DEALER RECRUITMENT PROCESS - ppmg.ca and Prioritize.pdf · DEALER RECRUITMENT PROCESS. ......
Transcript of DEALER RECRUITMENT PROCESS - ppmg.ca and Prioritize.pdf · DEALER RECRUITMENT PROCESS. ......
72 DEALER RECRUITMENT GUIDE
SELF ANALYSIS
MARKET ANALYSIS
RECONNAISSANCE /RESEARCH
INITIAL MEETING /IDENTIFY NEEDS
EVALUATE ANDPRIORITIZE
SOLUTION PRESENTATION
INTRODUCE THE TEAM
FOLLOW UP
SOMMarket Segments
Territory
Historic Trends
Industry Groups
Facts
No
Distributor InputDealer Input
TeamYou
FactoryDealership
SheetsBinderInformal
TRADITIONAL PLACES
INNOVATIVE PLACES
CUSTOMER NEEDS
NEGOTIATION
CALL
CALL
LETTER
COLD CALL
CRITERIA TEAM
HOW?
WHO?
WHERE?
EDUCATION
ORIENTATION
GATHER INFORMATION(Survey Form)
Brand
Forecast Trends
GPS Online
Personal Interview
YesDistributorship
DEALER ACQUISITION TEAM
STRENGTHS & WEAKNESSES
TARGET
DEALER RECRUITMENT PROCESS
DEALER RECRUITMENT GUIDE 73
Evaluate and Prioritize Your Prospects
After you have met with a prospective dealer, your next step is to determine whether he is a good “fit” based on your recruitment goals. As you know, it is rare that one meeting will be enough to “close” a dealer. So, you also must factor in how much time it is likely to take to convert the dealer versus the potential sales volume to be generated. Meet with your dealer acquisition team to compare the prospect against your criteria for new dealers. Discuss with your sales manager what priority should be given to converting this dealer as you map out your account calls and plan use of your time.
In addition to more specific criteria developed as part of your company dealer acquisition plan, compare what you know about the dealer to this list of suggested “at minimum” criteria:
o Must be HVAC licensed.
o Must have a place of business (no backyard/garage operators).
o Must have a secretary that answers the telephone (no answering machines).
o Good credit risk.
o Aggressive merchandiser (advertising/promotion) or a willingness to accept and imple-ment merchandising plans and programs.
o Adequate manpower (sales, sales management, service) or a willingness to invest in it.
o Eagerness to expand and grow and the potential to do it.
o Good business reputation.
o Willingness to promote all our product lines.
o Proper potential for providing service after the sale.
o Adequate working capital or ability to have acceptable credit arrangements.
o Willingness to adapt, learn and grow.
o Technical ability (or potential) to handle commercial sales, installations and service.
o Adequate location.
o Clean, well-kept place of business.
o Youth.
o Succession.
o Dealer “fits” our goals/strengths so that we can profit from the relationship.
o ______________________________________________________________________________
o ______________________________________________________________________________
o ______________________________________________________________________________
Following you will find information to help you prioritize your prospective dealers, as well as a checklist for follow-up activities as you continue to “court” dealer candidates.
74 DEALER RECRUITMENT GUIDE
Segmenting Your Dealer Prospects
Although the terminology is not always used, you’re already fluent in segmentation. When you talk about RNC, AOR or commercial markets, you are talking about segments. Segmentation helps us group particu-lar customers or prospects based on similarities they share. This enables us to more efficiently use time and money in communicating with or marketing to these more precisely defined groups – instead of taking a “shotgun approach” and lumping all HVAC contractors together. This same technique can help you sort your dealer prospects so that you and your company get a better return on the invested time and money.
There are many ways you could segment your prospect list:
• Type of business (add-on, replacement, primarily service, new construction)
• Commercial vs. residential
• Profitability, size, geographically, etc.
• Potential or actual sales dollars, gross margin dollars or adjusted margin dollars
• Amount of time required
• Growth potential
• Willingness to participate in distributor/brand programs and group advertising
• Ethnic makeup of dealer or the market they serve
There is no wrong answer, but we’ll look at two techniques here: 1) growth potential; and 2) investment/profitability.
Segmenting by Growth Potential
There are several ways to define and measure growth:
• Improved profit
• Increased sales
• Sophistication of the business organization
• Better productivity, reduced unapplied time
• Expanding into new business, parts, service
How you define growth may even vary from one dealer to the next; but, no matter how you define it, you can use this technique. Classify dealers by looking at their ability and willingness to grow and divide them accordingly:
• Those that want to grow, and are able to grow
• Those that want to grow, but are unable to grow
• Those that do not want to grow, but would be able to grow
• Those that do not want to grow, and could not grow
Growth Potential Matrix
Can Grow Will Be Could Be
Can Not Grow Wanna Be Don’t Wanna
Desire No Desire
Willingness
Ability
DEALER RECRUITMENT GUIDE 75
Generally, in terms of potential contribution toward your sales goals, these segments can be prioritized:
1. Will Be 3. Could Be
2. Wanna Be 4. Don’t Wanna
The “Will Be” dealers have the most potential, so it’s easy to understand why these would be “priority” prospects for you. Even so, market conditions or other factors may mean that you can’t simply “cherry pick” these dealers. It is possible to benefit long-term by building relationships with and helping the “Wanna Be” and “Could Be” dealers, too. To do so, consider these possible approaches:
• Reallocate your time. Be sure you are spending the majority of your time calling on dealers with the most potential.
