Authors: Bob Smith, Associate Professor and Extension Specialist, Forest Products Marketing, Virginia Tech; Eric Hansen, Assistant Professor and Extension Specialist, Forest Products Marketing, Oregon State University; and David Olah, Graduate Research Assistant, Virginia Tech
Publication Number: 420-146, posted June 2000
Modern Forest Products Sales
Salespersons' Responsibilities
Successful Sales Strategies
The Sales Presentation
Appendix
PERSONAL SELLING
Selling is the personal interaction between two or more people with the intention of exchanging something of value.
"The American Salesman"
The structure of forest products companies has changed dramatically in recent years. The 1990s have seen escalating importance attached to customer satisfaction, quality, market niches, value-added products, and strategic alliances.
These changes aren't characteristic of only large companies. Entrepreneurs and small companies are going through the same thing. Yet, most companies have not made the internal adjustments necessary to address and more effectively embrace these important shifts in philosophy.
Change, however, must occur for companies to be well positioned to access 21st century markets. Companies must offer products that maximize customer value, and will have to become more sophisticated in providing that value. This demands changes in production activities, sales strategies, and the flow of information within the company and between the company and its customer and business partners.
The evolution of the sales force from order taking and price quoting to promoting mutually profitable value exchanges will continue. Regardless of the company's size or the nature of its products, salespeople will become facilitators rather than merely product movers. Your function will be to link customers with the internal operations of your firm. This structural shift has many implications:
To understand your role as a salesperson it is necessary to first evaluate what you were hired to do. Your primary objective is to create a satisfied customer. This may be accomplished by providing quality products, quick delivery, or responding to customer's needs faster than the competition.
However, many salespeople believe their job is to only "sell" forest products. They are evaluated only on monthly sales dollars or volume shipped. The successful salespersons of the future will create working partnerships with their customers, and sales dollars and volume shipped will represent only a part of this established relationship.
Salespeople have multiple responsibilities. Their job is not only to increase revenue, but to attract new customers, retain current customers, identify what the competition is doing, conduct market analysis, coordinate sales activities, and work with manufacturing facilities to meet customers' needs.
A look into each of these responsibilities may assist you in identifying areas in which you can improve your performance. A well-balanced portfolio of job duties will not only enhance the effectiveness of the salesperson, but increase company bottom line.
Unfortunately, most salespeople are measured on this criteria alone. Gross sales and/or gross profit are quite easy to identify. Revenue can be expanded by increasing sales volume, increasing the price of the product, reducing the cost of the product, or any combination of these.
Others, besides the salesperson, have great impact on the revenue of the company. Normally, pricing and costing decisions are not the sole responsibility of the salesperson. Yet, these decisions will have a drastic effect on sales revenue. You must understand how changes in any of these areas may affect the market. A price increase during a down market could be a major error by management and unless the salesperson states his or her opinion it could have a drastic effect on sales revenue.
It has been estimated that a business loses 20% of its customers annually. This may be a result of competitors' activities, changing material requirements, changes in purchasing policies, relocation, business failures, retirements, mergers, death or litigation. Somehow, the lost volume must be recaptured to merely stay even. There are many ways to locate new customers.
Continual change in the forest products industry forces salespeople to find new customers. As products and markets change, this may be their primary function. One systematic approach to obtain new sales leads is as follows:
The following are proven sources of new leads:
The key to securing referred prospects is timing. Perhaps, after closing a sale you can ask about other customers. Ask for a limited number of referrals at a time. Be sure it's OK to use a referral, and always state the source of the referral.
Regional and national trade associations also provide membership directories. Often these lists are available through the web on the association's home page. A list of several of these trade associations is located in the attached appendix.
The message should reflect the total marketing program and other forms of promotion your company is conducting. Many forest products firms in the past decade have promoted quality as one of their major product benefits. This quality theme should be promoted not only in their advertising, but in their public relations campaigns, at trade shows, and by their sales force.
Most firms follow the 80 / 20 rule. Eighty percent of sales come from twenty percent of the customers. Retention of these current customers should be one of the primary objectives of the salesperson. As with all other aspects of your sales job, it's important to have a plan (customer maintenance plan) and systematically make it happen.
