Becoming A Digital Distributor: Is The Gain Worth The Pain? April 23, 2017 Colorado Convention Center Room 203 8:30 AM to 9:30 AM & 9:45 AM to 10:45 AM Denver, Colorado
For Your Convenience Download a PDF of this Presentation 2 1.Go to www.ircg.com and click on the Client Downloads tab 2.Enter User Name: ISAROCKS and Password: 2017-R2D2 and click on the Login button 3.Click on the Presentations folder to open it 4.Navigate to this presentation (it will be the only one in the folder) and click on the Download button 5.Depending on your browser, a pop up window will appear where you can select whether to open or save the file WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
Agenda 3 What is the challenge and why most will fail? The past proven best practice of reacting quickly to an What does it look like when you opportunity or threat are done? will not work as there is no tipping point and What is the price you need to the failure rate is pay? parabolic WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
NIDA + SIDA = IDA + Time = ISA So What Is Next? 4 Plus how many nontraditional competitors have decided to get in here as well? When there is a disconnect between GDP growth and your growth, the gaps are revenue losses to unseen and non traditional competitors WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
If Your Firm Died Would There Be Any Shortage Of Firms To Replace You? The Current State Of The Industry 5 There are declining benefits to scale when there are no longer any extra 5%’s from suppliers for extra volume and organizations become so large that they lose their ability to be responsive Consolidation means to make stronger and it is measured by concentration; the total share of the market enjoyed by the five largest competitors This industry is consolidating quickly Now throw in the transition to digital, the emergence of non traditional competitors, the aging of the workforce, the entrance of millennials, changes in customer buying behavior, continued supplier consolidation, the Internet of Things, the transition from selling products to selling services (e.g. Lasik & RR & GE), and the high reliability of today’s supply chains reducing the value of unneeded heroic recoveries Will tomorrow’s winners be doing the same things they are doing today, only better? WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
So What Is Your Investment Horizon? 6 You are committed to keeping the business by either bringing in a professional CEO, or competent children, along with a board Then you need to start spending money and managing a huge organizational change project You are planning to sell it in five years or less to a PE firm, a strategic buyer, or an ESOP Then you need to put some lipstick on the pig and maximize your EBITDA to improve your exit position You aren’t going to decide now and keep your options open You business is worth as much today as it ever will be WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
The Digital Transition Fits Many Of The Criteria For A Perfect Problem Solving The Perfect Problem- Getting Unstuck 7 The only problems you have left are the perfect ones. The imperfect ones, the ones with a clearly evident solution, well, if they were important, you've solved them already. It's the perfect problems that keep us stuck. There's no way to solve the perfect problem because every solution involves breaking an unbreakable constraint. And there's your solution. The way to solve the perfect problem is to make it imperfect. Don't just bend one of the constraints, eliminate it. Shut down the factory. Walk away from the job. Change your product completely. Ignore the board. If the only alternative is slow and painful failure, the way to get unstuck is to blow up a constraint, deal with the pain and then run forward. Fast . WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP http://sethgodin.typepad.com/seths_blog/2010/07/getting-unstuck-solving-the-perfect-proble.html
Agenda 8 What is the challenge and why most will fail? Selling stuff on the web is actually, and unfortunately, a small part of the required What does it look like when you change as your real issue are done? is becoming digital What is the price you need to Notice that it is getting pay? harder to get personal appointments? WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
Source: SalesGPS 360 Sourcing Preferences 9 Millennial/Gen Z <34 Gen X 35+ Boomer 50+ Buyer Age Highly Small Electronic Hybrid Electronic Customer Electronic Hybrid Personal Medium Customer Highly Large Hybrid Personal Personal Customer If the only tool you have is a hammer, everything looks like a nail So if you only have field sales or specialists, but lack digital and inside selling resources, you will increasingly lose alignment with how your customers buy WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
Specializing The Sales Generalist Lowers Overall Selling Costs 10 FAM IAM CSR Category Technical Telesales ISR- Inbound Field Account Inside Account Customer/Counter Role Specialist Outbound Inside Sales Rep Manager Manager Service Rep SAM, AM, TM, AM, IAM, Typical Titles ISR, CSR CSR Many TMR, TSR FSR, OSR Segment AM Primary Business solutions and Technical and Transactional Technical Awareness SOS* Relationship transactional Customer Yes, by dirt or Periodically, by None Yes, by dirt Yes, by dirt or segment No assignment segment need or project but working off a call list >80% Partial with a <5% >50% % in field None None Own car shared car No car Own car CSE % CSEs Ranges from Sent out as >75% <5%` 5% to 25% interception, intercepted 5% to 50% they occur RFM tickler None. Customer Primary but often Subject Matter They generate activity Relationship Primary Primary Supportive shared with Field reps Expert that warrants the Equity Role attention of a rep Customer Set changed ~30 ~100 Several hundred <200 ~30 Capacity periodically 2-8 WWW.IRCG.COM * S ervice O utputs S upplied to your customer- what they are actually buying INDIAN RIVER CONSULTING GROUP
Multichannel Requires Situational Self-Selection 11 Single channels to market (think field sales territories) still exist because they are hard to change but increasingly create revenue leakage as customers choose alternatives Markets and channels evolve with power constantly flowing downstream to the customer so the primary rules for channel design are: 1. It is not about you 2. It is about them 3. If confused, follow rules one and two Customers get to self-select based on their circumstances and values and will frequently and legitimately make variable choices Good multichannel design should make the choices clear- think cost to serve 2-7 WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
All Account Assignments Become Temporary With Leading Evolving To Supporting The Multichannel Consequence For Field Sales 12 3. Field Sales Leads 4. Punchouts & LOOP* * Lights Out Order Processing Expand share of wallet Inside sales leads with using team members and specialists introducing specialists You have sticky customers along with special with reliable service services Field sales is on call, as 2. Field Sales Leads necessary, by your team Prospect with provided marketing analysis on cost 1. Telemarketing to grow and potential to grow What % of your sales E-catalog or Amazon calls are on the right Easy to buy & “once and Your value proposition is side of the model? done” explicit and key 2-9 WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
This Is External But Internal Is A Huge Opportunity For Most Lifestyle Distributors Small Apps That Make Customers Sticky 13 Barcode sticker with your name that links to the system bill of materials and a one click to reorder any part Deck icon of your sales rep that links directly to the text service (or WhatsApp) on their cell phone (then pulled into CRM client data) Dominos pizza app to show where their order is in process Mini catalog, last 100 SKUs purchased, current quantity on hand, their price, click here to reorder button Order/Invoice automation WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
All Dollars Of GP Are Not Created Equally- Your Strategy Defined The Differences You Must Become Analytically Led And Strategically Driven 14 It is the compete opposite of the entrepreneurial quick reacting business model • Think intentional versus reactive, process versus people, horizontal decision making versus vertical, accountability over loyalty Start by defining the end and then working backwards • It is the good idea tester of what to do next • More importantly it tells you what not to do • You must have a management review rhythm or nothing will happen This is the ante to play in turbulent times WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
Agenda 15 What is the challenge and why most will fail? You will invest almost all of your available cash, borrow money, What does it look like when you and terminate a few are done? loyal and long tenured employees who can’t, What is the price you need to or won’t, make the pay? transition WWW.IRCG.COM INDIAN RIVER CONSULTING GROUP
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