Hook more customers

Follow this advice to learn how to convert customers from their favorite brad to our favored supplier.

by Richard Vurva

Distributors can save money and effort when they funnel as many sales as possible through a handful of suppliers. Some of the benefits include greater purchasing power, fewer shipments and receipts, and a stronger relationship that grows commensurate with the amount of business the distributor sends the supplier’s way.

Convincing a customer to switch from one supplier to another without sacrificing quality or price is a delicate balancing act. Here are tips to help salespeople through the customer conversion process.

Money talks
Reducing the number of suppliers you work with is a win-win proposition because it benefits everyone in the channel, says Jeff Kranzler of Iowa Machinery & Supply in East Moline, Ill. When his company reduced its supplier base in 2002, Kranzler explained the move to customers by showing how it saved them money.

“The more money you spend with one supplier, you’ll typically earn better discounts, get better deliveries and greater negotiating power, which ultimately gets passed on to the customer,” he says.

Plus, going from 12 brands to six in a given product category helps the company improve its fill rates. With fewer brands in stock, Iowa Machinery & Supply can maintain more stock keeping units (SKUs) from each supplier, greatly improving the odds of having the specific SKUs customers required.

Dealing with fewer suppliers also lowers the customer’s inventory costs.

“Every time you can eliminate an SKU out of a customer’s product mix, everyone wins,” says Kranzler.

Focus on benefits, not features
Customers don’t switch suppliers because of a product’s specific features. They switch when they know how those features can benefit them. What’s the difference? A feature explains what the product is or does. A benefit explains why it’s important to the customer.

Warren Wechsler, a Fairfield, Iowa-based sales trainer, author and speaker on sales-related topics, suggests that salespeople should apply the “so what?” test to determine if something is a feature or benefit. If you can say “so what?” to someone’s claim, then it’s not a benefit to you.

Saving time is a key benefit. Saving money is another. It doesn’t mean lowest price; it means that if your overall solution can help someone save money, they’re not likely to respond by saying, “so what?”

If you tell a customer that your Type 27 flap discs are made from zirconia alumina with phenolic resin backing, he answers with, “So what?” But if you tell him it offers aggressive cut and longer life, blends and finishes in one operation, requires no back-up pad and provides maximum contact with the work surface without loading, he will understand its benefits and won’t likely say, “So what?”

“Go into your own company and figure out aspects of your business that are feature-related and convert those into benefit statements,” Wechsler says. “Don’t make your customers and your prospects work so hard to leap to the benefit in their own mind.”

Prove yourself
Convincing a customer to switch suppliers requires more than a silver tongue. You must demonstrate how your product will enhance your customer’s productivity or save costs, says Scott Heller of  Took Krib Supply, the cutting tool division of New Jersey-based distributor Madsen & Howell.

“You have to develop a relationship and get them to trust you,” he says. “But you also have to show them actual results, which means running tests.”

Heller says successful cutting tool salespeople today serve more as sales technicians than sales reps. They must retain enough product and application knowledge to spot weaknesses in a customer’s operation and know how to apply their product to produce better results.

After providing samples and running tests, the final step is to walk the customer through the documentation that demonstrates how your product can benefit their operation.

“Documentation takes time and work. Anybody can write documentation that makes them look favorable. You have to produce real results,” Heller says.

Over time, as customers gain confidence in your ability to bring them the latest technology, they become more willing to switch brands based on your recommendation.

Minimize customer risk
When a customer is satisfied with their current brand, making a change is risky.

To minimize that risk, you might need to do more than provide a product that performs as well as or better than what the customer currently uses. For example, you may need to offer training the customer’s existing supplier doesn’t provide, or packaging or delivery services not currently available.

“Find out what’s important to the customer so you can show them if the reward you offer is worth the risk and hassle of changing brands,” says Robbie Johnson, vice president of sales for Arc Abrasives in Troy, Ohio.

Most important, find out where the competition is most vulnerable.

In one case,  Arc teamed with a distributor to visit a production belt application. Armed with specially prepared test samples, their goal was to demonstrate how their product could outperform the incumbent supplier’s product.

The prospective customer was leery but agreed to let them run some tests. The tests proved that Arc’s belts were a better fit for the application.

“The point is, we knew our product and the customer’s need. It’s important to know where your brand matches the market needs and work from your point of strength,” he says.

Simplify your offer
Make it easy for a customer to switch from their current product to your product.

When it wanted to convince manufacturers to switch to its reusable cloth towels, Kimberly-Clark Professional devised the WypAll X Challenge. It guarantees 10 percent cost savings to end-users who replace their scrap rags or rental shop towels with Kimberly-Clark’s Wypall X Wipers for 60 days.

The program is a better way to convince a customer to make a change than methods its salespeople used in the past, says Ralph Solarski, manufacturing segment manager. The way salespeople used to demonstrate cost savings was to explain how to accurately measure the cost per wiper, which is complex.

Say a manufacturing plant rented 1,000 shop towels a week at 10 cents a towel. Each week, the rental company sent the manufacturer an invoice for 1,000 towels.

In addition to the rental costs, the supplier also assessed an automatic replacement charge to cover the cost of lost or damaged towels. Plus, the supplier added an environmental charge to cover the cost to process hazardous materials. And even though the supplier invoiced the manufacturer for 1,000 towels a week, the company might use just 800 towels one week and 750 the next, meaning they paid for towels they didn’t need.

“If I’m in front of a buyer and I explain all of that, their eyes roll back,” says Solarski. “It sounds like a sales pitch. To get past that, it’s much easier just to say, ‘What did you pay over the last 60 days for your shop towels? I can guarantee you’ll pay at least 10 percent less using our product. If you don’t, I’ll pay you the difference.’”

This article originally appeared in the May/June 2003 issue of Progressive Distributor magazine. Copyright 2003.

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