Aggregates Manager

October 2013

Aggregates Manager Digital Magazine

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Page 27 of 90

SALES AND MARKETING Capitol Aggregates evaluates customers in two dimensions: volumes and margins. Its customer portfolio is then divided into four quadrants using these quantitative methods. the price? Or, is a good relationship one in which our customer's extra-curricular activities match our sales representative's outside interests? Are good relationships started on the golf course or at the hunting camp? I would argue that good relationships need much more than these characteristics to be defined as beneficial. For most relationships, the interaction between the two parties needs to be mutually beneficial. This involves the sharing of ideas and finding ways that both parties can achieve their desired outcome. Too often, our customer relationships end up being very one-sided where the supplier is expected to cut price to help the customer out. If the only benefit that the supplier can bring to the relationship is a function of price-cutting and entertainment, then maybe we need to examine the benefit of having a sales team at all. Wouldn't we be better off to 26 have a fax machine, or better yet a Twitter account, that can be utilized to publish our up-to-the minute pricing? Quantify sales costs The aggregate industry is filled with analytical people who will spend hours identifying ways to drive pennies out of our operational costs. These individuals measure every minute detail of their operations. They know the costs of all parts of the operation and are fanatical at examining the cost benefit of any type of capital expenditure. Yet, we do not take the same disciplined approach to our sales efforts. When was the last time that you measured the return on a hunting trip? How would you go about it, even if you wanted to? It is actually easier than you might think. If we choose to invest money in a customer relationship, we should expect some type of return. To generate a return, we need to either increase revenue or decrease costs. Revenue is a function of quantity sold and sales price. These are two easy metrics to monitor and for the sales team to control. Costs are a little more difficult; however, the sales team can greatly impact costs by what portfolio of products they choose to sell. Are our sales teams spending the time to actually determine what they are trying to achieve through their various sales activities, or are they simply doing what they have always done? While the sales methods used 20 years ago might have been very effective then, we are now living in a time when all costs are being scrutinized, and we must spend time developing a plan of what we are trying to achieve. Understand customer types We must recognize that not all customers are equal and will thus require different servicing strategies. Some customers purchase lots of material from our companies, and some purchase smaller volumes. Some customers are highly profitable, and some are not at all. The first step in developing a focused sales strategy is to examine and classify each of your customers. There are a variety of classification tools available to the sales executive today and each one has its benefits and drawbacks. Over time, I have found that I tend to favor those that are simple to use and to explain to the sales team. In examining our sales portfolio, I have asked our sales representatives to do this in two dimensions, volume and margin. With these two characteristics, our customer portfolio can be broken down into AGGREGATES MANAGER October 2013 Sales&Marketing_AGRM1013.indd 26 9/18/13 3:35 PM

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