Sales Laundry

Posts Tagged ‘competition’

I found myself in Walmart today finishing up some pre-Easter shopping and as I was waiting behind a lady with 27 items in the 20 item checkout lane I started thinking.

 Walmart is still making money and growing when the majority of their competitors’ sales are down by double digit percentages.

 What immediately comes to mind is the fact that they are the perceived “low price leader.”  That can’t be right though, because I have long accepted as fact that a strategy of being the “low price leader” is not a strategy that can sustain a business in the long run because low price strategies only hold up until the next guy shows up with a lower price.

 She still has 15 items in her basket.  How did she cram so much stuff in that little carry around basket?  No barcode on the Easter apple cover looking thing… 

 Walmart uses a host of strategies to be sure, but there are at least two that came to mind that are worth copying, and neither involve cutting your prices and praying for volume sales.

 1.  Walmart puts a relentless focus on finding any efficiency they can to get a product from the manufacturer to their distribution centers and ultimately their stores.  (They forced the issue with Electronic Data Interchange, or EDI, now an industry standard, and have recently nudged cereal companies to make smaller boxes that hold the same volume to reduce shelf space and paper waste among other things.)  As a result, it costs Walmart less to get a product on their shelves than it does their competitors, so an item for sale for $9.95 at Walmart and X Brand stores will likely have a lower true cost at Walmart.

Where competitors cut their price and profit to get in line with Walmart prices, Walmart cuts their cost, sells it for less and still makes more money doing it.

 
2.  When Walmart began, Sam Walton had a radical idea of putting stores in towns that were deemed too small for other major retailers, effectively going where the national competition was not willing to go.  This strategy continues to pay off even today as major retailers fight it out in every major metropolitan market, including Walmart, but Walmart has hundreds of stores in markets where there is no real competition and where future major competition is unlikely. 

 She has 7 items left in the basket, looks like egg dye, bubbles…

 Where can your costs be cut or efficiencies found between the idea stage and final sales/delivery? 

 Can you buy from your manufacturer/distributor differently to garner some savings?  Can you consolidate to a single distributor or is it time to see how hungry your distributor’s competitors are?  Maybe join a larger buying group?  Partner up to buy bigger shipments to get to the next break in tier pricing?

How many hands have to touch the products you sell or the orders for those products?  Is there an opportunity to negotiate, automate or eliminate some duplication?

 Look at your Cost of Sales.  Without damaging customer service, what is the most efficient, least time consuming way to sell each of your products?  Now, how are you selling each of your products?  Any appreciable room for improvement?  What admin tasks could you off load from your sales team to get them more customer face time?  Click here if you would like to go a little bit deeper discussing Cost of Sales.

 2 items left.  Why do they always put the slow Checkers on the Express lane?

 How can you follow Walmart’s example of having a presence where there is no real competition? 

 Is there a niche where you can plant your flag, dominate, and protect your margins?  Can you create that niche by building a rabid referral customer base like Joe Girard did?

 She is helping the Checker sack her goodies.  Finally.  At least she is helping sack the items.  There should be a faster way to check out when you only have a handful of things.

*beep*  *beep* *beep* Scanned, paid and done.

 “Sir, next time you could use one of the self check out stations if you are in a hurry.”  My Checker said.

 Guess that is a sales lesson I won’t be blogging about.  Too busy thinking.

 “Thank you for shopping at Walmart!”

Image courtesy of RichSellsHomes

What is your competitive advantage?

I love that question because it gives me an immediate understanding of a sales reps grasp of their own offerings and provides a small perspective into their understanding of their competitors.

The answer to that question can be key in some cases in determining the reasons for the success or failure of an individual sales rep or an entire sales team.

Let’s take an example from the oft in the news automobile industry. I will qualify all of this by saying I do not and have not ever sold cars. This is an example to illustrate a point.

If I only sold new Ford F150 pickups I would consider it critical to my success to understand everything I could about feature packages, engine choices, trim levels and available options so I could match the needs of my prospective client with the best combination of features that would serve his needs and what I had on the lot.

I would also want to understand what I had in inventory, what my competitors have, and what I could get my hands on in a reasonable amount of time to satisfy a customer request.

Next, for me, would be to talk to my service department and get an understanding of the vehicle from a service perspective. What parts tend to break more often? What should my client keep an eye on to avoid costly repairs? Are there any specific problems with certain engines, transmissions or trim levels?

I would also study the commercials to understand what the Ford marketing department is hanging its hat on when trying to entice the consumer to buy their trucks. Where it makes sense, I would blend their message with mine to leverage the ground work Ford has already done.

