Are you measuring up to ONCLOSEGROSS?

AS an avid fan of the National Football League, Dave Mills can't help but notice that quarterbacks are measured by a QB ranking. He imagines that all NFL quarterbacks compare their ranking to others and strive to improve it.

He sees a parallel in the truck equipment industry.

Sales figures?

No, profitability.

“It's how much is left out of gross profits after you pay expenses,” he said.

In his presentation, “New Techniques for Improving Distributor Sales and Profits,” he laid out his formula for increasing sales effectiveness to maximize profitability: ONCLOSEGROSS.

He broke it down like this:

  • Be ON every deal possible.

    “I can't get a hit if I'm not up to bat,” he said. “We need to be on every deal possible. Let's say I'm the boss of this equipment company. I go to my salesman and say, ‘Hey, Chuck, I noticed that (a competitor) took delivery on six new trucks with dump bodies on them. We sell dump bodies. Were you on that deal?’ He says, ‘No, I didn't know there was a market for any trucks or truck bodies.’ We have to be aware.”

    Mills said the following questions need to be asked of the sales department: How much business is really out there? What percentage are we getting? What should this percentage be? Are we achieving our full sales and profit potential? How effective are out sales efforts? How do we know where improvement is needed? How can we move to the next level?

    He said sales performance can be quantified because top performers strive for excellence. When performance is measured, performance improves. When performance is reported, the rate of improvement accelerates. Standards and expectations should be set.

Opportunities

Mills said the single most important factor to improve overall sales and profitability is opportunities.

To illustrate, he asked the audience to assume that a total annual market of 100 units was available to sellers of similar type products. The current “on” ratio is 30% — meaning that if they had a “close” ratio of 50%, they sold 15 units and had a market share of 15%.

“What does a salesman have to do to be ‘on’ the business or be aware of the opportunities?” he asked. “He has to make some calls. The major weakness of most sales people — and I've seen thousands — is time management and organization. They're terrible. They say, ‘I don't like paper-work.’ I've heard all the excuses.

“Work on the awareness. Work on the visibility of the deals. If you get your people on more deals, do you think you'll close more deals?”

He said “on” ratios can be improved by: having the goal of being the prime supplier; making sure customers think of you first, call you first, and talk to you last; evaluating advertising and promotion to determine what is working; targeting customers; estimating the dollar sales potential for core customers; determining contact frequency based on potential (“some customers are worth being called on every day, some every week”); reviewing territories, number of accounts, and coverage; setting up a multi-level contact system, with service managers contacting service managers, and sales managers talking to sales managers.

“There are certain skills: prospecting, following up, referrals, knowing how to leave voice mail messages,” he said. “Too many salesmen do what I call ‘return to the well.’ They've got these customers and they're their customers. That's fine. But they don't ever go get any new ones. Pretty soon, they lose some of their old ones.”

  • CLOSE every deal possible.

    What is your team's current “average” closing ratio? It must be measured to be managed. Compare quotes vs units sold. How do your top performers compare to others? What do they do differently and better?

Improve ratios

He said “close” ratios can be improved by: knowing, promoting, and selling your USPs (Unique Selling Points); identifying the most common objections, developing preempt and prevention strategies and responses (“there's a science to selling today; it's not just gray-hair experience”); broadening contacts within target accounts; dedicating yourself to helping customers be successful; looking for problems where you can provide solutions; being “on” deals first or early (writing specs); tracking all quotes over a dollar amount you determine; following up on all quotes.

  • GROSS (don't leave any dollars on the table).

    “To make our ONCLOSEGROSS work, we look a lot stronger at the gross profit because that's what pays the bills,” he said. “I can have a million dollars worth of sales with no profits. True? You can ask someone, ‘How did you do?’ They say, ‘Oh, we did $5 million worth of sales last year.’ ‘Any profit?’ ‘No, but we're going broke really slowly.”

    He said “gross profits” can be improved by: focusing on selling “value” and worry less about the competition; and providing outstanding customer service to offset higher prices.

    “Sometimes it's the little things,” he said. “When I started in the truck business, I was in Quad Cities, Illinois. Moline Body Company provided me with my utility bodies. I had another person call me from Mutual Wheel Company. I wasn't giving my business to them. Their salesman found out I was selling tractors. He said, ‘I don't want to disturb your relationship with Moline Body, but I need to stress something to you: We specialize in upfitting tractors. Would you just do one thing? Let me take you to my shop and show you why I think we do tractors better.’

    “So he took me down there and introduced me to his two experts. The first tractor they delivered to me, the grease on the fifth wheel was a rose — the most beautiful rose you'd ever want to see. I took it out to the fleets to deliver and the guy said, ‘That's a rose! I don't want to hook that up. I want to take it home and show it to my wife!’”

    Mills said when he did research for his presentation, he discovered that there was not a lot of hard market data.

He suggested these sources of market data:

  • NTEA market size estimates, by equipment type, in dollars. Members can contact Stephen Latin-Kasper, the NTEA's market data and research director, at 414-294-3408.

  • NTEA Web site. In the market data section, there are articles, economic briefs, new truck sales, work, and vocational truck data.

  • State DOTs. Check if registration data is available.

  • Cross-Sell Report is a private company based in Louisville, Kentucky, that purchases, consolidates, and re-sells vehicle registration data. 502-458-0050.

  • Manufacturers you represent may be able to provide assistance.

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