Two keys are treating customers right and keeping the right level of contact. Treating customers right is made up of many things that should be instinctive to any salesperson. Being fair, paying special attention to their needs, building long-term relationships, and always doing what you say you'll do are examples. Remember who you work for . . . your customer!
The better you know your customers, the better you'll understand what level of contact they require. One customer may need to see you in person on a weekly basis, while others may prefer a telephone call once a month.
Several methods to retain existing customers include:
No one person in the firm should be closer to the competition than the salesperson. He should relate what is happening in the market to managers on a regular basis. Are there new products or services being offered? What is happening to the price? What type of quality is the competition supplying? Why is the customer buying from them and not us? These are all questions that can be answered by the salesperson while in contact with the customer.
Competition forces us to do our job better. For example, would the U.S. auto industry still be making large gas guzzling cars if it had not been for Japanese competition? To understand the competition, answer these questions:
This is tied quite closely to understanding the customer and the competition. What forces are changing the way you do business? How will the "green" movement change the way forest products companies operate? What will international competition do to the price of softwood/hardwood lumber? What economic forces affect your markets? How will the North American Free Trade Agreement affect your sales? What will rising interest rates do to the housing repair and remodeling market? These are all factors that the salesperson may need to be aware of to better serve his customer and company.
Remember that the market environment is dynamic, not static. Data received today may be outdated tomorrow. You may need to keep abreast of all these factors to serve your customers better.
You're responsible for making sure everything goes well after a sale is made. Is the paperwork correct, the price quoted properly, the delivery time listed and the type of delivery stated, are the proper products and grades listed, and are the names of contact persons on the order?
The customer sees you as the primary contact person in the company. If anything goes wrong, you're the one expected to straighten it out. If everything is understood before the product is delivered, it saves a lot of work. If anything goes wrong, you must take responsibility and correct it as soon as possible.
Although most salespeople occasionally work with their production facilities, normally the functions are quite separate. However, you can identify new products, determine quality factors that are important to customers, and help locations to reduce excess inventory items.
A close working relationship also assists the operations personnel to understand the customer better. Marketing is no longer just selling products, but producing what the customer wants. Delivery time is no longer three weeks, but three days. The manufacturing location must be an equal player in the marketing concept of an organization. The truth of the matter is, without sales, manufacturing locations are unnecessary.
(Production minus Sales = Scrap)
Just as you would not build a house without a blueprint, or take a vacation without an itinerary, the salesperson should never make a sales call without a plan. Or, to quote a book with a similar title, "If You Don't Have a Plan, Stay in the Car."
No facet of selling has changed more in the past two decades than the necessity to be well organized. The electronic communication revolution allows customers to receive competitive information in seconds. But this revolution is not a substitute for a well-planned sales presentation. The salesperson must present information in a well organized and timely fashion. The following strategies are suggested for a successful sales presentation.
What do they use your product for? How much do they use? Who does the purchasing? These are all areas that can be discovered before you ever step into your potential customer's office. The more information you have, the less time will be spent gathering it on site, and more time will be available to spend promoting your product.
Once you have met a prospect, keep a file on them. Record important dates, what they purchase, the secretary's name, etc. This will allow you to easily carry on a conversation with them the next time.
Send cards and hand written notes thanking them for purchasing from you. Give them items with your name or company name on them so they will always have something to remind them of you. Contact the customer regularly. Phone them between visits.
The day of the "cold call" is over. The average industrial personal sales call costs over $200. No longer can the company afford outside sales personnel prospecting for new clients. This can easily be done on the telephone by you when you are in your office, or by an inside salesperson. This does not mean that if you drive past a potential customer you can't stop and see how he might use your product. However, unannounced visits should not be used in place of scheduled appointments. Appointments demonstrate that you value the client's time and indicate respect for the individual.
There is no greater time saver in the world than efficient use of the telephone. The telephone can keep you in contact with customers when you cannot see them in person. You can prospect for new customers. While on the road, you can reschedule appointments or squeeze in new customers. This is especially true now with the widespread use of cellular phones. The telephone helps you manage your use of time much better.
When your customer calls, make sure that your secretary or receptionist handles the call politely and courteously. The receptionist is often the first person a customer comes into contact with. Efficient and professional phone manners can make a lasting impression on a customer.
