Depot Cries Foul

Filed Under (The Competition) by Don on 31-08-2007

This has got to be the biggest laugh of the week.  The big bad bully Office Depot is crying foul because they lost a government contract!  How outrageous!  The Federal Times has reported that Office Depot was snubbed by the GSA last week when the agency awarded a blanket purchase order for office supplies to 13 office supply companies, 11 of which are classified as small businesses.

Isn’t it childish of Office Depot to complain like a bunch of babies especially after they recently won contract awards from the FAA, IRS, and Homeland Security.  They filed a complaint with the GAO against the 11 small businesses but not against the other two contract winners, Staples and Corporate Express.  What a bunch of sore losers.  Better yet let’s just call them LOSERS!  Ha! Maybe they’ll get their due from the State of Georgia when all is said and done too.

Have a great Labor Day Holiday!

Depot & Staples continue to low ball prices and kill margins

Filed Under (The Competition) by Don on 30-08-2007

The news regarding the Office Depot contract violations with the State of Georgia continues to spread.  Hopefully this means that people are finally starting to see for themselves how the big boxes play the game.  Their bait-and-switch tactics have been known by the independents for a long time now but everyone just thought us poor slobs were just sore losers. 

I see that in some markets the folks at Staples Business Advantage are getting very aggressive with their prospecting efforts.  I’ve received several notes from other dealers that the Staples group is selling copier paper for $21.99 a carton, paperclips for $0.01 and legal pads for as low as $1.99 a dozen.  Eventually they will have to move these product margins up but they are comfortable that if they can convince the buyers with this razzle-dazzle play that their prices are always this cheap they will keep the business.  Sadly we have to sacrifice these core products to get in the door and even worse we are forced to play this stupid game in order to keep our business.  The end-user/choosers don’t win with these tactics either.  That’s because the other “C” & “D” items they purchase are marked up substantially to cover the losses on these products.  Whereas if the buyers could recognize this for what it is and negotiate a contract that meets their needs everyone can be happy.

Rumors persist that there will be another paper price increase in October.  Bah! Humbug!  Paper price increases are starting to sound like gasoline prices.  Labor Day weekend is almost upon us so if you are traveling be safe and enjoy this last vacation blast before fall begins.

Observations for the week of 8/20/07

Filed Under (Uncategorized) by Don on 24-08-2007

The last few weeks have been full of stories about the big box stores reporting lower than expected sales and earnings.  Everyone has reported lower earning and/or revised earnings.  Office Max, as I predicted, posted a nominal gain due to their further and continued cost cutting measures.  Sadly for the Max employees that has meant a loss of their job.  The ‘less-than-intelligent’ powers at Boise/Office Max just haven’t been able to get it together after the merger.  If they were that smart they would not have laid-off or otherwise fired the best and brightest producers they had on staff. 

Staples continues to understand what it takes to be successful in today’s market.  In my opinion Staples will continue to be the most successful of the big boxes.  Their marketing savvy and leadership seem to have a clear direction and distinct goals.  More importantly, these goals and ideals come from top management down the line.  This is a critical component to the success of any business.  Clearly thought out and planned objectives that come from top management and make their way down strategically to all those employees so that everyone has a clear understanding of what the corporate goals are and how they will make them happen.

One product of those goals with Staples is their CRM application.  They have understood the importance of selective marketing.  That is the marketing of goods and services directly to the buyers of those specific products.  If I’m buying a lot of binders then I obviously have an interest in binders and indexes, etc., therefore it makes sense to market products in that category to me.  We see this done very successfully with companies such as Amazon.  The CRM software is a powerful and important piece of that marketing puzzle.  We independent dealers just don’t quite get that yet. 

The importance of the CRM product; its use and integration into our back office systems is the next hurdle we need to overcome as independent dealers to gain those sales dollars we are missing out on.  However, our back office software and service providers do a lousy job of making this integration possible.  Goldmine is a wonderful product and the folks at Longbow Consulting can do an outstanding job of installation and training and they know our industry extremely well.  The real issue is the back office software integration.  Some packages make this process easy and some make it impossible.  That is so infuriating when we fight and beg for every dollar of business we get as it is and when we can utilize such a great tool we find it is just out of reach.  The SAP product that United Stationers has been pushing will meet many of those needs but only to those with deep enough pockets to afford this very dynamic solution.

I have been working with the people and SageCRM and while they have an incredible product I have my personal doubts. Why?  The SageCRM product is so powerful and can do so much you practically have to be a computer programmer to understand the capabilities, usage and setup of the product.  It is a hosted CRM solution which makes it great for the outside sales staff but the program is so complicated that after nearly a year of using it I still can’t make it perform to my standards.  I don’t blame the Sage staff; they have been wonderful to work with.  Their service and responsiveness have been outstanding.  If you can spend the dollars to make it work for your business it is worth every penny.  I would dare say you would get your ROI in less than three years on that investment.  I guess the blame is two-fold.  One is the fact that I am not a programmer so I can’t and don’t understand how to make the changes necessary to make the programs work.  The other is the money required to have their engineers customize the product to our needs isn’t available to me from a budget standpoint.  There is one last issue and that is our sales staff is too complacent to utilize the program to its fullest extent without a directive from top management and I don’t see that happening, sadly.  I have seen demonstrations of the Sage CRM product that just blow me away and the monthly cost isn’t out of reach.  It simply is a product that is so good and so advanced that I can’t make it work without significant funding and training.  I am sure that we as a business and I personally are missing a lot of sales and profit dollars because we don’t use this tool to its fullest.

I love marketing and I love this industry.  I have survived through the good and the bad and I’m still here to talk about it.  Are you an industry veteran?  Where do you think our next opportunity lies?  Are you proactive in your marketing efforts or do you just leave that up to your sales staff?  Marketing wisely may be the smartest thing you have done or will do.

