Growing Your Sales Through Training And Education
Comprehensive training for sales representatives and service technicians helped this VAR meet its goal of 30% annual growth.
Conventional wisdom holds that spending too much time working in your business won't leave time to work on your business. Data Collection Products Company (Lombard, IL), an automatic identification and data collection (AIDC) VAR, struggled with this dilemma. With 20 employees, Data Collection Products Company has grown 30% annually for three consecutive years, leaving little time for long-term planning. But when gross annual sales topped $5 million, Data Collection Products' principals knew the company couldn't operate as it did in its early years.
Says Joe Castronovo, company president, "Initially, we tried to sign every customer, even if they weren't a good fit for us. We knew we had to move beyond this approach and focus our sales and marketing.
"And as our sales grew, service and support became much bigger priorities. Our thinking then focused on how we could improve our customer service."
Data Collection Products Company has since revamped its approach to sales and service. In the following pages, Castronovo and Dave Reba, vice president of sales and marketing, discuss the company's more formalized approach to these areas.
Are You Paying Enough Attention To The Bottom Line?
When Data Collection Products topped $5 million in gross sales, Castronovo and Reba evaluated several key business areas:
- Was the company properly marketing its entire product line?
- Was the company generating quality leads for those products?
- Were the sales reps trained to sell those products?
- Was the company selling to the "right" verticals?
- What type of customer profile did the company typically sell to?
"Initially, our sales efforts were focused on the leads provided by our vendors," Reba explains. "We knew that, ideally, lead generation had to be done here internally. And we had to look more closely at why we were losing sales."
Focusing Your Sales And Marketing Efforts
Data Collection Products Company made several key decisions related to both its sales and service efforts, including:
- Narrowing the sales and marketing focus - The company found that most of its clients had less than 800 employees and gross annual sales under $100 million. "Previously, we didn't pay attention to a prospect's number of employees and annual revenues," Reba says. "As a result, we occasionally lost sales to very large prospects who didn't like our small size. Now, the sales reps focus on prospects who fit a specific profile in terms of number of employees and annual revenues. We're trying to be smarter by focusing on the opportunities we're most likely to realize. And our advertising dollars are now spent on customers and prospects that meet our customer profile."
- Holding regular sales meetings - Data Collection Products' principals and sales reps now meet bi-monthly to review the previous two weeks' sales activities, and to better focus on the best sales opportunities. "We've always met with the sales reps," Reba says. "The difference is that management now brings more detailed information to the reps. And the information - related to our customers' profiles - helps the reps close more prospects."
Developing "sales consultants" - The company's sales reps undergo two levels of training, Reba says. In the first, the company's in-house engineering department trains reps on technical specifications.
In level two, the sales reps are trained by the company's vendors. Reba frequently asks vendors to travel to the VAR's site to provide ongoing product education. "Our reps get more personalized, one-on-one training when a vendor comes to our site," he says. "Reps are more likely to ask questions. Contrast that with VARs who go to vendor training at a trade show. A training session at a show might draw 50 resellers, so it's difficult for people to receive individual attention."
Educating the sales reps has paid off, Reba adds. For one, the company's sales reps more frequently recommend products based on customers' specific application needs. Reps also are better able to identify additional sales opportunities. "For example, a client may want AIDC hardware for inventory control. The sales reps now would look to sell the manufacturer hardware and software for other applications such as shop floor data collection."
- Handling customer support internally - When a customer used to call with a hardware problem, Data Collection Products called the appropriate vendor for the answer. The VAR would then call the customer back. Resolving hardware problems often took several days - and led to frustrated customers.
Consequently, Data Collection Products established an in-house service department. The company has its technicians certified by vendors for the repair of products and for software support. "Customers deserve fast customer support. And having certified techs helps us win more sales," Reba says.
- Selling media - Data Collection Products now sells bar-code media, labels and thermal transfer ribbons. "Customers' frequent media requirements offer us more frequent contact with them," Reba says. "Therefore, we have more opportunities to sell them hardware and software."
- Moving away from customized software - Two years ago, Data Collection Products customized software more than 80% of the time. The other 20% of the time, the company offered minor modifications to its off-the-shelf software. Now, 80% of the time, the VAR offers minor modifications to its standard solutions. Reba explains, "Customized systems are more expensive because customization requires more time. Developing a custom package for one customer could take several months, while minor modifications can be completed in a few weeks. We're able to work with more customers."
The Importance Of Managed Growth
Data Collection Products revamped its sales and service in order to maintain a 30% annual growth rate. However, Castronovo doesn't want the company to grow too quickly. He concludes, "We could probably grow up to 60% a year. But our real concern is to grow at a rate that will not sacrifice the service and support that we give to customers. And we don't want to take on a lot of debt to grow."