by Reed Stith

Choose target markets
Determine key markets to penetrate, both existing and potential. Prioritize the opportunities based on profit potential and match with your strengths.

1) Internal audit

____ Evaluate existing sales, marketing and financial

information to sort sales by industry, geography, account, application and competition.

____ Evaluate manufacturer and distributor strengths, weaknesses, opportunities and threats (SWOT) in terms of what matters to the customers. Survey customers, the distributor and manufacturer.

2) External audit

____ Utilize secondary research (association data, published studies, trade magazines) and primary research (mail or phone surveys, focus groups) to identify and prioritize potential sales by industry, geography, account, application and competition. This

step involves information sharing between distributor

and manufacturer, including knowledge of specific applications and accounts.

Conduct field trips
Visit key customers to develop the road map for the manufacturer and distributor sales forces to follow when attacking the target markets.

1) Visit existing and potential customers to understand their perspective.

Document the customers processes to produce finished products from raw materials. Where are the bottlenecks and inefficiencies? What issues concern the customer the most? Learning these answers will help you understand the costs involved in the customers business. Next, identify where your products and value-added services fit into the customers needs. What can you offer that is so valuable the customer will pay for it? These initial field trips will make selling easy, because you are speaking the customers language. You should be able to determine the actual cost savings your product or service will generate for the customer, such as faster production, reduced scrap, lower labor expense, decreased warranty claims, fewer shipments to receive, etc.

Once you understand the customers primary problems and how your company can help, you must uncover the system the customer uses to make the purchasing decision. Who has the most influence: purchasing, production, maintenance, design engineering? Is it a team decision? Who can say no? Who must say yes? Determine where, how and why customers buy:

____ Where: direct, specialty distributors, catalogs

____ How: purchase orders, integrated supply agreements, maintenance credit cards

____ Why: availability, price, delivery, technical support, ease of use

____ Also, identify which applications of your products and services offer the highest value to the customer. Sort them in priority order, from the customers viewpoint.

Find out how customers prefer to receive new product and value-added service information. Do they prefer training schools, joint calls with manufacturers and distributors, or periodic faxes or e-mails? Which trade shows do they attend, and which trade magazines do they read? Finally, when preparing training materials for the inside and outside sales staff, gather the following information:

____ Determine the 10 most frequently asked questions (FAQs) from purchasing, engineering, maintenance and general management.

____ Identify the 10 most common customer objections.

____ Get input from manufacturer and distributor sales forces to come up with the best answers.

____ Determine annual usage of your products or services. To help with forecasting, find the variables that relate to this usage. For example, does annual usage correlate with the size of the plant, number of employees or the number of finished products produced? Find one or two bridge factors that can be used to estimate potential sales at similar customers.

2) Get input from distributor management and salespeople.

A smart marketing partner will get input from the management, inside sales and outside sales forces of several key distributors. Often, a distributor advisory board fills this function. The key objectives are to:

____ Identify major (non-price) obstacles to penetrating the target markets (specifications, competitors strong brand, lack of customer understanding, incomplete product line, government approvals).

____ Identify the distributors needs and concerns with the target markets (sales leads, training, literature, competitive information).

____ Determine complementary products and value-added services distributors offer target markets. This helps illustrate the total value the distributor can provide as part of the new marketing program.

____ Understand the distributors sales and marketing priorities. This avoids the trap of introducing a new product or service that conflicts with the goals of the distributor.

Develop marketing support tools
Only now, with information from the previous steps, can you create tangible marketing tools such as literature, videotapes and demonstration displays. The following is a good place to start.

1) Explain the background and dominant issues in the target industry.

2) Review growth trends in the target industry.

3) Describe legal and regulatory factors that a sales force needs to know. Supply the proper documentation of approvals, etc.

4) Identify existing and potential sales volume by specific geographic area. Dont make vague promises about the new opportunity.

5) Include specific account information, customer names and contact details. Help the sales force accomplish quick successes.

6) Include specific sales potential by account, using bridge factors.

7) Explain how the industry makes buying decisions. Give tips on how to work within the culture of the industry. Provide examples.

8) Demonstrate how to use sales aids. Have an adequate supply of items so everyone can practice.

9) Reinforce value that differentiates the product or service. Help overcome price objections.

10) Focus on benefits that help address the customers priorities. Use documented case studies from pilot programs to prove benefits.

11) Integrate all sales tools, such as local ads combined with direct mail prior to a local trade show, followed by scheduled sales calls using new demonstration kit. Suggest a schedule for all marketing communications in support of target market effort. Make it simple.

12) Provide adequate lead time to implement mailings and customer training seminars.

13) Provide a planning system for the distributor sales force to:

____ Establish specific plans and measurable goals by account.

____ Determine specific sales tactics to use with each account.

____ Commit to timetables, based on most likely successes first.

____ Identify out-of-pocket costs, and who pays.

14) Agree to monitor results on a regular basis (at least quarterly).

Reed Stith is principal of IDC3, a distribution consulting firm. He can be reached at or at .

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