Here are seven great ways electrical distributors can avoid the dreaded “revenue plateau” by getting to know their customers, figuring out how to solve their biggest pain points, and then selling them more products and services.
In the first segment of this article series, you learned why it’s critical for electrical distributors to put time and effort into doing more with their existing customers. By avoiding the temptation to funnel all of your sales team’s efforts into chasing down new business, take a step back and see what more you can be doing for current customers, how you can claim more of their spending capacity, and how you can help resolve their biggest pain points.
Here are seven ways to start doing this today:
- Don’t try to be Amazon. Business leaders love to go head-to-head with their competitors to see who will ultimately win the race. As we’ve already seen across many different industries, this doesn’t work with Amazon. Already too big, too advanced, and too well ingrained in customers’ minds, this e-tailing behemoth stands on its own when it comes to B2C and is well on its way to making the same inroads in B2B. “The only way you’re going to differentiate yourself from Amazon and its low prices/fast shipments, is by bundling your offerings with value-added services,” says Alex Alexandrov, business growth and efficiency expert and CEO at ICC, Inc. “Service is Amazon’s Achilles heel, so if you can show that the service takes overall costs down compared to Amazon, that’s where you’ll win.”
- Develop loyalty programs. Do you shop at certain stores that award you loyalty points for purchases, and that dole out rewards for your loyalty? Well, your customers do too. Distributors can transfer this approach to the B2B world by rewarding their buyers when they hit certain purchase thresholds, try out a new product, or meet another requirement. At Rexel’s San Diego branch, for example, the distributor hands out ice chests filled with ice, water, and Gatorade to customers who spend a certain amount of money at the counter during the hot summer months. This is just one fairly easy way to not only keep current customers coming back for more, but to also entice them to buy more from you. “Loyalty programs are a great way to make your customers buy more from you in exchange for getting a little more,” says Krunal Rindani, an independent sales and marketing consultant. “It’s a win-win situation.”
- Use upsells and cross-sells to create a one-stop-shop. Upselling is the practice of encouraging customers to purchase a comparable higher-end product than the one in question, while cross-selling invites customers to buy related or complementary items. Both can be great tools for getting those clients to buy a little more than they intended to when shopping with your distributorship. Rindani says the best first step is to think about what the next logical move is for the customer who just purchased a product. “Basically, after buying your product, what is the next product they’ll need to be able to use your product effectively?” he asks. “Think about these points and make a value ladder.” In other words, consider all of the possible products a customer may want to purchase—from the smallest item to the largest item. Then, incorporate these items into logical sequences and sell them all to your customers. “They’ll be happy that they got a one-stop-shop solution,” says Rindani, “ and you’ll be happy that you increased your company’s top line.”
- Focus on the offer versus the project. A lot of companies never really think about whether they’re selling an offer versus a product. This is particularly true of distributors that cut their teeth on product sales, but that are now having to switch up their models and offer packages that also include services. One way to shift that thinking is by looking at the new needs your product might create: Are there any guides or instructions they need? Do they need any prior knowledge or assistance to use your product? “If the answer is ‘yes,’ and it nearly always is, develop a tutorial on how to use your product,” Rindani says, “and consider selling products that will complement your existing offering.”
- Extend your offerings. If you rely heavily on one or two standard offerings, try creating one that is a “step up” from what your current customers are using. Step it up in terms of both the offer itself and its pricing. “Center your new offering around more 1:1 time with you and your support staff, advanced content, or whatever your customers would benefit from and love to buy,” says business consultant Stacy Caprio, founder of Growth Marketing. “You’ll be able to market it to past customers and also use it as an offering for new customers. This may raise your average order value and also allow you to double-dip and get a bunch of new higher-end orders from your best existing customers.”
- Bundle new offerings in with your original product. This will not only help beef up individual sales tickets, but it also allows distributors to actually get paid for the value-added services (i.e., kitting, installation support, vendor managed inventory, etc.) that they routinely offer their customers. “When you bundle, you can charge more without having your product coming off as being ‘too expensive,’” says Rindani. “While your customers might find the product alone to be expensive at that price, because you’re giving out bonuses and extras, you’ll be able to break through those barriers.”
- Get personal with your customers. Come up with interesting ways to show your existing customers that you care about them and that you’re interested in maintaining (or growing) their business with your distributorship. In India for example, Shoppers Stop’s continuity program—which rewards customers for their loyalty in very personalized ways that go beyond just “here’s a 10% coupon”—has helped the company fend off other online retailers that have tried to invade its turf. “When you think about it, Amazon doesn’t offer much of a continuity program,” says Rindani. “You get discounts if you buy in bulk, but that’s about it.”
Tagged with best practices, sales