Car Salesmen Still Don’t Get It

Filed Under (Uncategorized) by Don on 15-08-2007

Buying a new or used car or truck from a dealership ranks up there with a root canal or suffering with a kidney stone.  But it doesn’t, and shouldn’t, be that emotionally depressing.  Times have changed and how we treat our customers and their experiences have changed but automobile dealerships have not followed that change.  My wife teases me sometimes by saying that I should be a car salesman because I know more about the cars on the lot than most of the salespeople do.  I would actually enjoy selling high end cars simply because I am a car buff and I love learning about new cars and I enjoy the “art” of the sale and find it pleasurable to help others with their needs.  I put the word “art” in quotes because I want you to understand that sales isn’t an art at all.  Sales is a processProcesses and procedures produce predictable and repeatable results.  It is critical for you to understand this difference.  Dealerships need to step into the 21st century and bring their sales staff up to speed and quit trying to shove a vehicle down the throats of everyone that ventures upon their lot before they do their homework regarding the unique needs of the prospective buyer.  As soon as you get out of your car at the dealership the vultures come at you from every direction.  If you walk out of the service bay while your oil is being changed they jump on you.  Good grief, the payments on new cars and SUV’s today is more than my first house payment was!  I would love an opportunity to educate these guys on creating a really unique buying experience for potential customers and show them that there is a better way to earn your business without making me want to leave the lot faster than a speeding bullet.  I’m sure there are a few car salespeople who really know their stuff but the majority simply don’t have a clue.  In fact there is one dealer that I admire most because of my buying experiences with his dealership and that is Scott McCorkle in Charlotte.  With that exception here are a few suggestions for the poor guys on the lot to chew on:

  1. Ask Questions.  When you meet the prospective buyer, introduce yourself and start asking questions.  An attitude of servitude is best served by those who take pleasure in serving others and by wanting to meet their needs. Ask about their needs, their budget, etc.
  2. Ask open ended questions.  Don’t ask questions that give you nothing more than a ‘yes’ or ‘no’ reply. Be engaging.
  3. Make it easy for the customer to decide.  Help them identify the vehicle that meets their requirements.  They can choose colors and options after they decide on their best solution first.
  4. Look for unidentified needs.  You’ve picked the color and interior, so how about other options? Do they want satellite radio or running boards or another option that isn’t on their vehicle choice?
  5. Gratitude.  This is more than just a thank you.  It is follow-up after the sale.  It is the service reminder for their first oil change.  It is a birthday card on their purchase anniversary and other follow-ups.  These take time and scheduling but they will leave an impression that will bring you business for many years and many referrals yet to come.

Sales is about finding, winning and keeping a customer for life, even in the automobile business.  So, what is your favorite color?

Sales Management Tips

Filed Under (OP Sales Training) by Don on 14-08-2007

If I were to ask you to give me a two-word definition for “Sales”, what would that be?  Don’t stress your gray matter to hard now.  Okay, you have probably thought of everything but the right choice, but the answer is… ‘Ask Questions’.  Your job as a sales person is to be the master inquisitor.  You probe deeply to find out how and if your products and services can be of value to your potential customer.  What about sales managers, how would they begin at effective management skills?  Here are six key points for effective sales management.  They provide a good basis to get you going, the real work is up to you.

  1. COACH: Think like a coach. Train and practice.
  2. INTERVIEW: Have people ready for a territory, not a territory ready for people.
  3. TRAVEL: Travel with your salespeople (observe) all the time. Do not TALK, sit there and take notes. Go over pro’s and con’s later in the day.
  4. ONE-ON-ONE’S: Meet your salespeople once a week (same time) to review previous and upcoming week. Utilize your reporting forms such as call reports, customer care, pipelines, quotes and bids, etc.
  5. PROFILE SHEET: Each salesperson should be observed and notes recorded regarding their work attitude, skill level and daily performance.
  6. MWBA: Do this at YOUR place of business every day! Manage By Wondering Around!  Always use positive motivation, NEVER fear motivation. 

Gotta Love Those Disclaimers

Filed Under (The Competition) by Don on 07-08-2007

I recently put together a long list of reasons that seperate our particular dealership from the “Big Box” office suppliers.  Many of these same points will probably apply to you if you are an independent office supplier.  I researched the “fine print” from their catalogs and put together a table of comparisons that let the consumers see some specific differences that should help clarify the advantages of doing business with the independent stationer.  You can view this table at http://www.ossone.com/top10.html .  I would urge you to do something similiar and print it for your salespeople to utilize when making presentations.  It is important to point out to consumers the weaknesses of the “Big Box” stores.  If you sell furniture you have many advantages that are worth noting when you research those differences.

One of the most humorous disclaimers I have noted was mentioned in an article penned recently by Tom Buxton in the August Edition of Independent Dealer e-Zine.  This disclaimer (from Staples Business Advantage Catalog) is a classic example of the smoke and mirror tactics of these folks.  It reads as follows:

Your price. Your final corporate discounted price. This is the price you pay. Prices valid through December 31, 2007. Staples reserves the right to adjust prices in response to market conditions and industry-wide cost fluctuations. Please check StaplesLink.com for your most current prices.”

After reading that I know how the “caveman” in the insurance commercials felt after the razzle-dazzle ‘bull-bleep’ the other interviewer spewed. “Uh, what?!”  If you can’t understand how to sell against that kind of stuff then you have even greater problems!  You know they are going to ramp-up those prices fast because it doesn’t matter how big you are can’t give product away and continue to do business.  Next time you get the opportunity to get one of these guys catalogs, look in the flyers fold at all the fine print and educate yourself.

What kind of disclaimers do you use, or do you even use one?  How long do you guarantee to hold your prices without an increase, or do you?