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Maximize DSD Sales Revenue This integrator’s marketing and sales strategy is expected to lead to a 60% increase in DSD (direct store delivery) sales revenue. Business Solutions, July 2008 Written by: Mike Monocello
What’s your approach to selling DSD solutions? National Datacomputer, Inc. (NDI) has an approach that seems to be working. The integrator is on pace to exceed 60% sales revenue growth in 2008 by selling its DSD solutions (which include O’Neil Product Development mobile printers, Motorola handheld mobile computers, and Micronet Route Rider LE software). NDI focuses exclusively on the food and beverage vertical (i.e. companies delivering soda, beer, coffee, tea, water, bread, and snacks), and, despite its small size, the 20-employee shop is able to sell its solutions across the United States. This success can be attributed to two things — the integrator’s marketing program and sales process. Is Your DSD Marketing Effectively Creating Leads? According to Steve Bergmann, director of product marketing for NDI, his company uses multiple marketing methods to maximize its number of potential leads and gain mindshare among prospective customers. First, the integrator uses direct marketing methods that include telemarketing, e-mail marketing, direct mail, and trade show exhibition. “We outsource our telemarketing and direct mail, often relying on marketing development funds from partners such as value-added distributor (VAD) Avnet,” says Bergmann. “As a small company, it’s very labor-intensive to get our message to the right people and primary decision makers. Eight hundred contacts [which include about three touches to each] cost us approximately $5,000 per campaign.” Bergmann also reveals that in several recent telemarketing campaigns with support from Avnet, one deal alone netted a $1 million project. Visit BSMinfo.com/jp/3313 to see how one VAR sold 1,800 mobile printers for a direct store delivery install. NDI also exhibits at industry trade shows throughout the year. Bergmann says that the integrator belongs to various associations dedicated to the food and beverage markets. “It’s important to be able to track trends in your verticals and then use those trends as predictors of how your DSD solutions need to change over time,” he says. While NDI primarily focuses on national shows such as SNAXPO in March and InterBev in October, the integrator also attends regional shows if there appears to be good value in attending. Bergmann estimates that the cost of a trade show booth at a national show ranges from $5,000 to $15,000. Regional shows are less expensive, averaging $3,000. On top of booth costs are additional expenses such as shipping, collateral, electricity, carpeting, etc., not to mention travel expenses, and tying up key personnel for the better part of the week. With all these associated costs, is it worth it? “We get about 20 leads per show,” reveals Bergmann. “Out of those 20, only a few have the necessary budget and are immediately ready to discuss their needs.” The last bit of direct marketing that NDI uses has yet to prove effective for the company — e-mail marketing. “We did one e-mail blast and found out quickly that it’s not as simple as renting a list of names and sending out your message, no matter how carefully crafted,” Bergmann says. “We used a flawed list, and the results were poor. We’ve since learned to ask more questions to ensure that a list is scrubbed and current [the process of removing inaccurate or suspect data].” It is also important to reinforce interest with telemarketing after the email blast. NDI plans on using several e-mail blast campaigns this year to increase both name recognition and leads to extend its pipeline. Aside from direct marketing methods, Bergmann says NDI also uses indirect methods such as press releases, partner events, and an existing customer referral program. “For press releases, we use a public relations service that distributes the release,” says Bergmann. NDI releases new product information, partnerships, case studies,
and trade show activity. “It costs us about $500 per press release. The idea behind sending out such communiqués is to help us appear in search results when someone searches the Internet for DSD services.” All other marketing tools aside, Bergmann says that usually the best and least expensive source of lead generation is word of mouth. Indeed, the integrator has a referral program that grants future discount incentives to existing customers that pass viable leads to NDI. Regardless of the marketing methods being used, NDI strives to get its message to DSD search committees (midlevel IT, operations, and salespeople) in the markets trying to find a solution. “Middle management often is tasked with putting requirements together for projects,” explains Bergmann. “C-level executives and owners are asked to accept the committee recommendation during the final stage of the sales process.” NDI’s messaging is simple. “We aren’t in the business of selling massive supply chain solutions,” says Bergmann. “We focus on doing the ‘last mile’ of the supply chain, while some of our competitors find DSD only as a complement to their main business lines. DSD isn’t just one of our product offerings, it’s our only product.” A Seven-Step Process To Increase Your DSD Sales Once NDI’s marketing efforts reach the right people and the integrator gets a chance to pitch its solutions, its seven-step sales process begins. The first step is the qualification discussion. This is where the customer describes such things as the problems