The Internet is one of the newest tools available to the salesperson. The number of people and businesses using the net has increased dramatically in the last few years. Many companies, trade associations, and industry publications related to the forest products industries have home pages where information can be accessed. Often, company sites can provide much of the background information you need to successfully approach companies about the products and services you can offer them.
This is a quick and easy source of a vast amount of information. Listed in the attached appendix are some wood products related sites that can help provide further industry information.
Why are you seeing this particular customer? Do you plan on selling him/her something today? Is it just a fact-finding trip? The salesperson should always have a reason for seeing a customer. Successful sales are 90% preparation and 10% presentation. Know what you want to accomplish before you enter the office. A planning worksheet for each customer is very helpful.
Who is going to purchase the product? Who uses it in the plant or store? Spend your time with the people who can best make the decision to use your products. There is no sense in spending a lot of time with persons who cannot make a purchase decision.
Don't be overly protective of your knowledge. Use networking whenever possible and share the knowledge you have. Remember that one useful piece of information shared with 10 people could result in 10 useful pieces of information returning to you.
Create a single compelling idea that differentiates your company or products from the competition. How can you save the customer money? Does your product save the customer time? Can your product make the customer more effective in his or her work? Is your quality better? Can you meet delivery schedules better than the competition? Can your company package the product better to help the customer? Offer a solution. Have an idea of how to assist the customer before ever seeing him. Plan your work and work your plan.
Know your product better than anyone else. Be able to answer any questions that may arise. Be kind and friendly to everyone you meet at the customer's office. Some salespeople always take a box of donuts to certain customers when they visit, a $5 investment that has generated thousands of dollars in good will over the years. Get to know the secretaries and receptionists by name. Understand that customers change their minds on product needs, delivery or specifications. Be flexible enough to meet these needs.
Remember that you are there to solve the customer's problems. Ask probing questions and see what your company and product can do for the customer. You will never write a sales order while you are talking. Listen to everything customers say about the use of your product. See what other products they are buying and from whom. Identify their needs. Studies of the very best salespeople show that it's their listening skills, not their persuasive talking skills, that distinguish them from average performers. Ineffective listening is one of the most frequent causes of misunderstandings, mistakes, jobs that need to be redone, and lost sales and customers. When you leave, write everything down. Nothing will assist a salesperson more than good clear records.
The customer is doing you a favor by purchasing your product. The two strongest words in sales are "THANK YOU." Everyone likes to be thanked and appreciated. Never leave a customer without thanking them for their time and use of your product.
Being enthusiastic about your job and product is one of the easiest ways to increase your chances for success. This type of attitude and mindset helps to show customers, or potential customers, that you are excited and looking forward to the opportunity of helping their business with your product.
Also, don't take rejection personally. You are selling a product. There will be many companies you call on that do not need your product. Their decision not to buy your product is not a direct reflection of you personally. Take a step back and examine what reasons the company might have had for not buying from you. Once you have done this, get right back on track and start thinking about your next sales call. The benefits of persistence should not be underestimated.
With a little patience and a lot of practice, sales presentations can become one of your most productive selling tools. Success depends on your capacity to listen, the depth of your knowledge of your company and its products, and your ability to ask the right questions.
The sales presentation is a tool that few salespeople truly master. It has a heavy component of public speaking - an activity that strikes fear in the hearts of many. Nevertheless, whether you sell kitchen cabinets or construction lumber, are presenting to an individual or a group, there are sales presentation tactics that can work for you.
There are so many sales presentation models, gimmicks, and guidelines that we can't begin to discuss them all here. What they have in common is important - each emphasizes the necessity of having a definite strategy for delivering a sales presentation.
The initial steps in your sales presentation should occur well before meeting with your potential customer. Time spent on advance preparation, including a detailed plan of action, is time well spent.
You may not (in fact, probably will not) end up following every point during the actual presentation, but the effort you put into the plan won't be wasted. The process will leave you far better prepared and enable you to respond to your potential customer more effectively.
