Success in business is not always about coming up with new ideas for selling beyond-the-ordinary products and services. As we’ve seen over and over, it’s about reading the room that is your end-user client base and studying the markets you serve for potential offerings. You’re not telling your customers what they need (or at least you shouldn’t); they’re telling you. If you think a new offering has merit, don’t just bounce the idea off your exec team. Canvass the customers!
Behind every great idea (even so-so ones) waiting to be acted upon is a firm commitment and an action plan that can aid in its execution. It is the ability to execute that spells the difference in success with a newer offering or the deafening chirps of crickets. Ancillary products are like new plants; when not fed and given the attention/nurturing they require, they’ll shrivel into brown tumbleweeds blowing across the bottom of your website.
In this week’s installment of the State of the Industry report on ancillary products, our dealer panel provides insights into what you should keep in mind when going down the road of a particular offering. They’ve been there, and their experiences can help you gauge whether a given offering might be an optimal fit for your client and prospect base.
As we’ve seen, not every ancillary offering can translate well with a client base. When Eakes Office Solutions of Grand Island, Nebraska, embarked on janitorial and sanitation (jan/san) products, it stood as a stark outlier from the balance of the dealer’s catalog. As such, it requires a top-down buy-in throughout the organization, notes Nate Schaf, director of marketing.
“The products solve a different problem, the buyer is different, vendors–both wholesale and direct—are critical to profitability and you need dedicated sales and service people to sell the products and solve the problems, to name a few,” he said. “It is not a ‘me, too’ category. Customers expect educated and knowledgeable sales reps to be a consultant and help navigate their facility challenges.”
Necessary Investments
While KDI Office Technology of Aston, Pennsylvania, moved into business process outsourcing, President and CEO Rick Salcedo offers a more holistic approach to ancillaries in general. Understanding clients’ needs is foremost in cultivating a platform that can adequately address them in order to make it a more compelling offering.
Investments in training and education help ensure both your sales reps and customers have a deep understanding of the products and technologies and goes a long way toward positioning the ancillary effectively in a manner that can drive value. Also, leveraging partnerships with manufacturers and suppliers that are experts in a given field can enable a dealer to power through the learning curve and provide additional resources and support to your team.
“Be strategic in your marketing and sales efforts: Introducing new offerings requires a strategic approach to marketing and sales,” Salcedo said. “You need to ensure that your offerings are positioned effectively and that your sales team has the necessary tools and resources to effectively sell them. Finally, it’s important to evaluate the financial impact of introducing new offerings. This includes understanding the profit margins and recurring revenue opportunities, as well as any costs associated with training, marketing, and sales efforts.
“By taking these considerations into account, fellow dealers can successfully introduce new offerings to their catalogs and provide additional value to their clients.”
Sage Advice
One of the great things about our industry is the willingness of dealers to share tips, tricks and advice with fellow dealers outside of their market. Kelly Office Solutions of Winston-Salem, North Carolina, was all too happy to provide a western dealer with insights into pure water, pure ice and pure air. Kelly President Tim Renegar sat down with the colleague and provided the key details to getting started and setting the stage for an effective platform.
Canvassing a fellow dealer carries the same weight, maybe even more, as probing your client base for a potential match, so don’t be shy about picking up the phone and asking for insights. “They jumped into it and were really ecstatic,” Renegar noted. “They created a sales team around it and are still running with it today. The manufacturer comes in and gives you a quick training course and works with your technicians.
“I always tell them, make sure you use the very high highest quality water lines; when you’re installing all the fittings, use the highest quality you possibly get. You don’t want to run the risk of any kind of leakage. There’s a variety of things you can do to prevent anything major from happening.”
Importing Expertise
While not always possible, it is advisable to add a product or solution through the acquisition of a company that specializes in it. That holds true for furniture, which was the formula employed by Pulse Technology of Schaumburg, Illinois. That makes it easier to layer in additional manufacturer lines and leverage subject-matter experts who can help a dealer avoid rookie mistakes, notes CEO Chip Miceli.
“Every dealer who expands his or her products and services—whether that’s office furniture or something else—should focus on opportunities where recurring revenue is likely,” he said. “One natural add-on for dealers is selling office supplies and products, including toner, paper, break room items, and so forth. It is always in a dealer’s best interest to do everything possible to become a one-stop shop for customers.”
Not all dealers have the financial and personnel resources to the extent of a megadealer such as Marco of St. Cloud, Minnesota. Jeff Olson, director of project management, addressed the big-picture goals that go beyond their ancillary gem, shredding services, which can be applied to most new initiatives.
“There are many things to consider when adding offerings to your portfolio,” he said. “Can you handle the startup costs without affecting your normal day-to-day business? Will concentrating on growing another area of the business affect personnel and culture? Research who your competitors are and find a way to stand out from them. Focus on what pain you can take away from your client and offer great service.”
