August, 2003

Chasing The Sale

Selling to the Commercial/Industrial Market

By Steve Saucerman

In the days of my great-great-granddaddy, the word "industry" was defined as "the creation of a set method for the making and mass production of tools and other artifacts." In modern times, the definition hasn't really changed all that much. Today's industry constantly is seeking newer, better and faster ways to produce and deliver product to the public in as quick, affordable and efficient a way as possible.

Selling to Industry: A Different Challenge
But what does this mean to the building material dealer? Unlike selling to the homebuilder or remodeler, selling to commercial/industrial accounts (we'll use manufacturing firms for the focus of our piece) is far more narrow and defined then selling to the contractor. Although many manufacturers produce dozens of different items, some may deliver only one product. But that one product may still be enough to provide you an opportunity to increase sales and create new repeat customers where once there were none. And the amazing thing (at least, so I found) is that selling to industry was easier than selling to contractors'in fact, much easier. Yes, there are still estimates to be written and timetables to adhere to but, unlike dealing the contractor, there are generally no more than a handful of your products that will be of interest to the manufacturer. The difference is that these products may now be purchased in very large (and sometimes larger than life) quantities.

Let's look at a simple, yet often quite successful, example: wooden pallets. You're a lumber dealer. Factories of all sizes often ship their product on wooden pallets. These pallets are made from a variety of species but very often are low-grade hardwoods. (It's easy to see where I'm going with this.) The important aspect is that when the manufacturer does finally buy, he will purchase a lot of this wood... often in full bunks and sometimes even truckloads (I've been there). He'll do this because his time is precious and, if the company has the need and warehouse space, he'll want material that's going to last awhile and assure him that there will be no interruption in production schedules by not having enough pallets to make the ship.

As for you, the building material dealer, instead of laboring over and (hopefully) entering for order a home-addition estimate with it's 80-odd line items, you simply fill in one, plug in a (large) quantity and voila: the same $8,000 that the home addition would have rendered your company is now in hand through a single line item. Now you can go on to focus on your next prospect.

Ok, So Maybe There's a Little More to It...
Of course it's not that simple. You're not going to merely waltz into a manufacturing concern and have people clawing and clamoring for your product. You'll need to sell your product and your company, and to do this you'll need to do some homework. The first task is to research who would make good candidates for your particular line of wares. And I have good news on the research front. You happen to be living in the age of the Internet, and most manufacturers nowadays have a website that trumpets their business and product. By checking out the sites manufacturers in your area, you can often compile a short list of prospects who potentially would be in the market for your line. Let's call this a screening process. It's an important step because in today's harried and competitive world, it's become essential (and profitable) not to waste time with those who were never going to buy in the first place, and to focus only on those who have true potential.

Bigger Fish
But we don't all just sell pallet lumber. Let's step this up a notch. Once you've found the potential candidate's website, does it happen to say anything about company growth? Or possibly an upcoming expansion in the planning stages which would include a new addition to the facility? And what if you happen to know a general contractor or two with whom you've worked in the past who'd be just right for the project? (You're way ahead of me on this... and that's good.) And do you think if you were to deliver these leads to the (eventual) winning contractor that just maybe he might return the favor by working with you exclusively on the project?

This is not a pie-in-the-sky scenario. I've been on both ends of this drama in real life (I've been in building material sales and commercial construction for almost 28 years) and can attest that this scene has played out more than once over my career. As a contractor, I received many good leads from suppliers and then felt an intense obligation to keep that supplier as part of the team once I acquired the job. And as a building material salesperson, I've delivered leads to contractors who later worked with me exclusively. It does work, and it's an excellent way of shutting out the competition before they even know what hit 'em.

Now, the only twist to this scenario is that some manufacturers have their own in-house construction reps who would "general" the facility addition themselves. In this case you would then bypass the contractor (although you may still want to alert some subcontractors).

While we're on the subject of facility additions, here's another trick that an old building material salesman taught me a long time ago. It's so simple, it's remarkable. Here it is: Drive around your town and through your industrial parks. Check out the employee parking lots and see whose are overflowing and whose aren't. (Stay with me on this one.) The odds are on your side that the company with the overflowing lot is ripe for expansion. It may sound too simple to be true, but I've actually used this strategy and had it pan out.

Ok, I've Found My Prospect and I'm Through the Front Door... Now What?
The answer varies. Obviously, if the company is big enough, there's likely to be full-blown purchasing department; then all you have to do is follow the signs down the hall. The problem, of course, with such a large concern is that it now becomes far easier to get lost in the shuffle, buried among what is often fierce competition, or completely rebuffed by the curmudgeonly veteran secretary sporting an eternal frown and completely lacking humor. I grew to avoid these firms for these reasons and also because these companies were often so large they could buy direct from wholesalers or even other manufacturers, bypassing me. I always seemed to have better luck with the medium-to-smaller concerns where it became possible to focus on only one person, who was making the majority of buying decisions for that company.

