The three stages of a successful sales strategy

Food distributors planning to set up partnerships with their customers should follow three levels of sales strategy to ensure the success of the venture. These levels are product-oriented selling, buyer-relationship-oriented selling and partnership selling. Although there is no guaranteed sales strategy, distributors can achieve success by finding the right strategy mix. They should also remember that the three levels work are independent.

There are three levels of sales strategy that you as a DSR must develop when pursuing a productive partnership with your customers:

  1. Product-oriented selling.
  2. Buyer/relationship-oriented selling.
  3. Partnership selling.

These strategies must be developed in sequence and can serve as the core of a sales-development program for your organization.

There is no one right sales strategy. All strategies work to some degree, depending on which is right for your business and customer mix. However, your plan to achieve long-term success as a DSR should be geared towards the partnership level of sales excellence.

Not all customers are candidates for partnership. Eighty percent of your business comes from only 20 percent of your customers. It is that 20 percent that should be the target a partnership relationship.

However, the other 80 percent of your customers cannot be ignored because they are important for your personal income. You can sell them using a lower-level strategy, and then invest your quality time in penetrating and expanding your key accounts. Those are the accounts that pay off in long-term volume and profit.

Think of each strategy level as one of three rocket stages. You cannot reach orbit without good planning and by firing each stage in sequence until the partnership goal is attained.

Each stage builds on the preceding stage, is more complex, and requires more planning, practice, and experience to develop the skills necessary to sell at that higher level. As you understand and move through each stage, you gain the experience necessary to succeed in partnership.

STAGE 1

Product selling is the foundation from which all selling begins. Unfortunately, it is a level that too many DSRs never move beyond. Typical product-oriented salespeople usually fit the negative sales stereotype. They’re always pushing the product.

The product-oriented sales call is typically made with a brochure and a price book. The DSR does lots of talking and not much listening. This type of sales call is also often characterized by pressure selling.

Product-oriented selling is not necessarily a bad strategy, however. You just need to know when it is the right strategy. And it should never be your only strategy.

DSRs use product-selling strategies most of the time. However, this doesn’t mean that they shouldn’t continue to strive toward a higher-level strategy.

If product selling is your only strategy, your margins will always be squeezed because price is your major competitive difference. The value of your product and service remains at or near a commodity and can easily be matched by your competitor.

All DSRs need experience in product selling. It is the starting point for all new salespeople. They need to know about their company and what it has to offer. They need to know the features and benefits of their products and services. Above all, they need to know the basic of product selling to move on to relationship and partnership selling.

Each level of selling requires knowledge of the basic sales process and the ability to ask for the order. If DSRs cannot operate at this basic level, they will never progress.

STAGE II

Buyer/relationship-oriented selling is built and depends on strong personal relationships between DSRs and customers. It requires a total commitment to serving the customer.

Relationships should be developed with all people who influence the buying decision. These relationships rely on strong support from the functions within your company. Operating in this strategy may require working in the customer’s operation during a unit opening or laying out a customer’s storeroom to be more efficient.

Sometimes the relationship can become more important than the product or service. This can lead to a dangerous situation. An individual or a relationship cannot become more important than the company. The person and the company are one. Your task is to sell the customer profitably, and the relationship is part of accomplishing that task.

Relationship selling is a very important part of the beginning of a partnership. You must have the ability to develop relationships with all of your partnership customers. Foodservice selling is a personal business and often requires a personal effort.

Relationship selling is based on a high degree of service to the customer. Relationships can be a very rewarding part of being in the foodservice business. The value of long-term relationships and continuity cannot be underestimated as an ingredient for success.

STAGE III

This is the highest level of professional selling and should be your goal. Operating at this level is a requirement for success in the ’90s. Partnership selling targets the customers that offer the most growth and profit potential. Having a partnership with key customers can make the difference in your performance as well as that of your company.

Partnership selling requires a commitment of time and energy. It is not a quick sale, but a lasting and profitable sale. Partnership selling has a long sales cycle. Partnership selling also hard work.

There are several requirements for implementing a partnership strategy.

* There is one focus for customer partnerships: improving the customer’s profitability. Partnerships are dedicated to profit improvement. Don’t forget that your profit improvement is a result of your customer’s profit improvement.

* Partnerships are not a bidding process. In a partnership, you work closely with the customer developing plans and proposals.

* Partnerships add value that is recognized by the customer. The value is the result of helping customers solve their operating problems and building their business. Your basis of competition is now value, not price.

* Partnership selling starts with a blank sheet of paper, asking questions, and listening to answers to understand the customer’s needs. From that process, you develop a plan and proposal that addresses the needs of customers and improves their bottom line.

* You must have a thorough understanding of your customers’ operating processes and that includes knowing how they serve their customers.

