Thursday, July 16, 2009

Strategies for Sales Channel Development: How to find new customers or clients.

Thank you to all the people who sent me emails with questions and comments to the last Blog. I really appreciate your feedback.

This is a continuation to my prior Blog entry where I was talking about the 60 mile comfort zone. In the last Blog, I asked some questions for you to think about. In this Blog I want to ask some additional questions:

How does this potential customer (as outlined in the prior Blog) purchase products?
What is the key factor to that customers purchase decision?

In the last Blog I listed some statements of the target market of companies. For example:

“I am looking for the manufactures that use precision machined parts made out of Titanium any where in the US”. This is the target customer of the Titanium R US Company.

Let’s think of the person that makes the decision to purchase Titanium parts from the Titanium R US Company for a moment. What drives their decision?

In this scenario, Bob Robert’s is the VP of Engineering at BobCo, who is making the decision which vendor to select for his company’s Titanium parts.

Let’s try for a moment to profile Bob:

What is Bob’s background?
What is the capacity of Bob’s company?
Are they looking at Make it vs. Buy it?
Are they checking out other vendors?
What is Bob’s biggest Fear?
What makes Bob Happy?
What are his personal interests?

Once we have profiled Bob as a typical customer of our company, we can then determine how our company can best meet Bob’s needs. At this point we can now look at Sales Channel Development. The needs of the target customer should determine the sales channels needed to expand your company outside of your 60 mile comfort zone!

In the Industrial Sector companies have used sales agents, and distributors to meet the needs of their customers. In the Retail Sector, companies have sold product through stores to consumers. Keep in mind that you can develop more then one channel to meet the needs of Bob, and the other potential customers profiled in the prior Blog. For one client I identified 6 different target populations, and then set up unique distributors across the United States that targeted each of these markets sectors. In every case I also had only one distributor in any given geography for each of the 6 targeted markets to avoid channel conflicts.

Let’s go back to Bob Roberts again and fill in some of his information as an example of how to develop a channel. This example information is based on my experience in the industrial sector.

What is Bob’s background? Bob is an engineer who likes to work with other engineers. He feel that they “Speak his language”, and he respects another engineers opinion.

What is the capacity of Bob’s company? Bob’s company has internal manufacturing capability but they do not have the expertise or machinery needed to work with Titanium.

Are they looking at “Make it vs. Buy it”? Bob’s company does not want to make the investment needed to bring Titanium manufacturing in house.

Are they checking out other vendors? Yes they always check out multiple vendors.

What is Bob’s biggest Fear? That the project will be behind the schedule and his company will need to delay the shipment of a critical component to their customer.

What makes Bob happy? Not having to worry about meeting his goal. Being able to leave work at a reasonable time, since his vendor is supplying him quality component on time.

What are his personal interests? Going for long fast bike rides.

Wow! By talking to Bob and asking him a few questions, we are able to understand his needs and develop a plan to win him as a customer. Using this plan we can then expand our sales team to meet the needs of people like Bob across the country. Let’s look at Bob’s answers and generate a Sales Channel Outline to meet his needs:

Our Sales Person needs to be an Engineer who can establish credibility in his relationship with Bob. Bob want to know that his components are being built in a timely manor so he does not worry. The Sales Person needs to communicate with Bob the status of his parts on a regular basis.

Based on these goal we can set up either a team of independent sales representatives, or direct employees, who are degreed engineers to address Bob’s needs. Independent reps offer an advantage of having long term established relationships with target companies like BobCo and providing Bob Roberts with a range of solutions to his problems beyond his need for Titanium machined parts. With either option, the sales person must keep in touch with to make him feel comfortable and happy.

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