Focus On Your Customer

Focus “to direct your attention or effort at something specific”

Gain Focus Decide what to focus on…specifically Get to a quiet place Take Dimensions with you

Gain Focus

Discuss what needs to get better – Your Avg GP/Order is $80 vs $120 for the Benchmarks Avg – Your Margin is 27% vs 31% for Benchmarks – Your Margin after Rebate is 28% vs 35%

Gain Focus Know your Markets

Gain Focus

Discuss what you are good at and what you can get better at (they might be the same) Schools: #1 by volumn Average GP/Order: down 21%

Gain Focus Drill down to Reps What’s up with Nancy?

Gain Focus Nancy’s School Customers

Strategic Planning Global IssuesStrengthOpportunityPriorityVendor PartnersRep Opportunities Sales GP GP% GP/Order Rebates Item CategoriesStrengthOpportunityPriorityVendor PartnersGlobal IssuesRep Opportunities Chemicals Equipment Paper Liners Misc Market Groups Health Care Schools Contractors Lodging Retail Food Service Operational IssuesStrengthOpportunityPriorityVendor Partners Warehouse Mgt Deliveries Customer Service Machine Repair Purchasing A/R VendorsStrengthOpportunityPriorityGlobal IssuesRep Opportunities Spartan Betco AssetsNeedROIPriority Trucks Office Equipment Warehouse Equipment Building Other Issues

Gain Focus Identify your priorities…that’s a plan Identify who can (need to) support and drive your plan Communicate

Focus on your Customer Gaining Focus took 1 day…maybe 2 Spend the rest of the year applying that focus on your Customer

Focus on your Customer

Include Customer Service 1.Invite to sales mtg 2.Vendor Rep to stay and go over key points 3.SNAP them

Stay Focused Campaign Manager – Constant reminder – Tracks the results – Helps you “fine-tune” for the next one

Stay Focused Hold your Reps accountable CRM allows your Rep to log sales calls (Activities) that are focused on a Campaign CRM allows you to monitor those Activities

Sales Rep Review

Focus needs to be Company-Wide Are your reps on board? Do you care? If yes: Are they paid to be on board? And…Are they recognized for their efforts?

Cardinal Rule for Rep Compliance Align Interests Company Interests: See Slide 12 “that’s a plan” Rep Interests: – Pay check – and size does matter – Recognition

Barriers to Rep Compliance UnAligned Interests Straight Commission – You’re not the boss of me

Cardinal Rules for comp adjustment Keep it simple Allow them to make more money – Its called win/win Show them how to make more money

Successful comp adjustment They make more money – Because they affected positive change for your company – Its called win/win

Successful comp adjustment Lets take a look…assume $30 delivery cost Rep sells $64 GP/Order Current plan pays 25% of GP = $40,000 Company net (after comm and del) = $45,000 = 9%

Successful comp adjustment New Plan = 30% commission if average $80 GP/Order Rep sells $80 GP/Order Rep makes $48,000 Company nets (after pay increase) $52,000 = 10% You just gave a 20% pay increase and added 1% to your bottom line

Successful comp adjustment But… It needs to shape behavior What if, instead of 30%, you paid 25% plus a 5% achievement bonus – And you handed your Rep an $8000 check – Consider quarterly payouts

Successful comp adjustment I like Bonus driven – Easier to reward incremental progress – Easier to Recognize achievement – Success breeds success

Pay Plans Straight Commission (+) – Prompts Urgency – Can’t lose money on a Rep Are you sure about that? – Weed out the weak Need declining subsidy for newby

Pay Plans Straight Commission (-) – Rep plateau – Not the boss of me

Pay Plans Salary plus Bonus (+) – Salary says “You are not an independent contractor” – Bonus says “We will reward you for being a team player” – Easier to drive Company Focus – Easier to reward different Reps differently

Pay Plans Salary plus Bonus (-) You rely on Bonus to promote urgency You need to decide early on if Rep is going to make it or not You can lose money on a Rep if you’re not careful It’s tricky to reduce a salary

Best of both worlds? Salary plus commission Commission rate formulated by bonus criteria Example: $40,000 base salary + 10% of GP + 1% of GP for each criteria met Each element can vary by Rep

Bonus Criteria Incentives Sales $ Growth – May discourage Margin and Order Size GP $ Growth – May discourage Order Size and possibly Margin GP% – May discourage Order Size Avg GP/Order – May discourage Prospecting – Could discourage Margin improvement

Other Bonus Considerations Item Category Market Group New Accounts Sales Class Activities Discretionary

Know your Reps Remember Nancy? You may need a Category Bonus to balance a Global Bonus

Successful comp adjustment Track with Sales Rep Review in CRM – Metrics are based on current Customer base – Metrics include commissionable items only

Sales Rep Review

Successful comp adjustment Review…often Recognize

Transition Test drive before you jump in – Before and after for each Rep – Use meaningful historical data (6mo? 3 yr?) – Test Base/Bonus mix (50-50…75-25) – Massage target and max payouts Allow for a break-in period – Show them how to make more money Avoid “Heads you win Tales you don’t lose” – If you can

Focus needs to be Company-Wide Is your Staff on board? Now, more than ever, Customer relationships need to be owned and nurtured by your Company…not just your Rep SNAP: all eyes on the Customer Consider a Sales Coordinator approach

Focus needs to be Company-Wide Are your Vendor Partners on board? Marketing Calendar Focused Sales Meetings Focused Sales Calls – report – List of Customers not buying most popular items

Vendor Partners

Stay Focused Market Catalog “We are focused on You”

Stay Focused

Market Price Plan using Customer Price Manager – Helps to switch Rep focus from price to Customer Needs

Stay Focused JM ERA Shop by Room Ongoing Rep training and reminders SUM for your larger customer Because Step1 is focused on JanSan OnLine presence