These "buyers" go under a number of different titles. Often they go by "purchasing manager" or "plant superintendent," but they may be dubbed with something more obscure and seemingly unrelated to purchasing such as "director of engineering" (and one of my best clients of all time had this very title). So you'll need to ask around until you find the right person. Yes, this person may still be required to go in front of his boss for approval to buy your product. He may even need to go in front of his company's committee. The point is, there's nothing better than having only one person (and not a board or faceless purchasing department) as your key contact. You simply have a better chance to establish that close, all-important seller-client relationship that's so often the keystone to repeat sales.

The Meeting: Some Tips
As with anything, personal or professional, first impressions are paramount, so it boils down to one word: Prepare. Almost any purchasing manager will see you once, and this may be your only chance ever to make an impression. So you want it to be good. You want to be at your best and find a way to set yourself apart from the crowd. Here are a few tips for doing just that:

• Know the customer. Don't let them tell you what they manufacture. You tell them by learning about the company before the initial meeting. There are a number of ways to do this. We've already discussed the Internet, and it remains one of the best ways around to quickly and easily acquire information about a company and that company's product lines. Should the company not have a website, or should the information on its website be sparse, you can go the conventional route of stopping in the lobby before approaching the client and picking up brochures on the company, its product and its history. If all else fails, there's word of mouth. Ask around. Eventually you'll find the information you need. The point is, buyers like to talk to a salesperson who knows what their company is all about. Not only is it flattering that you took the time to care, but it also puts in motion the process that will eventually forge the relationship-building trust we spoke of earlier. The mere fact that you understand the moving force behind the company more readily puts at ease any worries they may have over "training" you to understand the firm's wants and needs.

• Know your competition. And yes, you do have some. Come up with ways to make an impression (often through knowledge of the manufacturer) that will help you separate yourself from the pack. Of course, if you have a brochure or other such propaganda, bring it along to give to the prospective client. Even if he don't read it (many don't), it makes you look a bit more professional. Then, give 'em the pitch: What services do you offer that your competitors don't? What are your competitors' weaknesses? Although I don't advocate trashing your competitors (the purchaser doesn't want to hear it and it may backfire), it's nice to know what these vulnerable points are... just in case it comes up.

• Be completely honest and forthcoming. Most of these guys have done this for a long time and they understand availability, special ordering and even back-orders, when you get to that point. They know that glitches arise because they deal with the same thing every day. There simply is no reason to promise something you can't deliver. Remember, you're trying to build a relationship that will last for many years to come... and there's no way that relationship is going to happen without mutual trust.

• Here's a good one: Visit trade shows. Many manufacturers belong to larger manufacturing organizations whose members produce similar products (such as textiles, computers). These groups often present trade shows around the country. Tune into these shows (again, check the Internet) and if possible, attend them. The idea is to acquire a better understanding of your client's industry as a whole. By talking to some of the show's participants, you'll gain a deeper understanding of the concerns, worries and current focus of the industry as a whole. This knowledge will not only help you better understand your client's mindset and therefore needs, but it will also give you the "one more thing" to talk about when you meet. Oh... and did I mention you may pick up one or two new leads at these shows?

• Leverage the web. If your company has its own website, make sure your prospect knows it. Besides the obvious emailing and other standard features, does your site allow him to order online? Can he track his order online once it's in progress? Can you offer links to his website through yours? These are all marvelous features readily available with many web software packages or through website developers. And, let's face it, you're not always going to be available to answer these questions every time they arise; again, this may be the service you can offer that your competitor doesn't.

Closing: Cold-call or Left Out in the Cold?
Once you have the order (and be patient; many manufacturers move slowly and methodically. It's not unusual for a response to your bid to take weeks... even months), the standard selling/service principles apply. Deliver your quotes on time, make sure they're complete and accurate, offer alternates and value-engineering, and emphasize to your clients your service after the sale. Make sure they know you'll be there if they need you. If you have (or are) an outside salesperson, add the firm to your list of rounds. Though most of the manufacturers I dealt with didn't require the personal attention that a contractor demands, it's still a good idea to poke your head in consistently every two weeks or so, whether you get orders or not. It simply shows you're responsible and adds one more trust-building block. And once the trust is there and the partnership is created, that big sale is not far down the line.

One last thing. As I travel and speak around the country, I'm often asked what's better, the cold call (where you walk in unannounced) or to pre-introduce yourself through a brochure or telephone call. I'm often hesitant to answer because it really can vary from manufacturer to manufacturer, but in general, I'm staunchly in favor of the cold call. It's just simply too easy for the prospective client to cut you off at the knees over the phone or to toss your brochure in the trash. I also found over the years that most purchasing managers will invite you in that first time--whether it be out of politeness, need or just plain curiosity. Whatever the reason, the whole idea is to get in there. After that, it's all up to you, your genuine belief in your product and service and your skills as a salesperson. Good luck!