* You must have mastered the skills in stages I and II.

* You must understand the application of your products and services within the context of your customers’ operations to help them improve their operation. You must be creative and innovative in developing applications. You must be able to think on a perceptual and conceptual basis. Think as the customer would think.

* You must have the total support of all functions in your company. Your company must be committed to the partnership process. Providing the customer with the best your company has to offer is team effort.

Every DSR should evaluate the nature of his or her sales strategy. Then study what elements you need to modify in order to move toward partnerships with your key customers.

A Trend To Sell To: Pizza

Pizza, pizza everywhere. Is there any end to how much pizza Americans can eat? It is market approaching $25 billion. To put it mildly, the pizza business is no longer confined to the local pizzeria. Pizza Hut’s mission statement says that it wants to provide the highest quality pizza for every pizza occasion. We now see pizza in many non-traditional locations such as airports, campuses, business and industry, hospitals, and delis. We even see frozen pizza and pizza kits being sold in fundraising activities. You can sell pizza products in most every segment of the foodservice industry. Here are some tips:

* Talk to your customers about the importance of the pizza business and how it is changing. Pizza offers the operator superior margins.

* Sell the whole pizza, not just pizza sauce, crusts, and toppings. You will enhance your margins because you are selling the whole concept, not just the product.

* Find the right crust for the customer’s operation. Some operators might want to prepare their pizza from scratch, but there are many alternatives such as complete mixes, frozen dough balls, par-baked crusts, and fully prepared and frozen pizzas.

* Help the operator develop promotions, such as double-cheese premiums and point-of-sale material.

* Also help operators select equipment, smallwares, and packaging.

* If you have an independent pizzeria customer, aid it in adding pasta to the menu. The independent operator is at risk as the big pizza chains get bigger and delivery becomes the major way that pizza is being consumed.

Cash and carries’ new generation

Food distributor cash and carries are beginning to expand their services. Besides the traditional customer-pick up operations, cash and carries are now offering credit and are setting up larger facilities. Major distributors such as Gordon Food Service Inc and K.B. Foods have recognized cash and carries’ potential and are moving into the market in an effort to complement distribution networks at points where delivery customers are present.

With fast-expanding warehouse clubs both acting as competition and pointing to the big market that’s out there, foodservice-distributor cash and carries are entering a new generation. In fact, the very name is becoming a misnomer. While they are still customer pick-up operations, an increasing number are offering credit.

Originally an extension of will-call departments in distributor warehouses, cash and carries were designed to service either operators who needed fill-in products or others who couldn’t meet drop-size minimums. This is fast changing. Increasingly, cash and carries are freestanding and seek to lure consumers as well as foodservice operators.

Two recent examples point up to this evolution.

Gordon Food Service, Grand Rapids, Mich., has opened an 18,000-square-foot store at its headquarters distribution center to replace what was essentially a will-call operation. Boasting greater display space for perishables, it stocks nearly 4,000 items.

Moving further away from the former warehouse image, Gordon has renamed the new cash and carry the GFS Marketplace. The name will also be used for the 23 other cash-and-carry outlets that the distributor operates. These units are “self-service retail outlets, not warehouses or sales offices,” explains Steve Plakmeyer, operations manager for the GFS Marketplaces.

Gordon operates the freestanding stores in high-traffic urban locations in three of the four states it services: 19 in Michigan, four in Indiana, and one in Ohio. There are none in Illinois. Almost all products are stocked out of Gordon’s two distribution centers.

The general strategy is “to complement our distribution network wherever we have delivery customers,” Plakmeyer notes. The stores, which allow charge as well as cash purchases, support the distributor’s local presence. They target operators too small for deliveries and offer backup services to larger customers.

Meanwhile, K.B. Foods, an Omaha, Nebr., broadline distributor with volume of $30 million, is poised to enter the cash-and-carry business with a 10,000-square-foot facility in downtown Omaha. It will be called the K.B. Foodservice Mart. Target volume is $1 million the first year, says vice president Jan Schneiderman.

“The first true foodservice cash and carry within a 150-mile radius,” according to Schneiderman, the store will be a vehicle for marketing K.B.’s broadline capability. “It will in effect be a year-round food show. When a customer comes in to pick up a fill-in item, he or she can browse through the entire store.”

K.B. will market the store through newspaper and radio ads.

Roadblocks slow progress on standardized databases

Food service providers and food products suppliers are complaining that the development of foodservice-product databases sponsored by the International Foodservice Distributors Assn. is moving at a slow pace. They attribute the unsatisfactory progress to the indifference given to the standards by many manufacturers. They also complained that most manufacturers did not understand the standard and were at a loss as to how to distribute the information once it is compiled.

