We are clearly now in a Post-Bubble Economy – how to manage in these times? We have to admit - the recovery that experts have been forecasting all year hasn’t materialized. In fact, the famous Brooklyn Dodgers baseball cry: " wait till next year!" has been uttered more times in the last month by members of the plastic semi-finished products industry than in the history of that famous ball club.
Some economic anomalies that have occurred:
- The U.S. stock markets have lost roughly $7.5 trillion – half their value. Add in the parallel losses on all other global exchanges and the paper asset deflation is huge.
- Total debt in the U.S. for corporations, government and consumers is more than $32 trillion – U.S. debt is growing faster than the underlying economy, ditto for the rest of the world.
- Starting in 4th Qtr 2001, for the first time ever, consumer spending increased during our corporate capital expenditure downturn – temporarily pulling most companies out of recession while industry remains in a non-spending mood.
- Productivity capacity gaps assure higher unemployment with productivity slowing.
- Inter-related bubbles such as stock market, phoney corporate profit reporting, appreciation of the U.S. dollar, debt, and excess global production capacity investment.
We haven’t seen a post-bubble economy in the U.S. since 1929. With fighting inflation being the emphasis since World War II, most governments are off course in their fiscal actions and don’t recognize that they may be in a Japan-like economy – consumer spending won’t save us.
What should distributors do?
- Reduce debt because of our deflationary times. Borrowing at 4% to finance inventory deflating at 2% per year with no profits from which to deduct the interest is an invitation to disaster.
- Identify and deal with big volume, good credit customers and sell them.
- Buy commodity inventory in smaller quantities to increase turns.
- Consider cutting out the bottom 50% of all stocked items that are 1% of sales.
- Close non-performing locations.
- Sell over-appreciated commercial property.
- Boost employee morale and productivity.
For more details on Post-bubble economy management contact the Merrifield Consulting Group of Chapel Hill, NC or Modern Distribution Management, St. Paul, MN, who have published a most comprehensive report on this critical subject, which was the basis of this section of this column.
Another hot topic around the halls of the annual IAPD convention was how to sell your way out of this lingering recession and how to reverse the funk of the last year.
Since most of our readers still sell primarily via the phone, we were intrigued by the title of a recent article on the internet at www.davekahle.com.
The Top 10 Mistakes Made by Salespeople When Using the Phone, and What You Can Do To Avoid These Errors – by Art Sobczak:
- Sending Unnecessary Literature – make sure the person you send to has buying authority
- No Post-Call Review – did you feel it went well?
- Poor Telephone Image – listen to yourself on tape
- Lousy Listening – why do you need to listen?
- Getting Past the Screener – ask for their help.
- Inadequate Questioning – needs filled, problems solved?
- Poor Preparation – set your primary objective.
- Misunderstanding Objections – dig for the reasons behind objections and counter with " I see…well let’s talk about that"
- Reluctancy to Get Commitment – the trial close must ensue
- Opening Statements that build resistance, not interest – state a benefit and engage in conversation so you can listen.
In conclusion … Gain your customers trust…fast! Sell relationships – not products!
Watch the results that follow and forget having to say to yourself and your employees the old tired adage - "wait till next year". Here’s to a Happy and More Prosperous 2003!
For more information, click on the Author Biography link at the top of this page.