To the New World
People tout the value of a positive attitude during economic struggles, be it this recession or any other. A sunny disposition has value, to be sure, but there is certainly more to financial success than a smile and glass-half-full mind-set.
Take, for example, Christopher Columbus’ voyage to the New World. Undoubtedly, he benefited from a “This might be hard, but we’ll make history and get rich” attitude and not a defeatist “I don’t know, the ocean is pretty big and dangerous, and maybe the world isn’t round after all” mentality. But, optimism aside, what actually got Columbus to the Americas was likely his ability to secure funding, stock and crew a ship, and plan a long voyage.
The situation facing most businesses right now isn’t much different. Everyone is afloat, so to speak, embarking on a dangerous and complex journey that at times seems impossible, because between recession and fiscal stability is a huge chasm of uncharted water. To reach the salvation of the New World, you would be wise to channel your inner Columbus and not only have the good grace to view the journey as an opportunity, but also to plan the trip to the absolute best of your ability.
BEST OF THE BEST
The reason Columbus Day, and not “Joe Walks Across the Street Day,” is celebrated is because Columbus and his crew stepped up and did something amazing, and Joe, well, he just walked across the street. In fact, Columbus likely got the job in the first place because he was able to convince Queen Isabella he was the best for the job. Distributors should keep this lesson in mind, and be prepared to convince customers that though many may be able to steer a boat through rough waters, they are the only ones who can help their clients arrive safely at their respective destinations.
Being “the best” at anything, whether it’s sailing or selling, is often a slightly nebulous descriptor, but Catherine Pilgrim, senior vice president of sales for Corvest, Largo, Fla., gave some interesting insights as to what it might mean for distributors. “It’s very important right now for distributors to continually find ways to differentiate themselves,” she said. “The distributors that go over and above to really take all effort away from their customers, and continually provide them with new ideas, new products … [and] really being intimately involved with knowing who their customer is, of course they build a lot of loyalty, but they also are able to secure a lot of annual business,” Pilgrim explained.
Bob Conway, CEO of Corvest, added, “This is a service business, probably more than a product business. Cost and price [are] important, but service and performance are probably the most important elements.” If you can offer reliable service and a solid product, you’re going to stand out beyond those who are merely offering the lowest price, because no one can afford to have an order fall apart in this economy, no matter how low the price.
Under a Microscope
Just as there is more to sailing than wind, water and a boat, guiding your company through the turbulent economy takes more than top-notch customer service. A business needs to be streamlined and efficient—there can be no dead weight or loose rigging if it’s expected to make it across the ocean.
To address such technical concerns, Gary Rago, CPA, MBA, director of the New Jersey Small Business Development Center at Rutgers University in Camden, N.J., stressed companies need to examine their inner workings to pinpoint weaknesses. “Analyze your company’s products and/or services to address inefficiencies and under-performing areas,” he said, advocating that businesses calculate their sales by each product or service, as opposed to a raw sales total. Rago’s example: If you’re making 80 percent of your sales on just 20 percent of your offerings, then you should re-adjust said offerings accordingly to focus on the more profitable portion.
Once you know what’s making money, you should also check how much money a product or service is actually making per sale. Said Rago, “It’s not always obvious, especially if you do a high volume. Your sales may be high, but you’re not recognizing a high margin on those products, and that’s not a good thing.” Similarly to focusing on high sellers, Rago also recommended targeting products with the highest profit margins. “It’s a matter of taking a close look at what you’re doing [and] shifting resources,” he said.
In the spirit of streamlining operations, Jeff Bowles, co-president of distributorship Proforma Promotionally Yours, Kansas City, Kan., suggested companies take a close look at their supplier relationships and see what can be simplified. “If this is a tough economy, and everybody’s searching for an edge, so are all of our suppliers,” Bowles said. “I’ll have more leverage with the vendors that I use if I send more work to a smaller amount
of vendors,” he explained. Not only does having fewer suppliers to deal with make order management easier, suppliers that get more work will also be more willing to help on large, complex or rushed orders.
Full speed ahead
The biggest part of being able to sail across an enormous ocean is, of course, the actual sailing. Similarly, a distributor should remember the best way to survive a recession is to not neglect salesmanship. Though cutting expenses has been the go-to survival strategy for many companies, Rago cautioned against it, saying it could lead to a slippery slope of diminishing growth that will continue “until there’s really not a viable business left.” He added, “You always have to work on the ‘money-in’ side of the equation.”
To keep sales up, Rago emphasized the importance of marketing efforts, and strongly warned against scaling back such endeavors, since it affects a business’s income levels. He also encouraged keeping track of ROI on marketing and eliminating campaigns that either have poor yields or are untraceable.
Rago’s advice on marketing is wise for any company, but it holds additional weight for those in the promotional products industry. As marketing tools, promotional products are known to have a low cost-per-impression, making them a good way for companies outside the industry to keep up their marketing efforts without heavy spending, which means potentially more selling opportunities for distributors during the recession.
“The best approach to take is to educate your customers on the cost-per-
impression of promotional products,” said Mark Holland, vice president of marketing for Corvest. The key lesson? Simply put, promotional items are more cost-
effective than the other, more traditional avenues such as radio, television and print. “Distributors should be able to educate their customers on that, and if so, they can pry some budget dollars away from other advertising vehicles,” he concluded. $$