being encountered, requirements, time frame, and budget, and NDI showcases its hardware and software capabilities to meet the customer’s needs. “We’re always interested in talking to people about their problems and how we might help solve them, but that doesn’t mean we’re going to go after all the opportunities,” says Bergmann. “There has to be a good match between what we are good at and the customer needs. If a prospect comes to us with an electronics distribution problem, it’s probably not a market that we would pursue.” The second step of the process is a route ride. This is where an NDI salesperson will attempt to document every aspect of a company’s DSD process. “This is one practical way to know the high-level requirements,” says Bergmann. “Since most companies don’t issue an RFP [request for proposal] containing all the required features and necessary functionality, we can document these current procedures in a short time and determine the ways we can help.” Bergmann says that NDI doesn’t charge potential customers for this service and might need one salesperson to schedule as many as four visits. He explains that some companies have drivers performing both sales and delivery functions. In those cases, NDI will join a driver for a day. However, many companies separate sales and delivery functions. In those cases, NDI will follow a salesperson on one day and a delivery person the next. Finally, NDI also asks for a sample of the prospect’s data to analyze. Step three is what Bergmann refers to as the “Day-in-a-Life” demonstration. It’s at this meeting with the potential customer that NDI uses the collected route ride information and its own data to make a meaningful presentation. The integrator illustrates to the prospect how activities noted in the route ride are handled with the new system, as well as the various benefits that can accrue from using the new solution. “Because we qualified basic processes, at this stage we know what hardware the customer would require,” says Bergmann. “Therefore, we can use the customer’s own data [collected in step two] on the recommended handheld terminals and printers they’d be purchasing.” Bergmann goes on to say that this meeting typically is very comprehensive, sometimes lasting up to four hours. Because so much information is being presented, NDI also submits a customized printed demonstration booklet with software screenshots, reports, and configuration options. This booklet ranges from 100 to 200 pages. While the route ride initiates the process and greatly increases the likelihood that the integrator will offer a solution that fits the exact needs of the customer, things still can be missed. Indeed, according to a 2007 study conducted by PM World Today, a journal dedicated to project management, 60% to 80% of IT project failures can be attributed to poor requirements gathering, analysis, and IT project management. “There may be processes that are done on a weekly or monthly basis that we wouldn’t see in a single-day route ride,” says Bergmann. There is also back office activity that needs to be reviewed. This is where the step-four GAP analysis comes in. NDI and the prospect will meet to discuss anything that was discovered by the prospect after the “Day-in-a-Life” demonstration or after reading through the demonstration booklet. New project requirements will then be added
as needed. Also at this point there is information gathered for data and configuration design. Customers often have different companies using the same solution. Depots, routes, and driver configurations vary. Data is designed around the business process and operation realities of the manufacturing and distribution process. One size never fits all, but RouteRider LE has vast configuration capability that eliminates the need for a custom solution, which is costly for the customer to maintain and grow. Requirements will change over time no matter how forward looking the customer is. Their solution needs to be able to keep pace. Steps five, six, and seven are the delivery of an actual proposal, an optional ROI analysis, and signing of the contract. There is nothing fancy about the proposal; it’s simply a comprehensive list of components, quantities, and maintenance and professional services costs. The contract simply attaches the proposal to a legal agreement. The ROI option may not be straightforward. “When it comes to DSD, the source of desired ROI can vary greatly,” says Bergmann. First, there are cost reductions that can be accrued by lowering the time to service customers and reducing the numbers of vehicles (monthly payments, fuel, and associated maintenance), handheld computers, and printers. In addition, a new DSD solution can help to reduce the number of employees (and associated benefits) and overtime. Other paybacks can be seen from revenue increases garnered from being able to add routes and customers and optimize route scheduling with partners like UPS Logistics (maximizing customers per route per day). “Successful integrators selling DSD solutions will incorporate these benefits in ROI analyses as appropriate,” he says. How long does all this take? Bergmann says that the process of selling DSD solutions to this space varies in length. On the short end, completing the sales process can take as little as three months. In some cases, completing a sale could take six to eight months. Regardless of the time frame, NDI’s marketing and sales strategy works. The integrator’s four salespeople have a 75% close rate after live demonstration, helping the company reach its expected 60% sales revenue increase in 2008.
