Exclusive Features

6 tips for reaching new markets

By Bridget

Opening new
sales channels. Exploring new geographic territories. Tapping into new customer
bases. If any or all of these goals are on your distributorship’s “to do” list
for the fourth quarter, now is the time to sharpen your pencils and come up
with a plan of action for getting that new business – and keeping it.

Maybe a
customer is pushing your distributorship to expand geographically or perhaps
one of your suppliers is offering joint marketing opportunities for new
customer segments. Whatever the driving force is, here are six tips you can use
to launch your expansion effort and keep it moving in the right direction:

  1. If
    you’re expanding geographically, put some seasoned “feet” on the ground in the
    target market.
    Don’t try to open a new branch in an unfamiliar location
    with a brand new manager. “Get someone in there who already knows the market
    and its nuances,” suggests Jeff Rogers, vice president and sales manager at
    Holder Electric Supply, Inc., in Greenville, S.C. “So much of what we do as
    distributors involves relationship selling. That’s extremely tough to
    accomplish when you don’t know the market inside and out.” To overcome that
    challenge, Rogers says staffing the new location with one or more employees who
    are familiar with the market, the target niche, and/or its customers can “make
    the expansion process much smoother.”
  2. If you
    don’t have the talent on staff, look around at other distributors.
    employees mentioned in tip No.1 don’t necessarily have to be homegrown. In
    fact, Rogers says he’s seen distributors break into new markets by hiring
    managers and employees from companies already operating in the target towns or
    cities.  “The assumption is that those individuals already know the
    marketplace,” says Rogers. “Sometimes that’s the strategy you have to use to
    find your ‘lead dogs’ and ensure a successful transition into a new geographic
  3. Do your
    homework and market research before setting up shop.
    Some electrical
    industry trends are national in scope but others are limited to specific
    markets. Take solar, for example. “It’s huge on a national basis,” he explains,
    “but power is cheap in our area and no government money is being pumped into
    solar efforts, so we really aren’t seeing a movement in that direction yet.”
    Take the time to explore the key trends in your target market before setting up
    shop, Rogers says, and you’ll avoid early missteps and limit losses on the
    front end.
  4. Divide
    your sales efforts across four key business quadrants and then tackle them
    When approaching new market opportunities, Rogers and his
    team focus on four quadrants:  old products, new products, old customers, and
    new customers. Old business from old customers is the easiest target because
    it’s uncomplicated and familiar. However, this is also the lowest margin
    business. Peddling new products to old customers can be an easy sale, but
    getting prospects to think past their “typical” orders may take some extra
    effort. Selling old products to new customers takes more elbow grease and
    depends on the development of new relationships, while new products to new
    customers – the highest margin opportunity – is the most difficult and
    rewarding. You can overcome that hurdle by “educating yourself before you ever
    get in front of a customer,” says Rogers, “and by combining that knowledge with
    real-life examples and demonstrations to illustrate a product’s value for your
    new customer.”
  5. Always
    have your ear to the ground for new end market opportunities.
    When helping
    distributors assess new markets, Shelley Wald, president at lighting
    manufacturer WAC Lighting in Port Washington, NY, reminds them of the cereal
    companies that completely missed out on the early stages of the “cereal bars
    for breakfast” trend. “It was outside of what traditional cereal manufacturers
    considered to be within their ‘spaces,’ so a lot of them ignored it,” recalls
    Wald. “Now they are scrambling to catch up.” The lesson for distributors, she
    says, is that missing out on early-stage opportunities can be costly. “There
    will be a lot of recovery work to do if you’re not in touch with marketplace
    trends,” she adds, “particularly if they require you to break out of your
    traditional space.”
  6. Use
    technology to your advantage when tracking trends and identifying new
    Good business intelligence is easy to come by these days
    thanks to the web and social networking sites. A few hours spent reading
    through industry blogs, Facebook pages, Twitter feeds, and online news feeds
    can pay off when assessing new markets and territories. Customer websites (for
    information on changes in their business environments and their own expansion
    plans), and supplier websites (for marketing information, new product releases,
    and general industry trends) are both good sources of intelligence that
    electrical distributors can use to make smart expansion decisions.

McCrea is a Florida-based writer who covers business, industrial, and
educational topics for a variety of magazines and journals. You can reach her
at bridgetmc@earthlink.net or
visit her website at www.expertghostwriter.net.

Tagged with

Comment on the story

Your email address will not be published. Required fields are marked *