Three Strategies to Jump-start Sales Growth
In the competitive landscape of the industrial distribution industry, achieving profitable revenue growth is no easy task. However, it is essential for distributors to thrive and stay ahead in today’s market. To accomplish consistent organic growth, the best distributors focus on three key levers that can drive success:
- Drive Focus on New Logo Acquisition
Salespeople have served as the keepers and nurturers of long-term customer relationships. Their mandate was to protect existing revenue and expand the account to the extent possible. While this approach had its merits, sellers often had little time to focus on acquiring new accounts.
To prioritize new logo acquisition effectively, distributors can implement two strategies:
- Deploy Hunters: Introducing dedicated hunters whose sole focus is on landing new accounts can be a game-changer. These specialists are responsible for identifying and breaking into new accounts while account managers continue to nurture existing ones. Defining clear role responsibilities and rules of engagement is crucial to ensuring a seamless customer experience and maximizing the effectiveness of the dual-pronged coverage approach.
- Offload Sales Support Activities: By identifying and offloading non-selling activities from the core sales role, organizations can free up valuable time for sellers to concentrate on pursuing new business opportunities. Understanding how salespeople allocate their time between high-value account development and other activities helps identify tasks that can be delegated to other resources without compromising existing account expansion and retention.
Regardless of the chosen approach, aligning performance management tools, such as sales compensation plans, with the desired seller behavior is vital to driving success in new logo acquisition.
- Leverage Data and Insights to Target and Prioritize Accounts
Traditionally, distributor salespeople spent a disproportionate amount of time with a handful of accounts representing the lion’s share of their business book. This often led to neglecting significant growth opportunities in other accounts within their territory.
To rectify this, distributors should focus on data-driven insights for prioritizing accounts. Organizations can estimate account potential and effectively segment accounts by analyzing data inputs like cross-selling opportunities and firmographics. Armed with this information, sellers can focus their efforts on high-potential accounts, while coaching and management cadence reviews can help drive progress on account plans for target accounts.
- Incentivize New and Long-Tenured Talent with Growth Goals
Maintaining long-term customer relationships has been a cornerstone of success for many distribution companies, resulting in a tenured sales organization. However, as the industry faces an aging workforce, attracting and retaining new talent becomes critical.
Leading organizations recognize the importance of nurturing new talent and preparing them to take over key customer relationships as tenured sellers retire. To do this effectively, new sellers must be assigned territories with sufficient current business and growth potential. This may require reevaluating large territories and minimizing the concentration of key accounts while balancing the concerns of long-tenured sellers. Designing a compensation plan that rewards growth over total volume can align incentives with strategic goals and promote a harmonious blend of new and experienced talent.
Next Steps
Consistent profitable growth must focus on three levers: driving new logo acquisition, leveraging data and insights for account prioritization, and incentivizing new and long-tenured talent. By adopting a more balanced approach across all revenue streams and exploring growth opportunities in new accounts and value-added offerings, distributors can position themselves for success in an ever-evolving market. Embracing these levers will not only boost profitability but also secure a competitive advantage in the industry.
Jim Peduto is the Managing Partner and co-founder of Knowledgeworx, LLC. Jim combines practical insight and big data to help CEOs and owners transform their businesses.