2018 is around the corner and a lot of dealers are going through the strategic planning process. Let’s say for the sake of this column that your company has done its planning and now you’re tasked to grow revenue by 15% next year. Your organization does a good job in traditional selling, but is always looking for new ways to be more valuable.
Let’s walk through a hypothetical example: For numbers’ sake, let’s say your organization is $40 million in 2017, thus making the revenue target $46 million in 2018. Let’s assume 80% of your growth efforts will be targeted and focused, while 20% will be more reactive due to the natural day-to-day business opportunities that arise.
Next, make sure leadership at your company agrees on the mindset. Here are some things to keep in mind:
- The only thing standing between you and your sales growth are people and the amount of value you can deliver for them.
- People are different, and a one-size-fits-all approach doesn’t work. Value is in the eye of the beholder.
- You want your organization to be the most meaningful to anyone who influences your success. Technology (with a relationship mindset) can help with this.
Now make sure you know your targets. Be sure to identify specific companies and the specific people within the target companies. It might not hurt to buy a list from InfoUSA.com, from which you can specify location, sales volume, business classification and a dozen other metrics.
Grab an intern to research online or drop by face-to-face to ask open-ended questions of potential customers. Hand out a $10 gift card when they’re done with their five questions and can provide you with contact information of few people who work there. Pay someone to dig online and develop a bio on each person. Incentivize sales personnel in your organization to collect names, data, etc.
Ask your manufacturers who they would like to see use a higher-end product at the builder/remodeler level. A few of them might tell you “XYZ builder is perfect because the area supports a higher-end product but I think they struggle selling the value.”
With knowledge in hand, getting customers to say yes to you as a friend and confidant will be easier and the product and service sales will follow.
For our example, our research (of course this is an estimate) identified 40 target companies with $18,000,000 worth of new business opportunity. Additionally, we’ve found 187 people affiliated with these companies who can help us capture some of that business. These people are owners, general contractors, buyers and even code officials or architects.
Your ability to land more of these sales is directly connected with your ability to remove pain and fear. Often times we get excited about “the upside” of what we have to offer as a business while ignoring the potential downside that truly motivates the person making the decision. For every person on this list, we must do our research to pinpoint potential downsides they fear or are currently experiencing—and figure out how to remove those—even if it’s something you can’t bill for through a product or service.
When you want to hear yes, you want to build a relationship with anyone who can influence your decision. Not everyone can help you in the manner you wish, but a number of non-decision makers can certainly hurt you in your quest to sell more product. With that said, you have the opportunity to build relationships with others in the channel that you traditionally wouldn’t spend time and dollars calling on.
Know the math. What will you sell them?
The estimated $18,000,000 in sales at a desired 25% margin. The top five product categories being decking, railing, siding, windows, and millwork. Ignoring market lift and price increases, we need 33% of this new business in order to hit our $6 million target in new sales.
Your goals are in the hands of your sales people, and 187 people are standing between you and $18,000,000 of revenue. Better yet, 187 people are standing between you and $4,500,000 of gross margin. As an average, one person = $101,124 of revenue. More importantly, one person = $24,064 of gross margin to your business.
We’ve laid the financial groundwork and the exact people we need on our side is clear. In Part 2, we dive in and come up with creative strategies get more people to say yes to you and your organization. From sales tips to drone videos, you’ll undoubtedly be able to take a few ideas and apply them to your business immediately.