Tips for Territory Managers – Determining Return on Investment for Territory Managers
It took me many years as a territory manager (TM) to realize that I could not be all things to every dealer. It is a natural tendency to think that all of our accounts need and want our help. Obviously, this is not the case and is also not sustainable from a time management standpoint. Time management is such a vital part of the TM job that I would argue that the term territory tanager should actually be changed to “time manager.”
This raises the question: Where should I spend my time? This question is more vital to the TMs who practice value-added consultative selling versus those who are purely transactional. A transactional TM is one that simply takes orders and answers phone calls and emails. In some cases, a transactional TM will go see customers but does no more than drop off price sheets or marketing fliers. A value-added consultative TM, on the other hand, is someone who spends time working with the dealers to develop strategic business plans, dives into KPI performance measurements, analyzes financials and discusses marketing strategy, just to name a few. Clearly, this takes a lot of time. Where do you spend it and who do you spend it on?
Return on Investment
As a TM, we have probably all experienced the frustration of spending a tremendous amount of time with a dealer practicing value-added consultative selling, only to realize that the dealer did nothing. To make matters worse, you then feel tempted not to invest in another dealer to the same level. Don’t be discouraged! There are plenty of dealers out there who will value that deep level of business support and will give you additional business in return. We simply have to find them!
First, I want to segment my account list. I am going to put my accounts into three sections:
These are dealers who I have identified that don’t have high growth potential and that are not necessarily interested in growth. That’s okay. I realize that these accounts will still need to be serviced, but they are not ones that I will spend a great deal of time with. I am in no way saying that these accounts are not valuable to our overall book of business, but instead that they need to be dealt with differently from a time management perspective.
Existing Growth Accounts:
These are dealers who have expressed interest in growing their businesses and have trended in an upward pattern. I want to determine who out of this group truly wants my help and advice on how to fuel that growth further. One thing to note is that I also want to identify new customers that have upward growth patterns that I want to target as well that may become value-added growth accounts.
Value-Added Consultative Growth Accounts:
This is where the real work gets done. These are the accounts, existing or new, that I have identified will value our supplier-dealer relationship, are open to working with me as a TM, and will value me as a business consultant in that process. The tricky part is determining which of these accounts I want to invest my time. This is where the 3-A Rule comes into play.
The 3-A Rule
The first step in determining whether or not I am going to invest serious time in a value-added consultative relationship is to determine the attitude of the dealer. Do they like me? Do they value my opinion? Are they easy to work with? All of these should be a “yes” before moving in further. The next question is, “Do they truly want my help?” Some dealers will tell you they want to grow but if they don’t truly want your help and value your time, do not proceed into a deep level of trying to be a consultant. The bottom line here is if the dealer has a great attitude and is easy to work with, they are a candidate for value-added consultative selling. But there are two more tests to pass.
Just because a dealer passes the test of the first “A” and has a good attitude, that does not mean they have the ability to execute. Some dealers have an awesome attitude and a very positive outlook on everything in life but still get nothing done. You have to ask yourself if the dealer has the leadership, communication, and delegation skills to get things done. Can you put timelines on completion dates and know if the dealer will meet those deadlines? If so, the second “A” test — the ability test — is passed.
This is where the rubber meets the road: How much time will I invest in working on business solutions with a dealer? At this point, we have determined they have the right attitude and the ability to execute, but does the entire dealer team have that as well? A strong owner may be the one who gets things done by sheer force. Altitude comes in when that company has the culture and the owner trusts the team to make decisions and get things done in his/her absence or by pure delegation. If the company culture is such that everyone is bought-in and on the same page with the growth plan, and everyone is accepting of your help and support, then they have passed the 3-A Test. These are the dealers for whom I want to take a deep dive into all aspects of the business and help them grow and become profitable, while knowing that my business will grow with them.
In my experience, I have found that only a handful of dealers will pass all three tests. Furthermore, as a TM, you only have so much time to spend going deep into a consultative process. Typically, I have found that around 3-5 dealers are the optimum number to work with at one time. However, you want to always be prospecting who else on the account list, or potential new customers in the market, may pass the test for future business development relationships.
TM Skill Sets
Many of the TMs that I have worked with want to take their customers to the next level and deal with them in a value-added consultative relationship, but are afraid to go down this path due to a lack of confidence. Don’t let that stop you. Start with your friendly dealers and be transparent about wanting to learn new skills with them. You don’t have to have been a contractor to do this, but you will need to immerse yourself in learning all aspects of contracting. Take courses on contracting processes, financials and KPIs, and ask high-level open-ended questions along the way. Be genuine and take the approach of always learning. In the end, you will reap the rewards of a new level of connection and respect with dealers by being committed to both your and their personal and business growth.
To learn more about understanding the contractor business, log on to https://mycontractoruniversity.com/ and stay tuned for future tips for TMs.