• Ask questions to find out why the “Could” isn’t interested in growth. If the reason is tied to his personal values or life goals, you’re not likely to change his mind. Concentrate your time on other prospects. If he has lost his desire from a sense of defeat on business or market issues, a workable solution from you may get him back on track.
• Evaluate the “Don’t Wanna.” He presents a “double whammy,” in overcoming challenges on two fronts if he is to represent significant sales potential. Serve his needs without pushing growth. Determine whether the market potential exists to recruit a different dealer to capitalize more fully on growth in that trading area.
• You don’t have to help all dealers who want to grow by yourself. Enlist other resources. For example, put the “Wanna Be” dealer in touch with a business consultant or your distributor business manager. Or – depending on what his specific barriers to growth are –you may want to recommend distributor or manufacturer training programs.
Segmenting by Investment/Profitability
As a TM, what do you invest in each of your customers? Your time. How much time you invest in each dealer could vary for any number of reasons. If you do some soul-searching about how you decide which dealers to spend the most time with, you may come up with one or several reasons:
• Dealers with the highest purchases
• Dealers with the most potential
• Dealers who generate high gross margin dollar
• Dealers you like
• Dealers who generate high gross margin percentage
• Dealers with profitable, well run companies
• Dealers that are leaders in their community
76 DEALER RECRUITMENT GUIDE
Segmenting Your Dealer Prospects (cont.)
The investment/profitability matrix looks at three of these variables: TM time investment, TM income dollars and sales volume dollars.
First, this graph looks at the profit percentage versus the time you invest. In the case of new dealer acquisition, use estimated figures for sales and margins.
The more time you spend, the higher the gross margin or adjusted margin needs to be to make it worthwhile. Those above and to the left of the diagonal line are contributing positively to your time spent, where those below and to the right of the diagonal line are not contributing in proportion to the time spent.
This will allow you to form a better picture of whose potential contributions to your sales goals is less than productive. For every dollar of time spent with the dealer, your goal should be to get a dollar back.
The size of the circles represents the size of the account in potential sales volume. Estimate a prospect’s size based on how your company defines “small,” “medium” and “large” accounts by sales. Dealers with high sales may sap much of your time and yet not generate real profit. Consider whether a prospect is likely to be a “high maintenance” customer requiring your service disproportionately to the profit potential he represents.
As you identify a prospect’s loyalty – how many brands he sells by percentage – as well as his general attitude about loyalty to a primary supplier, reflect this in your chart, too. Dealers who cherry pick will only buy from you when you have the best price, reducing your income. You spend a lot of time quoting in relation to the jobs you get, so less loyal dealers eat up more of your time.
Of course, sometimes there is a payoff. A dealer is unlikely to put all of his eggs in your basket early on. You have to earn loyalty. So, you and your recruitment team will need to consider whether a low income/high time investment prospect has strong conversion and loyalty potential or not.
Using these segmentation techniques can help you identify which prospects are worth spending time with. Plus, it can help you determine appropriate plans of action. As a result of this analysis, you may:
• Prioritize the time spent with dealer prospects.
• Consider what concessions or how many “value-adds” to offer to potentially big but unprofitable customers.
• Recognize that some prospects just don’t have the right potential to pursue further and find other prospective dealers to recruit in that area. Adopt a “Harvest Strategy” that represents the greatest likelihood of maximizing new dealer sales with minimal time investment on your part.
Investment / Profitability Matrix
Time Invested with Customer
Profit
DEALER RECRUITMENT GUIDE 77
You may want to refine your account development strategy further by looking at the growth potential matrix and the investment matrix together by color-coding the circles.
For example:
Will Be = Green Wanna Be = Blue Could Be = Yellow Don’t Wanna = Red
In this manner, you can better see how much of your time to spend on dealers who also have higher growth potential – a way to compare your potential short-term versus long-term gains by investing in that dealer relationship.
78 DEALER RECRUITMENT GUIDE
Section Title
Growth Planning System - 74 -
Segmentation Worksheet How would you rank the prospect on his ability to grow (0 = no ability to 6 = unlimited ability)? ______
How would you rank the dealer on his desire to grow (0 = no desire to 6 = strong desire)? ______
Plot Desire and Ability on the graph below.
Ability
6
5
4
3
2
1
0 1 2 3 4 5 6 Desire
How much time would you invest with this dealer?
% of a Month = # of Hours / Total Hours in Month (160) = _______
Estimated % of GM = _______
Would you classify this dealer as:
○ Small ○Medium ○Large GM%
35
30
25
20
15
10
5
0 10 20 30 40 50 60 70 80 90 100 % of Month
Segmentation Worksheet
DEALER RECRUITMENT GUIDE 79
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Follow-Up Tickler File
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