Automotive aftermarket warehouse distributors (WDs) face increasing competitive pressure from both OEMs and from online retailers. For WDs to stay successful, they not only have to strive to have the right parts at the right time, but also make sure that their sales team is prepared to make a good case for their services when they are in front of customers.
“If you don’t have it on the shelf, the customer just goes to the next seller,” says outside sales manager Traci Taylor of Vaca Valley Auto Parts. “If the price is right, they’ll take it where they can get it, rather than waiting the next day to have it shipped.”
The key is to arm your sales team with the right data, and back that up with the right training.
Sales reps often find themselves calling on accounts without any particular reason to do so, and they aren’t able to ask the right questions to uncover a specific need that they can meet for the client. If all the sales team is doing is checking stock, dropping off a card, and asking general questions of the customer, they are likely missing opportunities to land new business, or introduce new products or lines.
Salespeople have to be able to find out what the pain points are for each account, and be prepared to offer a solution, and then position a product or service to fit that need. Otherwise, the conversation never moves past the customer trying to get a better price.
If sales reps aren’t closing, you have to to do the hard work to find out if they need more training because they don’t know how to close, or if they need more information so that they have the tools available to close the deal.
Price competition has made this challenging, particularly for untrained sales reps. “The untrained sales guys listen to the noise about price,” says David Caracci, retired vice president of sales at Bosch. Caracci is also an adjunct professor at Northwood and executive director of the Automotive Sales Council. “The customer is always going to ask for a lower price. The sales person needs to understand the customer’s business and what their real need is. Their real need isn’t a lower price, it’s just the easiest thing to ask for.”
“It’s never all about the price,” adds Donna Wagner, assistant professor and chair of the Aftermarket Management program at Northwood University. “It comes down to SKU availability, forecasting and quality, and being able to deliver those parts. And how much profit the repair shop can make by buying parts from a specific distributor.”
There are a number of strategies and tools available that can help WD sales teams stay competitive.
Know your account
Observation is critical for successful sales. Know the account, what vehicles they are servicing, and what parts they are buying from you and from other sources. You can gain that knowledge by talking to the customer, walking through their bays and checking boxtops, and analyzing data about similar shops in the same geography.
“Find out what problems the company is having,” Caracci says. “Look at their incentive program. If the buyer’s incentive program is based on gross profit dollars, you don’t’ pitch fast delivery. If it’s based on reducing inventory, you figure out how to help him reduce his inventory. Know what to focus on and leave all the other noise out of the process.”
That’s one advantage that WDs still have over lower cost online competitors. “What a distributor can provide to the customer with regard to availability, service, and understanding the market can’t be replaced with what you find online,” Wagner says.
Invest in training
It’s much easier to organize frequent sales training than ever before thanks to online technology. You can develop and post training videos, attend online seminars and conferences, arrange video conference calls, and complete advanced online courses such as those offered via Northwood’s University of the Aftermarket.
Sales managers should follow up on training by going into the field and observing what the sales reps are doing, and making sure they are actually implementing what they’ve learned. Managers should also verify they are making use of the data available to them through sales, inventory and forecasting tools.
Unfortunately, Caracci says that many companies have been rolling back their training efforts to keep their budgets under control. “When you turn competition into a price war, you cut back those budgets,” Caracci says. “These sales departments aren’t doing a lot of training, which is why we keep hearing about price, price, price.”
Internet-based training resources have made it easier and more cost-effective to train. The training venue only determines the cost; quality of training is the important thing to focus on. Caracci says that the more interactive the training is, the better off you’ll be. Sales reps should be able to interact and bounce ideas off of each other during the process. “If you can get them to interact, the online stuff really works and it’s the most cost effective methods,” Caracci says.
Data is critical
“You have to have current data,” says Kelly Gregory, product manager at Epicor Software. “If you’ve got paper reports once a week, the information is obsolete and you’ve already lost the sale. You have to be on top of that data and make it engaging for the customer.”
Distributors and suppliers have been developing new analysis, category management, and forecasting tools that give sales teams highly granular data about specific customers, customer types, and geographies that can help anticipate future orders and also guide the sales process by providing more insight into customer needs. The Automotive Distribution Network’s Network Intelligence tool, the Auto Parts Alliance Inventory Optimization Tool, and Delphi’s Intelligent SKU Management solution are good examples.
“Data can give you a valuable reason to make a call,” Gregory says. “Shop owners are busy, but they are always willing to sit down and talk if you have something valuable to share with them. This is an opportunity to present something that adds value.”
According to Wagner, WDs are now focusing more on category management and forecasting because of the success they’ve seen at the retail level. “It’s critical, and it’s not just distributors, but sales rep agencies and program groups are doing this for their members. Its’ a way of life at this point,” Wagner says.
Enterprise resource planning and customer relationship management products targeted at the aftermarket (like those from Epicor, Magstar, etc.) can provide valuable sales data that can be used to plan and measure the success of promotions, identify potential new customers, and find ways to improve sales to specific customers or groups of customers.
Epicor introduced the Service Insights mobile app last year to help sales reps access this data in the field. It works in conjunction with the company’s Industry Analytics Services for the aftermarket. It includes monitoring, cumulative sales, rise/fall, margins, revenue per invoice, and returns for each account. It can be integrated with the company’s business management software and data warehouse to provide sales and historical comparisons by day, month and year.
“We made the analytics easy to read, easy to use, and easy to share with the customer,” Gregory says. “Bringing that data into the conversation is an eye opener for the customer and for the sales team. It stimulates conversations with customers.”
Vaca Valley Auto Parts in Fairfield, Calif., is a member of the Federated Auto Parts group and has a sales team of four, including outside sales manager Taylor. The company services mostly smaller, family owned repair shops with four to 10 bays.
Despite being a smaller distributor, the company has been a long-time proponent of technology and uses the Service Insights app to help check customer records, follow up on returns, and receive alerts when sales drop off.
“It opens up conversations, and they know that I have all of the information we need right at my fingertips,” Taylor says. “If they aren’t buying parts from us, we can ask why. It allows them to give me information about what the problem is, whether that’s our inventory or our pricing, or which parts we’re stocking form the manufacturers.”
The company can run reports daily on how each line is doing. If there is a drop in sales, Taylor can talk to the counterpeople to find out why.
By having information available on returns and warranties, the sales reps can also get beyond the price conversation. “You can talk about quality, and show each customer what they’ve purchased and what comes back,” Taylor says. “We can upsell that product and show them why we stock that line. It doesn’t always come down to just price.”
“Having the data on hand allows us to have honest conversations with our customers about why they aren’t buying certain products from us,” Taylor adds. “That has definitely helped increased sales for us.”
Subscribe to Aftermarket Business World and receive articles like this every month….absolutely free. Click here.