I would also need to know why my new F150 and the depreciation it would take as soon as it rolled off the lot was a better value for my customer than last years model, or any other used Ford truck still on the road. If I only sell new Ford trucks then a used Ford F150 is every bit as strong a competitor as a Chevrolet, Toyota, Nissan or GMC.

Where, when and why is my new F150 a better value than my competitors’ vehicles. To understand that, I would need as much knowledge about my competitors new trucks as I know about my own, including their used models as well.

Amassing and internalizing all of this information amounts to what could be a strong value add for my prospective truck customer. Even the ones showing up fully armed with internet research.

The more information I have at my disposal to answer questions and eliminate the need for my client to go look somewhere else, the more likely I am to sell a truck.

There are several other factors that go into being a successful rep that I glossed over. Here I am speaking specifically about leveraging what you know into dough.

I ask again, what is your competitive advantage?

Why should I buy your product over your competitors? What value do YOU bring as the representative? Why should I buy my widget from you instead of number one sales guy Dave over there?

Make it easy for me to buy, help me understand the value you bring, and why I should buy from you vs. your competitor and odds are, assuming I believe you and recognize your value, I will buy from you, all other things being equal.

Chinese general Sun Tzu, living some 2,400 years ago, give or take, put it a little differently…

If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.
- Sun Tzu

Or perhaps more concisely put…

Keep your friends close, and your enemies closer.
- Sun-Tzu

image provided by theblogentrepreneur.com

I am always looking for unique ideas to stand out from your average (sales) bear with clients and prospects alike.

 For some prospects that are deemed critical to the success of a territory I will sometimes step way out of the box to capture that prospects interest or make them at least curious to hear what I have to say.

 To that end, I recently stumbled upon www.sweetpics.biz.  Sweet Pics can take any digital image and print it directly on chocolate, and yes, you can eat it.

They can take your plain white business card and create a chocolate version that looks like they just taped your business card to the top of a business card sized piece of chocolate.  The edible business card weighs one ounce and comes with a case for each card so you don’t have to worry about the logistics of handling a chocolate business card.

If you want to rev it up a bit more they make a package that looks like a standard box of chocolates with a clear lid that has your business card, in chocolate, front and center surrounded by various truffles and chocolate treats.

I have not tried them yet, so I cannot comment on the taste, but I thought the idea alone was worth comment.

Taking that a step further, remember they can put ANY digital image on chocolate. 

What does this chocolate treat cost?  Best I can tell, the business cards are $2.49 each, minimum 50, but there are other options available on the cheap.

Have you come up with something creative to get your foot in the door or to stand out from your competition?  I would like to hear about it.

Sales Laundry – Where did the name come from?

“Sales laundry” is a term I use to describe the personal development, the study of the art of sales and people development, planning, tactical/strategic thinking, and the real life laundry, hair cuts and shoe shines that keep me physically and mentally prepared each and every day.

This blog is a place where I share my observations and experience, hopefully giving you a chance to catch up on a little of your own sales laundry.

About Me.

Val, is founder and chief Business Development Alchemist for sales consultancy AlchemyEngine, using his sales experience amassed over 20+ years, developing, teaching and managing hundreds of sales professionals across a diverse set of industries.

Val melds entrepreneurship, 10 years of  software and CE management experience focused on customer service with 15 years of technology business development, sales and executive management with start ups, regional VARs, consulting organizations and national enterprise software companies.

Previously, as Vice President of Business Development for Boomstar, Val was responsible for building Boomstar’s sales organization and participating in the development of Boomstar’s world wide sales efforts, and establishing a global client base.

“Starting at the ripe old age of 4, I opened a lemonade stand.  I sold every glass of yellow sugary goodness I had the raw materials to make, made a tidy profit, and was hooked on the fine art of sales.  Thanks, Mom!

At 5 I was a freelance newspaper salesman, getting permission to pick up newspapers laying in the neighbors’ yards that were not going to read the paper and redistributing them with my trusty Radio Flyer wagon to those that had the time, desire and would gladly pay a little to read the newspaper.

I founded my first company and formed my first partnership in high school working late night weekends at a local radio station, establishing a successful mobile DJ company called Sound Investment.

While working on my Business Administration degree, college brought my enjoyment of entrepreneurship, business and public speaking together as part of the Students in Free Enterprise organization, ultimately winning the SIFE International Championship for having the best college student driven business development and business education program in the world.

To this day I enjoy selling.  I enjoy building companies and the sales teams within them.  I enjoy developing raw recruits into star performers and being a continuing student of the art of sales, management, and building organizations that work.”

SalesLaundry.com gives me an avenue to give back and share my sales experience and knowledge with anyone interested in the many different facets of sales.  You can reach me at Val {at} saleslaundry.com