David Shear continues his series on the state of retail.
Very mafia, right? Well, I don’t think the comparison is very far off. Retail sales require that you know the right people, and that everyone gets their share of the revenue.
The people who sit on the top of the retail food chain are the buyers for each store chain. Buyers tend to be loyal and calculating, and they like to deal with the same group of people year after year.
If your company doesn’t have a large catalog of products in retail, then you probably need to hire a guy who knows a guy. Buyers don’t have enough time to speak with every sales manager from every company who wants to get their product onto shelves.
Each department buyer is responsible for hundreds of products. For every product that makes it onto the shelf, there are a handful of competitors trying to take that shelf space. The buyers don’t have enough hours in the day to speak with everyone who wants a minute of their time. If you can’t get a buyer’s attention, you will never be able to succeed in retail.
Palo Alto Software uses an outside retail sales company to represent their software products, Business Plan Pro and Marketing Plan Pro, in the retail channel. An average outside sales company represents 10 to 20 companies into retail. For a small cut, the reps give you valuable market insight, and even more importantly, they deliver a valuable service that takes years to build. They deliver relationships with the buyers. You are hiring a guy who knows a guy.
As the new sales manager, I started pestering our outside sales company. I wanted to know why sales were lagging and what moves we should be making. I wanted to know why we weren’t selling into the club stores, the mass merchant stores, and why we were not getting any solid marketing opportunities. I was told by our now-fired sales firm that new opportunities were not realistic. I should be happy that our products were still in the office stores. The clubs and mass merchants were not realistic. Retail was just declining and there wasn’t much we could do to slow the slide.
After a month of excuses and lack of movement, our former outside sales firm received their pink slip. I couldn’t take the excuses any longer. I needed an outside sales firm that had vision and a willingness to step outside of the box. After a long interview process, we hired a smaller firm who wanted our business. The reps have become an extension of our sales team. I check in with them as if they work directly for my sales team.
A funny thing happened when we started fresh with a hungry group of retail reps. We got into the clubs. We got into Target. We started receiving marketing opportunities. The new marketing opportunities, new products and new stores started spiking our retail sales. Instead of managing a declining channel, I was reporting on year-over-year increases.
Quite a difference from the status quo I was supposed to be happy with, and all of that because I’d found the right “guy”.
Next time: Where do your customers shop?
David Shear is the Channel Sales Manager at Palo Alto Software, where he oversees all academic, corporate, government and retail sales. David came to Palo Alto Software from the banking industry where he was a regional and national sales manager for Indymac Bank, Optium Financial and Rainland Mortgage; David worked in correspondent and wholesale mortgages for over a decade.
Having attended University of Oregon’s Law School, David is quick to point out that while the Oregon Ducks are his first love, sales come in a close second.
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One year ago I could read the writing on the wall. The retail channel was either dead or mortally wounded. Consumers’ buying habits had changed and product sales in brick and mortar stores were in a steep decline. I had the dubious pleasure of steering a once profitable sales channel into the ground.
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