Fix Sales Problems

Increase Sales and Profits ; Create Distinction

The most common question I hear is; how do I increase sales and profits quickly? If you have read any of my other posts my answer will not surprise you; understand current market truth, understand your internal truths, and communicate with buyers how you uniquely solve their problems in a way that resonates based on the way they are buying today. Wow, quite a mouthful and I just wrote it. After meeting Scott Mckain recently and reading his book; Create Distinction I now will answer that question much more concisely.

If you want to increase sales and profits quickly you must Create Distinction!

This book does an excellent job of identifying four pillars of creating distinction and the author provides a summary and action items after each chapter that helps you regardless of your experience or inexperience in creating distinction. Having been tasked with increasing sales and profits quickly for over 30 years now I wish I would have had this road map much sooner.

It was the late 1980’s and I was asked to help a small plastics company increase sales and create a repeatable sales growth process. At the time video rental was beginning to grow rapidly. It seemed like video stores were popping up on every corner. Our company made two primary product categories; manual security devices to prevent the theft of music at retail stores and video protective packages. Before I get too far I need to share we were very small and we faced an 800 lb gorilla of a competitor in a company; Amaray. They were so entrenched in this market our customers would fax us, Alpha Enterprises, orders for Amaray boxes. Ouch!

As video rental continued to grow the number of independent rental stores grew to over 28,000 locations. For those of you much younger than me there were no Blockbuster, Hollywood Video, and Red Box was just a crazy idea in its inventors mind. Even libraries started adding video inventory and you could check out a movie, like a book and the best part they were free!

I received a call from an angry librarian in Nashville Tennessee one day. (My local dealer was kind enough to give her my direct phone number we did not have cell phones back then) She was very upset that our video rental boxes were not lasting and the VHS tapes inside were being damaged. As an aside you have not been chewed out until you have been chewed out by a highly educated, underpaid librarian.  So I decided to visit her Library to better understand how this could be happening. When I arrived I was shown our boxes behind the counter in cabinets with the tapes securely snapped inside. Then she showed me to her 24 hour book drop return and I quickly saw the problem. Unlike video stores who only have other videos drop through the night return slot, in libraries they have books and journals of various sizes dropping approximately three feet onto whatever was returned recently including video boxes. The return tray was littered with shards of plastic and I observed a damaged VHS tape with the tape spilling out. I assured the librarian we would find a solution to this problem and we would make it right.

When I returned to our offices I met with our engineers and purchasing department and shared the new criteria, new conditions our video boxes needed to perform in. Working together our engineers changed our designed and reinforced the inner hubs that held the tape securely in the case and tightened the latch that kept the case closed. Our buyer did a great job working with our plastics vendor and we developed a blended material that would make our boxes almost have a rubbery bounce. We tested our product, refined it then launched; The” Alpha Case” with the new exclusive polyduralyne material. We shared how we improved our video boxes and launched a campaign that made sure all our dealers, dealer salespeople and their customers were aware of what we did. I wrote a pretty basic PR story that was featured in the industry trade magazine at the time.  The next thing we knew we were receiving calls from Library distributors like Demco, Highsmith and Gaylord wanting to buy this new video box that lasts in library 24 hour drop boxes with polyduralyne.  Polyduralyne is a name I made up , it was much more interesting that saying X% of this resin, X% of that resin…. The other thing we did was increase the price for “Alpha Cases” to 48 cents. This was unheard of as you often lost orders to competitors for 1 cent price savings and the market price for video boxes was around 36 cents.  Word spread to video retail stores as well and the next thing we knew we were seeing sales climbing 150% per month. In addition we realized a 25% increase in profit margins! Back then I did not know we were creating distinction; we were just focused on being the leader in the market.  We knew were onto something when our rep from our resin supplier called one day….” Mark, what the hell are you doing? And what is Polyduralyne? My boss is getting calls from your competitors wanting to buy this material!”

What our team did back then was take a product, considered to be a commodity and we created distinction. As a result our sales continued to climb and we reinvested those additional profits in other new innovative solutions. Eventually we grew larger than our 800 lb Gorilla Amaray, and we eventually bought their business in the US! Flash forward and we eventually sold our once $ 3 million small plastics company to a venture capital firm for over $300 million!

If you do not create distinction for your buyers, they will use price as the only distinction.

Scott McKain’s book; Create Distinction provides you a common sense road map to drive similar results in your business.

Is your sales team facing price pressures?

Has your product or service been determined to be a commodity with your buyers?

Does your business need to create distinction?

How often do you find in your win loss calls you lost an order due to price?

What has your business done to create distinction in the minds of your buyers?

If your business would like to experience increased sales and profits you need to read Create Distinction. If you would like to see your sales growing 150% per month and your bottom line 30% greater than others in your market you need to buy yourself and everyone on your team a copy of Create Distinction. ( or you can worry your competitors are reading it and applying its road-map today) There has only been one instance, in 30 years now where this did not work and that was due to a company culture that did not want to accept they needed to change…but that’s another future post.

This Post Has One Comment

Leave a Reply

Your email address will not be published. Required fields are marked *