Get Picked

Equipment manufacturers and their distributors are becoming increasingly concerned about the cost of acquiring new businesses. Virtually every dealer is subsidizing the cost of every new piece of equipment sold.

There are effective ways of dealing with the problem, but the big question is are dealers and their salespeople willing to embrace solutions that are working for others? So what are others doing? They are getting noticed.

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Claiming the High Ground

Maybe you’re like me. I know my sales territory (it’s North America), and the businesses that compete with me (all they do is lead generation) and the difference between what we do and they do is obvious. Problem is, to my target market the differences aren’t obvious at all. By and large, they see us as peas in a pod. Can you relate to any of this?

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The 4 Keys to Driving Remarkable Growth

In many ways, high growth distributors aren’t all that different from average distributors. They focus on getting good people, providing quality products and services and maintaining their sales. But there are a few things they do differently, the things that generate their success.

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4 Ways to Position Your Distributorship

Most dealers believe that it’s the background of their managers, the depth of their sales team, their key personnel and brand that gives them their competitive advantage. That kind thinking is common among equipment distributors. And it’s not that those things aren’t important, they are. But if you do a little research you’ll see that almost every dealer makes pretty much the same claims.

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5 Tips to Differentiate Your Distributorship

Why does a prospect choose one business over another? Price is the first thing that probably comes to your mind, but price does not top the list. More often than not, top companies differentiate themselves by using one or more of the following competitive advantages that clearly set them apart in the marketplace.

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STEP 1: How Our Revenue Growth Formula Works

Several years ago, we learned that just 3 key factors have a direct impact on your revenue growth:

  1. Average Deal Size: The average dollar value of your sales invoices
  2. Number of Sales Leads: The total number of sales opportunities available to your equipment and aftermarket salespeople each year
  3. Average Win Rate: The ratio of leads won to the total number of leads

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STEP 2 – How to Increase Your Average Deal Size

What’s the easiest way to increase deal size?   The traditional approach to increasing deal size requires: increased sales training, establishing effective sales methodologies and ongoing coaching.

Though this approach works, it requires time, and a substantial investment.  Our approach is simpler and doesn’t require any of that.  We focus on 3 areas:

  • An expanded view of the 80/20 Rule
  • Identifying your Ideal Customers & Prospects
  • A quick lesson on prospecting

The 80/20 Rule

Ever heard of a man named Vilfredo Pareto?  I’d be surprised if you had, since he passed away almost 100 years ago. Pareto was an Italian economist who created and developed what you and I know as The 80/20 Rule. Pareto’s Rule is applicable in the sciences, in statistics, in business, and most importantly, to your distributorship.

For equipment distributors, the impact of The Rule is that 20% of your customers generate 80% of your total annual equipment sales and revenue. You probably knew that, but here in Step 2 we are going to apply it, because it’s the easiest, quickest, and surest means of increasing deal size.

Ideal Customers & Prospects

Want to discover something amazing that has far reaching implications for growing your distributorship? If you will make a few quick calculations, you will find that your customers in the top 20% generate at least $16 of revenue for every $1 generated by your customers in the remaining 80%.

That is a revenue ratio of 16 to 1, but it gets even better than that! We routinely calculate the ratio for our prospects as part of our revenue growth formula process, and in all the years we’ve been doing that, we have never yet seen a revenue ratio as low as 16 to 1. Usually, we see revenue ratios in excess of 20 to 1.

We refer to this coveted group of customers as “Ideal Customers”. We refer to the remaining 80% of customers as, “Non-Ideal Customers”. Wouldn’t you love to know who your competition’s Ideal Customers are? We can tell you.

Here’s the rest of the lesson–the part that makes all the difference when it comes to growing your distributorship. The Rule also applies to every other distributorship in your sales territory. Also known as: your competition.

