What is the next big area of the wholesale growing business
that, when improved, will increase profit?
You meet all of the discounted early-order deadlines. All of
your available space, and then some, is full of product as often as possible.
You have already made significant strides into improving production
efficiencies. You may have even taken in all the "big automation
gains." You've "done it all," and now the laws of diminishing
returns are stifling every additional move you can think of.
What about sales? Have you considered that maybe the solution
to your shrinking profits is not to save more money but to make more money?
Sounds too simple to be true, but it is -- and not by adding more sales people
or using gimmicks. An "investment" in your sales approach could yield
more profit dollars than wringing out the few pennies left in production
For example, how many times in the past three years have
your vendors asked for price reductions? Five percent one year, an additional
five the next. And you absorbed the reduction because you felt unsure about
your relationship. Consider the following chart. The far left column represents
a possible range of your current gross margin. Each successive column shows how
much more product you would have to grow and sell just to retain the same
number of profit dollars. It's an uphill battle for profit in the face of price
If your gross margin is in the 30 percent range and you are
asked to lower your price by 10 percent to capture an order or retain the
business, did you realize how much additional product you have to produce and
sell at that price to have the same profit? You would have to sell an
additional 35 percent of product at that price just to make the same profit
that you made at the original price.
So what do you do?
* Find some way of improving efficiencies by five, 10 or 15
* Produce more to keep from losing ground in year-end profit
* Increase your chances of controlling this front-end
situation through sales process improvements?
The choice should be very clear.
Forget the stereotypes of salespeople and of greenhouse
"farmers." All successful companies have professional people whose
sole function it is to work closely with the customers, to provide solutions,
to nurture the relationship, to anticipate problems and, yes, to capture new
opportunities. These people are salespeople, and they are just as important to
a small- to mid-sized greenhouse as they are to a Coke or a Boston Scientific.
This series of articles was developed to provide insight
into the power of relationships, providing solutions, effectively presenting
the value of your entire program and the sales that result. But before you can
achieve any of these, you have to develop your sales approach, and that is what
each of these articles will help you do.
Each article in the series will focus on a single aspect of
the sales process, seven in all. Real-life sales examples, provided by growers,
will be provided to illustrate how others have successfully implemented aspects
of this process to solve problems and secure agreements. Á
Increasing your effectiveness in selling procedures can have
surprising effects in the profitability of your business: Overall sales
increases and growth of your business, increased sales of higher-profit
products, new customers and getting paid for the value-added services you
probably already provide.
As mentioned, there will be eight articles in the series,
including this introductory piece. Perhaps you simply need to add one of the
steps to an existing method; perhaps you need a whole new system; perhaps you
just need to be reminded about the sales principles you already know.
Regardless, these seven steps can help. We have conducted numerous seminars
about these seven steps and know the difference they can make in organizations.
Below is an outline of what will be presented over the
course of the series. If you have any questions, feedback or commentary, feel
free to call or write. We love questions.
Step 1: Planning to
succeed by achieving a commitment. Ever get caught unprepared? What do you say
when the client asks: "What do you have that's new and interesting?"
or "How will your products help me be more successful at the retail
level?" or "You will need to match this price." This first step
helps you prepare for these dreaded, inevitable scenarios by giving you
examples on how to best answer these key customer questions and demands without
Step 2: Relationship
development. Can you gather profitable orders on the phone from someone you
hardly know? How do you get to know customers better without having to visit
each one? Who should you visit? The easiest, most consistent sales are made
because of relationships; the key to this step is knowing how, when and with
Step 3: The art of
asking good questions. If you don't know what is important to your customer,
will he buy from a competitor who works hard at understanding his concerns? You
bet. While questions are part of building the relationship in step two, this
step goes beyond the building stage into understanding your position. Questions
help you retain preferred provider status as your clients' needs change.
Step 4: Identifying
the need. You have become successful as a grower by being better than your competitors
at certain things. How do you match these business strengths with the needs of
your retail customers? How do you even know what the needs of your retail
customers are? If you are not providing what they need, you will not make the
Step 5: Presenting
your company and products. How good are you at communicating your excitement
for the products and strengths of your program? If you don't help the customer
understand how your pansies are better for him, that your company listens and
responds and that you are committed to their success, it's just a matter of
Step 6: Achieving
the commitment. Do you sometimes walk away from a client without a clear
understanding of what the buyer agreed to? How often are you told to phone back
while the client "thinks it over"? Step six highlights the importance
of firm, on-the-spot commitments and outlines some strategies for getting them.
Step 7: Review and
planning the next step. Do you leave the client with just a handshake and a
thank you or do you confirm a next step? Defining the process ensures that
everyone is on the same proverbial page and erects barriers against your
competitors. Do you always leave your customer understanding the value of what
will be covered in the next meeting?
Part one in an 8-part series about sales strategies that improve profit.