Leverage The Benefits Of An Integrated Mobile Printer & Handheld Computer National Datacomputer, Inc. (NDI) specializes in creating direct store delivery (DSD) solutions for the food and beverage vertical. Specifically, the integrator sells O’Neil mobile printers and Motorola handheld mobile computers running Route Rider LE software to companies delivering soda, beer, coffee, tea, water, bread, and snacks. When it comes to the mobile printing aspect of its solutions, NDI relies exclusively on the printers of O’Neil Product Development. A recent solution for a large nationwide baking company highlights the many reasons why. The customer’s drivers deliver bread to multilocation supermarket aisles and need to have the freedom to work hands-free, but also need to have easy access to both a mobile computer and printer. Therefore, NDI recommended the O’Neil PrintPAD. The unit is the combination of an O’Neil 4-inch thermal printer mounted in a rugged case and an embedded communications charging cradle designed for the Motorola handheld mobile MC 9094 computer. The unit has an integrated carry strap and optional shoulder strap. Also optional is an integrated mag-stripe reader. “The customer purchased for its route drivers 75 Motorola handhelds through value-added distributor Avnet and O’Neil PrintPADs directly from the manufacturer,” says Steve Bergmann, director of product marketing for NDI. Bergmann goes on to say that in NDI’s 20-year history of selling O’Neil products, the printers fail less than 1% of the time. “It’s a great product for us to sell, because we consider it to be a maintenance-free product. When we created our support program, we didn’t spend time troubleshooting or worrying about the reliability of the O’Neil printers we sell.” The cost of the hardware (handheld and printers) was $650,000, while the software and NDI services totaled $350,000. www.oneilprinters.com www.avnet.com
What’s your approach to selling DSD solutions? National Datacomputer, Inc. (NDI) has an approach that seems to be working. The integrator is on pace to exceed 60% sales revenue growth in 2008 by selling its DSD solutions (which include O’Neil Product Development mobile printers, Motorola handheld mobile computers, and Micronet Route Rider LE software). NDI focuses exclusively on the food and beverage vertical (i.e. companies delivering soda, beer, coffee, tea, water, bread, and snacks), and, despite its small size, the 20-employee shop is able to sell its solutions across the United States. This success can be attributed to two things — the integrator’s marketing program and sales process. Is Your DSD Marketing Effectively Creating Leads? According to Steve Bergmann, director of product marketing for NDI, his company uses multiple marketing methods to maximize its number of potential leads and gain mindshare among prospective customers. First, the integrator uses direct marketing methods that include telemarketing, e-mail marketing, direct mail, and trade show exhibition. “We outsource our telemarketing and direct mail, often relying on marketing development funds from partners such as value-added distributor (VAD) Avnet,” says Bergmann. “As a small company, it’s very labor-intensive to get our message to the right people and primary decision makers. Eight hundred contacts [which include about three touches to each] cost us approximately $5,000 per campaign.” Bergmann also reveals that in several recent telemarketing campaigns with support from Avnet, one deal alone netted a $1 million project. Visit BSMinfo.com/jp/3313 to see how one VAR sold 1,800 mobile printers for a direct store delivery install. NDI also exhibits at industry trade shows throughout the year. Bergmann says that the integrator belongs to various associations dedicated to the food and beverage markets. “It’s important to be able to track trends in your verticals and then use those trends as predictors of how your DSD solutions need to change over time,” he says. While NDI primarily focuses on national shows such as SNAXPO in March and InterBev in October, the integrator also attends regional shows if there appears to be good value in attending. Bergmann estimates that the cost of a trade show booth at a national show ranges from $5,000 to $15,000. Regional shows are less expensive, averaging $3,000. On top of booth costs are additional expenses such as shipping, collateral, electricity, carpeting, etc., not to mention travel expenses, and tying