To create a list of your competition’s best customers, we take the customers in the top 20% of your customer list, (your Ideal Customers), and analyze them demographically. We want to know the type of work they do, how many employees they have, their annual revenue, etc. With that information, we can generate a list of all of the businesses in your sales territory that match the demographics of your Ideal Customers. Once we have that list we remove your customers from it. The remaining businesses in the list represent your competition’s Ideal Customers.

Having the list of your competition’s best customers is just one of the ways we accelerate growing your distributorship’s revenue and increasing your average deal size.


The customers and prospects that offer the greatest ROI are the ones that qualify as Ideal Customers or Ideal Prospects.

Because we approach prospecting strategically, we focus on this coveted group of ideal customers and prospects. Whether you are doing the prospecting or we do it, it takes time, and time always involves an opportunity cost. And because it does, it is important to maximize the return on the investment.

Step 3 we’ll explain how the Revenue Growth Formula will allow you to increase the total number of sales opportunities available to your equipment and aftermarket salespeople each year.

If you are ready to have a conversation about how we can put our Revenue Growth Formula to work for you and increase your revenue, please click here.

STEP 3: Increasing Your Number of Sales Leads


3 routine sales activities drive distributor revenue:

  1. Deal Size
  2. The Number of Leads available to your sales reps
  3. Your Win Rate

In Step 2 in this series, we discussed Deal Size. Step 3 describes how you can increase the number of leads available to your sales reps.

We regularly measure our customer’s walletshare. The highest measurement we’ve ever calculated is 66%, while most customer’s walletshare is in the middle 50’s. And that is with their most valuable (or Ideal) customers. With the Non-Ideal Customers it’s often in the mid 30’s.

In our 20 years of experience, people normally don’t do what they are not asked to do. Take you for instance. Why are you reading this series?  We asked you to.

So what’s holding you up? My guess is it’s the same thing that’s holding you up from getting more equipment leads. You’ve got plenty of people who can make the sale, what you lack is someone to originate the sale. Someone to ask your customers and prospects for their business.

I know. You advertise, you’ve got a website, your sales reps are supposed to prospect, you supplement that by buying leads, you send email, you network, etc. You do everything…but ask. If you don’t want to do it, hire someone who knows what they are doing to do it for you. It’s easy to monetize such a decision, and we are happy to assist you with the ‘asking’ part of the process.

When we ask our client’s customers why they aren’t buying aftermarket products and services from our clients, we typically get 2 answers.

  • “I didn’t buy because I didn’t know you sold it”
  • “No one ever asked me”

That’s all the sales resistance we run into.

Help! I need more leads!

When distributors think about getting more leads they are usually thinking about getting more equipment leads. Certainly, equipment leads are critical to the long term growth of distributorships. But where is it written that you would have fewer equipment leads if you also worked aftermarket leads? Is there a business reason why equipment and aftermarket leads need to be mutually exclusive?

We began generating equipment leads in 1997. And since then, a single statistic has remained constant. It was true then, and it’s still true in 2016. For every equipment lead we produce, we generate at least 15 aftermarket leads.

More sales leads means more sales revenue. A 5% increase in sales leads, assuming no change in either Deal Size or Win Rate, translates into a 5% increase in sales revenue. Based on last year’s sales revenue, what is that worth to you?

If you want to grow your distributorship and maximize your profits at the same time, you need to give serious consideration to taking as much aftermarket business away from your competition as you can.

I could understand distributors avoiding aftermarket leads if going after them reduced the number of equipment leads available to them, but that isn’t the case. Selling more aftermarket products and services to your customers and to your competition’s customers actually has a positive impact on the number of sales leads available to you.

Here’s why…

Selling more to your existing customers not only generates more sales revenue, it also improves customer retention.

More customers = future equipment sales

Selling aftermarket products and services to your competition’s customers generates more revenue for you and weakens your competition’s customer retention and wallet share. Again, that results in more equipment leads for your distributorship.

In Step 4, we’ll explain how it’s impossible NOT to increase your average win rate by selling more to your existing customers—you won’t want to miss it!

In the meantime, if you have any questions, please feel free to contact us here.