Selling tactics for a slow growth heavy-duty market

The non-recovery from the 2008-2009 heavy-duty parts market recession may continue to creep along for sometime. Certainly the recent hours-of-service (HOS) regulations, technician and driver shortages and softness in the worldwide economy don’t clear the economic crystal ball at all.

Because of this weak recovery, review your marketing assumptions and decide which tactics to pursue over the next 12 months. Some common sense assumptions are that:

• When customer confidence is low, they sit on their wallets and don’t respond to many (any) normal marketing efforts. They are a waste in this slump.
• Of the three ways to grow sales: get new customers; sell more to old customers; or to reduce the attrition rate of old customers. The last two are the most short-term efficient.
• Selling more commodity, high-volume products is tough, because demand for them is off and they are most aggressively price-shopped by customers.
• Niche products, however, can be sold on benefits that deliver overlooked value for special applications.
• Customers may be open-minded to trading down in quality if a less expensive solution will suffice. Price is fluid now!
• The volume that is sold through “alternate distribution channels” has grown significantly for years; their growth penetration at the expense of full-service outlets can accelerate during tough times.
• It is always easier for heavy-duty distributors to sell more of the old, established products than new ones.

Programs That Heavy-Duty Specialists Should Pursue

Retain accounts better than the competition by measuring, achieving and selling unconditional performance guarantees on basic aspects of your product/service package. This is a bold approach, but a great tool to increase overall organizational competence. The performance failures can be used to rethink and improve operational procedures.

Sell more of the old, niche products to more old customers. A marketing experiment done by a national, multi branch operation got the following results from four different programs:

This distributor got 15 times more incremental sales from programs aimed at selling more established products to existing customers than they did trying to sell new-to-the-firm products to prospective customers. We might also infer from the results that it is easier for a sales force to master new products than to crack new accounts. DUH.

In comparison to any other sales programs, selling older, product solutions to existing customers will:

• Have the highest profit flow-through to the bottom line;
• Take the least amount of sales effort and expense;
• Meet the least amount of can’t-afford-it-now resistance and price-shopping tendencies from customers.

Be Bold!

Instead of selling solutions to a customer one at a time, suggest to important customers that they consider making you a sole supplier for all of your possible solutions for the long-term. This assumes that you can present scale economies and system re-design savings that both parties can create and share.

Conclusions

Because slow growth economic times might be with us for a while, it is important for heavy-duty suppliers and distributors both to actively study their short term alternatives:

• Continually sharpen strategic focus to reflect even unpleasant market trends;
• Confront your business plan and test everything against a slow-growth scenario;
• Rethink traditional marketing budgets and programs accordingly.

The best run parts and service distributors — who have been growing profitably for years — don’t break stride during tough times. They often do well in recessions at the expense of over-extended and unfocused competitors who are not focused on the real world.

Taking care of today’s customer needs is the sine qua non of the future. Looking forward. Find new ways to better segment and penetrate our local and loyal markets.

Bill Wade is a partner at Wade & Partners and a heavy-duty aftermarket veteran. He is the author of Aftermarket Innovations. He can be reached at [email protected].