Start by gathering as much information as is feasible about the customer. Check industry directories (such as Miller Freeman's Directory of the Forest Products Industry or Random Length's Big Book), associations, or even the local Chamber of Commerce. Your current customers may be good sources of information, and don't overlook the wealth of information that may be obtained by talking to a contact's receptionist or secretary.
From this information, you should be able to anticipate whether your contacts are likely to be interested in your product. If they don't have problems that you can solve, you should reassess the situation.
The preparation done to this point will form the basis for your presentation plan. At a minimum, your written plan should include an outline and the primary questions you intend to ask. Some important components of the presentation plan are the following:
Too many situation questions can irritate a prospect - so answer as many of these questions as you can during the homework stage. We recommend that you also spend time anticipating how your contact may respond to your sales presentation questions and preparing to follow up.
When you are thoroughly prepared, it is time to meet the customer. First impressions are important. Make sure you are on time and look good. No matter what your approach to selling is remember these key points:
One commonly used and proven technique for sales presentations is the funnel approach. Although it may not be the exact fit for your style, the overall principles are universal to sales and applicable to any sales presentation. The method can be divided into three areas: The information gathering stage; the benefits and features stage; and the closing stage. Start with a broad approach and focus on the needs of the buyer.
A. Information gathering stage:
B. Benefits and features stage:
C. Closing the sale stage:
The ability to present ideas to a group is one of the most important assets you can possess. It affords greater visibility for the organization, products, and yourself. Buying decisions for major purchases are often made by a committee so an effective presentation will enhance your chances of making a sale. Anthony Salinger believes there are eleven ways to connect with your audience to be an effective presenter. With a little creativity, you can incorporate these concepts into your sales presentation technique.
No matter how well you are prepared, how polished your presentation, or how wonderful your product, you are certain to encounter objections from some of your contacts. Properly handled, objections can be turned in your favor.
Your first goal should be to prevent objections. One way to do this is to avoid providing solutions too early in the presentation. If you present a solution before you have fully developed the problem and the prospect's needs, it's natural for him or her to object. It's like telling the punch line in the middle of the joke. If you do, the prospect won't get it!
If objections do come up, here are some suggestions on how to handle them. Remember, there is no such thing as a rejection. There are only objections. Find out why the prospect does not want to buy today. Start by asking the following questions, but tailor them to your specific application:
Listen carefully to the answer. Good listening skills are critical at this stage of the sales presentation. Avoid preparing your response until you have heard all of the customer's concerns.
Make short notes while the customer is talking. Get clarification or specifics on the answers. Paraphrase the customer's concerns and repeat them back to ensure you are interpreting them correctly. If the contact says your product is too expensive, find out what too expensive ($) is. Make sure the prospect is telling you the real objection. Again, ask probing questions. "Is there anything else that concerns you?"
Always use verbal cushions: Don't counter with an objection. Show your concern, then state why they may not realize all the benefits. "I appreciate your concerns, but others have found . . ." End your response with a question. "Does that make sense? or You do want reliable service for this product, don't you?"
Always avoid arguing. Calmly restate the information in a slightly different way and make sure your voice doesn't sound defensive. Keep your answers short and to the point. Change the objections into selling points.
Unfortunately, you will not always make a sale. Don't take this personally! "No" is not a personal rejection, but a business refusal. It means that the prospect may not have enough information to buy, doesn't need the product at this time, or can't afford it. It does not mean you are not a good person.
If you have a prepared response to the following standard sales objections, you will be more likely to close the sale.
Even the best salesperson cannot overcome all objections. It is important to listen carefully, probe for the underlying objections, get clarification, and verbally cushion your response.
If that fails, then leave on a positive note. Thank them for their time and ask if you could see them in the future when things may change. Then follow up with a letter discussing your visit and any new items that you may be able to share with them.
Losing a sale can be very discouraging, but it is critical to step back and evaluate what happened. Ask yourself the following questions; the answers will leave you better prepared for your next attempt.
No matter what your approach, a well thought out plan is critical to a successful sales presentation. Confidence in yourself and your product help, and a well thought out plan builds confidence. Knowing your audience is critically important and will allow you to steer the buyer through the closing stage and avoid unnecessary objections. If you do your homework, thoughtfully prepare, and practice your sales presentations, it will increase your success.