up key personnel for the better part of the week. With all these associated costs, is it worth it? “We get about 20 leads per show,” reveals Bergmann. “Out of those 20, only a few have the necessary budget and are immediately ready to discuss their needs.” The last bit of direct marketing that NDI uses has yet to prove effective for the company — e-mail marketing. “We did one e-mail blast and found out quickly that it’s not as simple as renting a list of names and sending out your message, no matter how carefully crafted,” Bergmann says. “We used a flawed list, and the results were poor. We’ve since learned to ask more questions to ensure that a list is scrubbed and current [the process of removing inaccurate or suspect data].” It is also important to reinforce interest with telemarketing after the email blast. NDI plans on using several e-mail blast campaigns this year to increase both name recognition and leads to extend its pipeline. Aside from direct marketing methods, Bergmann says NDI also uses indirect methods such as press releases, partner events, and an existing customer referral program. “For press releases, we use a public relations service that distributes the release,” says Bergmann. NDI releases new product information, partnerships, case studies,
and trade show activity. “It costs us about $500 per press release. The idea behind sending out such communiqués is to help us appear in search results when someone searches the Internet for DSD services.” All other marketing tools aside, Bergmann says that usually the best and least expensive source of lead generation is word of mouth. Indeed, the integrator has a referral program that grants future discount incentives to existing customers that pass viable leads to NDI. Regardless of the marketing methods being used, NDI strives to get its message to DSD search committees (midlevel IT, operations, and salespeople) in the markets trying to find a solution. “Middle management often is tasked with putting requirements together for projects,” explains Bergmann. “C-level executives and owners are asked to accept the committee recommendation during the final stage of the sales process.” NDI’s messaging is simple. “We aren’t in the business of selling massive supply chain solutions,” says Bergmann. “We focus on doing the ‘last mile’ of the supply chain, while some of our competitors find DSD only as a complement to their main business lines. DSD isn’t just one of our product offerings, it’s our only product.” A Seven-Step Process To Increase Your DSD Sales Once NDI’s marketing efforts reach the right people and the integrator gets a chance to pitch its solutions, its seven-step sales process begins. The first step is the qualification discussion. This is where the customer describes such things as the problems being encountered, requirements, time frame, and budget, and NDI showcases its hardware and software capabilities to meet the customer’s needs. “We’re always interested in talking to people about their problems and how we might help solve them, but that doesn’t mean we’re going to go after all the opportunities,” says Bergmann. “There has to be a good match between what we are good at and the customer needs. If a prospect comes to us with an electronics distribution problem, it’s probably not a market that we would pursue.” The second step of the process is a route ride. This is where an NDI salesperson will attempt to document every aspect of a company’s DSD process. “This is one practical way to know the high-level requirements,” says Bergmann. “Since most companies don’t issue an RFP [request for proposal] containing all the required features and necessary functionality, we can document these current procedures in a short time and determine the ways we can help.” Bergmann says that NDI doesn’t charge potential customers for this service and might need one salesperson to schedule as many as four visits. He explains that some companies have drivers performing both sales and delivery functions. In those cases, NDI will join a driver for a day. However, many companies separate sales and delivery functions. In those cases, NDI will follow a salesperson on one day and a delivery person the next. Finally, NDI also asks for a sample of the prospect’s data to analyze. Step three is what Bergmann refers to as the “Day-in-a-Life” demonstration. It’s at this meeting with the potential customer that NDI uses the collected route ride information and