Eighteen months after creation of a standard to facilitate development of foodservice-product databases, progress is still being impeded, according to distributors, marketing-group officials, and others.

“The project is moving along much too slowly from everyone’s standpoint,” Allen Ryan, president of North-Center Foodservice Corp., Augusta, Maine, and chairman of the International Foodservice Distributors Association committee that wrote the standard, complains.

Ryan and others blame several factors. One is lack of recognition by many manufacturers of the benefits computerized databases offer. Another is confusion over what the standard is and how manufacturers can get their information distributed once it has been compiled.

A persistent misconception is that the IFDA standard is itself a centralized database. It is actually just a format for organizing information that makes it easier for companies to exchange data.

Still at issue are what vehicles would best serve the industry for maintaining and distributing data, and who should bear the cost. While such distributors as Gordon Food Service, Grand Rapids, Mich., are creating their own databases, the most widely used is one marketed by Sales Partner Systems, Daytona Beach, Fla. This system now includes 12,000 products representing 180 manufacturers. SPS’ XPD product is linked to sales of its proprietary software, however, which has led to questions of access for distributors that are not SPS customers.

SPS charges manufacturers a fee to list their products and distributes the data both as part of software packages sold to distributors for use by DSRs and operators, and in a stand-alone application called ShowCase. It also sells the entire database in IFDA format.

Participating manufacturers also receive copies of their information back from SPS in two forms: ShowCase and IFDA Standard Product Data Exchange Format. Manufacturers own this information and are free to distribute it however they wish, says SPS vice president-sales and marketing Marty Weil. As an added service, SPS distributes a vendor’s data to customers on written request, database director Melissa McKee says.

Despite development of the IFDA standard, confusion has persisted over the different formats. A number of distributors have reported receiving product information in ShowCase rather than IFDA Standard. The former, being a stand-alone application, cannot be incorporated in other programs. On the other hand, SPS president Larry Frank explains, IFDA Standard is simply raw data that cannot be viewed or used without additional programming.

Some in the industry have asserted that SPS at times deliberately avoids or tries to block release of product information to noncustomers in IFDA standard. SPS denies this and points out that, since last spring, it has tried to dispel any confusion that exists over formats with mailings that clarify the difference between ShowCase and the IFDA standard and spell out the rights and means of access vendors have to their data.

Other avenues exist for putting data into IFDA standard beside SPS. Source Data Management, Chicago, a spin-off of Access International, offers an “editor” program that allows anyone to compile product data in IFDA format to populate their own database. National sales manager John Knoebel notes that a number of Access customers and other organizations use this tool. He also stresses that any manufacturer that has product data in the IFDA standard can provide them in that form for use by distributors with Access’ laptop and other sales systems.

A company can also obtain a copy of the format from IFDA and then develop its own software for compiling data. In addition, McKee says that SPS will sell its editor to anyone who wishes to assemble data themselves.

This still leaves unanswered questions concerning distribution of data, which Ryan says will be taken up at a meeting of the IFDA Standard Product Data Exchange Committee next month.

The menu of the new millennium

Everything else may be going electronic and “dot-com,” but food is one area in which virtual just doesn’t apply. The bottom line, no matter what dramatic technologically driven changes take place behind the scenes in the next millennium, is that when people sit down to a meal or grab a bite on the go, they will continue to want real, flavorful, wholesome food. No computer-generated, Jetson-esque pill will replace a perfectly grilled steak, out-sizzle a well-made paella or have as much appeal as pastrami and Swiss piled on rye.

That said, however, it’s also a given that food trends and the products that will be in demand over the next few years will continue to change dramatically. Dishes that are well-loved today could go the way of Steak Dianne, Lobster Thermidor, blackened Redfish and Chocolate Mousse. Menu trends analyst Nancy Kruse, president of The Kruse Company, Atlanta, has identified six major menu trends that DSRs should know about for selling in the years ahead:

Flavor. This is perhaps the biggest overall trend, impacting menus in every market segment. Aging baby boomers and fast-growing ethnic populations demand more flavor in their food, and that’s likely to continue. Look at mashed potatoes: Yesterday’s plain variety has given way to incrementally more flavorful garlic-mashed, to wasabi- or horseradish-mashed.

Comfort Foods. Lifestyles will only get more hectic and home cooking more of a lost art than it is today. Cravings for comfort foods–at least among baby boomers who can still reminisce about homemade macaroni and cheese, pot roast or meatloaf–will endure. Long-term, however, Gen-Xers and Gen-Yers growing up on Udon noodles and chicken quesadillas are likely to have a whole different notion of comfort food than their boomer parents do.