As we enter the 21st century the role of the salesperson has changed. Their duties no longer include simply taking orders and quoting prices. This is especially true for the forest products industry, where a "marketing" philosophy has never been dominant.
The forest products salesperson of this millennium needs to understand that they are facilitators. That is, they facilitate the mutually beneficial exchange of products or services between two parties. This exchange process is a complicated one that focuses on creating satisfied customers at a profit. In facilitating this process it is important that you understand what your responsibilities are. These include:
These tasks are most easily accomplished by: knowing your product, understanding the market environment and competition, understanding your customers, having good communication skills, and, most importantly, being a problem solver.
Directories
Regional Business Directory and Industry Specific Directory(ies) Dun and Bradstreet Information Services 3 Sylvan Way Parsippany, NJ 07054-3896 Phone: 201 605-6700
Directories of Manufacturers (by state) Commerce Register, Inc. 190 Goldwin Avenue Midland Park, NJ 07432 Phone: 201 445-3000
Directory of the Forest Products Industry Miller-Freeman Publications 500 Howard Street San Francisco, CA 94105 Phone: 415 905-2200
Green Book - Hardwood Lumber Market Directory Miller Publishing Co. 1235 Sycamore View P.O. Box 34908 Memphis, TN 38184-0908
Random Lengths Big Book P.O. Box 867 Eugene, OR 97440-0867 Phone: 541 686-9925 Fax: 800 874-7979 Web site: www.randomlengths.com
Virginia Wood Products State Directories Contact Virginia Dept. of Forestry at: P.O. Box 3758 Charlottesville, VA 22903 Phone: 804-977-6555 Web site: www.state.va.us
Trade Journals
Wood & Wood Products P.O. Box A-3844 Chicago, IL 60690-9952 Fax: 312 922-3165 Web site: www.iswonline.com
Pallet Enterprise Industrial Reporting, Inc. 1893-D1 Billingsgate Circle Richmond, VA 23233-4239 Phone: 804 740-1567 Fax: 804 740-2826 Web site: www.palletenterprise.com
Cabinet Maker and Furniture Design and Manufacture Chartwell Communications, Inc. 380 E. Northwest Highway, Suite 300 Des Plaines, IL 60016-2208 Phone: 847 390-6700 Fax: 847 390-7100 Web site: www.cabinetmag.com
Southern Lumberman Hatton-Brown Publishers, Inc. 225 Hanrick St. Montgomery, AL 36104 Phone: 800 669-5613 Fax: 334 834-4525 Web site: www.southernlumberman.com e-mail: subscribe@hattonbrown.com
Trade Associations
National Hardwood Lumber Assoc. P.O. Box 34518 Memphis, TN 38184-0518 Phone: 800 933-0318 Web site: www.natlhardwood.org email: info@natlhardwood.org
Hardwood Manufacturers Assoc. Suite 205, Building B 2831 Airways Boulevard Memphis, TN 38132 Phone: 901 346-2222 Fax: 901 346-2233 Web site: www.hardwood.org
Appalachian Hardwood Manufacturers, Inc. P.O. Box 427 High Point, NC 47261 Phone: 919 885-8315 Fax: 919 886-8865 Web site: www.woodcom.com/ woodcom/ahmi/index.html
Virginia Forest Products Assoc. P.O. Box 160 Sandston, VA 23150-0160 Phone: 804 737-5625 Fax: 804 737-9437 e-mail: vfpa@worldnet.att.net
Southern Forest Products Assoc. P.O. Box 641700 Kenner, LA 70064-1700 Phone: 504 443-4464 Fax: 504 443-6612 Web site: www.sfpa.org also www.southernpine.com
Southeastern Lumber Manufacturers Association 671 Forest Parkway Forest Park, GA 30297 Phone: (404) 361-1445 Fax: (404) 361-5963 Web site: www.slma.org
Websites
Steve Schook's Directory of Forest Products, Wood Science, and Marketing Web site: www.forestdirectory.com
Lumber Quest Web site: www.lumberquest.holowww.com
Lumber Trader Web site: www.Lumber-Trader.com
Center for Forest Products Marketing and Management Website: www.vtwood.forprod.vt.edu/cfpmm/index.htm
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