking is a two-way street in order to continually earn referrals. "You have to be a good referrer, too," Gingold says. "Don't just tell the person, 'I'll keep my eyes open.'"
2. Incentives. "They can incentivize their clients, whether it's a gift card, award or contest for the most referrals," he says. "In some cases, it might be better socially to offer a donation in their name. If you know they're a big supporter of leukemia research, a lot of times that's a better incentive because it's not just business."
3. Personalized thank-yous. Your contacts will be more likely to continue to refer you if you personally thank them for previous referrals, Gingold says. "I tell everyone: Go to the dollar store and buy thank-you cards," he says. "Nowadays we're very quick to e-mail, tweet or text, but take the time to write a couple of sentences.
"Every night in front of the TV, I write at least one to two thank-you cards. It's not a hard-hitting sell letter; just a simple acknowledgement. It distinguishes you from other people, and they'll say, 'Hey, this guy isn't a one-way street.' And always include a business card, even if they already have one."
Gear Up For Campaign Season
When it comes to tapping the political campaign market and preparing for a big election year in 2012, most distributors would be better off targeting local, smaller campaigns, according to Wendy Colucci, IS manager at KinaneCo Printing (asi/242466)."The local races rely heavily on printed materials," Colucci says. "The larger the race, the more likely that they will spend their money on TV and not print."
Distributors then must learn the standard election process in order to pitch the right products at the right time, Colucci says. "Campaigns have a cycle: designation, petitions, fundraising, campaigning, GOTV (get out the vote). Knowing when all of these things happen is half the battle," she says. "Have someone on staff who becomes an expert in that process."
Distributors can also obtain their local voter database from the local board of elections, which is free in some counties, Colucci points out. "From this, we are able to pull mailing lists for candidates based on voter history," she says. "Having someone who is familiar with the data is power. You should be able to tell the candidate how many people voted in their area in the past several relevant elections, and target their mailing accordingly. The more you know about the process, the more invaluable you become to the campaign."
Once those bases are covered, the key is to simply show up, according to Colucci. "Showing up at the events where the candidates will be has had the greatest effect for us," she says. "Each county should have a website that lists all of its candidates for the political season. You can reach out to each campaign individually."
Hold An Open House
Instead of holding one large open house for all of your current and prospective clients, Marsha Londe, owner of industry consulting firm Tango Partners, suggests distributors hold a series of smaller open houses. "Make each open house client-specific. Each salesperson brings in as many contacts as possible from within a single client," she says. "Then, have another open house for another set of clients.
"If the open house is too open, it's not manageable. This isn't a free-for-all, but an opportunity to meet, greet, inform and generate goodwill. Larger is OK with proper organization, space, and all staff involved and participatory."
Regardless of the size, Londe says any open house must include the following:
An accessible location with ample parking and directions to the event. "An open house can also be off-site if it's an end-user show," she says. "But poor directions and inadequate parking lead to frustrated attendees."
Attention to detail, "all the way down to the sufficient number of trash cans," she says.
Food that will actually be eaten. "It doesn't have to be expensive, but it must be attractive, appropriate and appealing," Londe says. "If it's a baseball theme, it's OK to serve hot dogs. But don't buy the cheapest buns. Make the food something people want."
Take-home bags with samples of usable and possibly themed products. "Anything that's not first-class reflects negatively," she says.
Londe says alcohol might not be a good idea for open-house events, especially for your staff. "Loose lips sink relationships," she says.
Percentage of industry revenue represented by each market in 2010. Check out the biggest growers on the right.