Sheer Indulgence. Futurists contend that the 21st Century will be the century of the consumer. Even more than today, they’ll want what they want, when they want it–no exceptions. And they’ll be willing to pay a premium for brands and branded dining experiences that minimize frustration, maximize convenience and deliver consistency and quality. A strong economy helps the indulgence factor. If it endures, restaurants will continue to reap the benefits of the “wealth effect.”

Ethnic Foods. According to projections by the U.S. Census Bureau, non-Hispanic whites will comprise 62.4 percent of the U.S. population by the year 2025, down from 72.5 percent in 1998. Watts Wacker, founder of FirstMatter, a business think tank in Westport, CT, sums it up thusly in a recent American Demographics article: “The day of the ‘Aryan from Darien’ is over.” For the food industry, that means a greater variety of ethnic foods, with increased emphasis on authenticity and on regional variations. Cuisines such as Caribbean, Latin and Thai will be as commonplace as Italian and Mexican are today.

Menu Variety. Same old, same old won’t fly in the future as it has in the past. Restaurants will be under increased pressure to keep changing their menus, to continually offer easily-bored, evermore-sophisticated patrons something new and different. Look at what’s already going on in the once-simple burger category: Leading casual-dining chains are jazzing things up with offerings such as Fried Cheese Cheeseburger, Buffalo-Style Burger, Nacho Burger, Hickory Burger, Bacon Blue Burger, Horseradish Burger and Swiss. Bacon and Water Chestnut Burger. Then, of course, there are veggie burgers, turkey burgers, chicken burgers, salmon burgers…

Dramatic Preparation. Look for even more emphasis on preparation as a marketing tool in the future. Mesquite grilling, live-fire cooking, brick-oven baking, smoking, planking and cooking to-order every which way will all pick up steam as operators strive to add more flavor, market freshness and “sell the sizzle.”

CARE FOR POWER WITH THAT?

Don’t look for Americans’ dietary schizophrenia to fade any time soon. At the same time that consumers are indulging in more prime steaks, martinis and high-fat ice creams than ever before, they want more foods that promise to help them get or stay slim and healthy. Enter value-added nutraceuticals (a.k.a. functional foods), a whole new category of cuisine that we can expect to see more of in the years to come both at retail and in foodservice.

Industry innovators such as Seattle-based Starbucks Coffee Co. already are introducing the idea to appreciative audiences. The company launched Power blended beverages in 1998, beginning with Power Frappuccino. “It’s a combination of chilled Starbucks coffee, ice, lowfat milk and a powerful mix of vitamins and protein,” says spokesperson Chris Gimbl. “It’s fortified to deliver 25 percent of the typical adult’s suggested daily intake of 12 essential vitamins.” The company also offers its Power Pack, which comes in powdered form and is added to beverages just before blending, in its Tiazzi blended juiced tea.

Smoothie operations, too, are on the nutraceutical bandwagon, offering a fast-growing menu of add-ins designed to tap a variety of health and nutrition concerns–ginseng for energy, echinacea for cold-fighting properties, calcium and protein as dietary supplements, for example. Other types of menus and broader use of functional foods as a marketing strategy are certainly in the cards. Some newer products already hitting the retail market are salmon burgers with 50 percent more omega 3 fatty acids, chewing gums and juices with calcium, cookies with antioxidants and cakes with fiber.

According to Restaurant Industry 2010, a new study by the National Restaurant Association, “Restaurants that incorporate functional foods in their recipes will be well positioned to compete for customers…Rapid advances in food technology will result in numerous culinary innovations and applications as functional foods become mainstream. Chefs will be better able to create low-fat dishes that taste as good as traditional foods. As food preparers learn to enrich the taste of reduced-fat and no-fat products, consumers will benefit from a greater variety of nutritious food choices.”

Along those lines, look for the mainstreaming of a wider variety of organic products, especially in the dairy and produce categories, as well as more soy-based or soy-enriched products. Two food industry giants–Archer Daniels Midland (ADM) and Kellogg Co.–have launched “SoyStarts” education program to encourage consumers to add soy to their diets. Kellogg has also been experimenting with a soy protein and whole wheat cereal intended as a meal replacement–not just for breakfast.

ADM said earlier this year that it was expanding capacity at some of its processing plants to handle what the company expected would be huge consumer demand for soy-based drinks and nonmeat burgers following the Food and Drug Administration’s recent endorsement of soy protein as effective in reducing cholesterol.

Look also for increasing acceptance of alternative products and preparations that, like supplements added to foods, can offer a more nutritious profile–baked goods made with prune puree as a natural fat-replacer, burgers made from poultry and vegetables, more baking vs. frying, for instance.

More menu play for specialized diets–vegetarian, in particular–is ahead as well, as is increased marketing in foodservice of dishes designed to fit into popular weight-loss diets, such as high-protein/low-carbohydrate or sugar-free. That, of course, and even more double-mega-supersized fries and shakes.