its own data to make a meaningful presentation. The integrator illustrates to the prospect how activities noted in the route ride are handled with the new system, as well as the various benefits that can accrue from using the new solution. “Because we qualified basic processes, at this stage we know what hardware the customer would require,” says Bergmann. “Therefore, we can use the customer’s own data [collected in step two] on the recommended handheld terminals and printers they’d be purchasing.” Bergmann goes on to say that this meeting typically is very comprehensive, sometimes lasting up to four hours. Because so much information is being presented, NDI also submits a customized printed demonstration booklet with software screenshots, reports, and configuration options. This booklet ranges from 100 to 200 pages. While the route ride initiates the process and greatly increases the likelihood that the integrator will offer a solution that fits the exact needs of the customer, things still can be missed. Indeed, according to a 2007 study conducted by PM World Today, a journal dedicated to project management, 60% to 80% of IT project failures can be attributed to poor requirements gathering, analysis, and IT project management. “There may be processes that are done on a weekly or monthly basis that we wouldn’t see in a single-day route ride,” says Bergmann. There is also back office activity that needs to be reviewed. This is where the step-four GAP analysis comes in. NDI and the prospect will meet to discuss anything that was discovered by the prospect after the “Day-in-a-Life” demonstration or after reading through the demonstration booklet. New project requirements will then be added
as needed. Also at this point there is information gathered for data and configuration design. Customers often have different companies using the same solution. Depots, routes, and driver configurations vary. Data is designed around the business process and operation realities of the manufacturing and distribution process. One size never fits all, but RouteRider LE has vast configuration capability that eliminates the need for a custom solution, which is costly for the customer to maintain and grow. Requirements will change over time no matter how forward looking the customer is. Their solution needs to be able to keep pace. Steps five, six, and seven are the delivery of an actual proposal, an optional ROI analysis, and signing of the contract. There is nothing fancy about the proposal; it’s simply a comprehensive list of components, quantities, and maintenance and professional services costs. The contract simply attaches the proposal to a legal agreement. The ROI option may not be straightforward. “When it comes to DSD, the source of desired ROI can vary greatly,” says Bergmann. First, there are cost reductions that can be accrued by lowering the time to service customers and reducing the numbers of vehicles (monthly payments, fuel, and associated maintenance), handheld computers, and printers. In addition, a new DSD solution can help to reduce the number of employees (and associated benefits) and overtime. Other paybacks can be seen from revenue increases garnered from being able to add routes and customers and optimize route scheduling with partners like UPS Logistics (maximizing customers per route per day). “Successful integrators selling DSD solutions will incorporate these benefits in ROI analyses as appropriate,” he says. How long does all this take? Bergmann says that the process of selling DSD solutions to this space varies in length. On the short end, completing the sales process can take as little as three months. In some cases, completing a sale could take six to eight months. Regardless of the time frame, NDI’s marketing and sales strategy works. The integrator’s four salespeople have a 75% close rate after live demonstration, helping the company reach its expected 60% sales revenue increase in 2008.
Leverage The Benefits Of An Integrated Mobile Printer & Handheld Computer National Datacomputer, Inc. (NDI) specializes in creating direct store delivery (DSD) solutions for the food and beverage vertical. Specifically, the integrator sells O’Neil mobile printers and Motorola handheld mobile computers running Route Rider LE software to companies delivering soda, beer, coffee, tea, water, bread, and snacks. When it comes to the mobile printing aspect of its solutions, NDI relies exclusively on the printers of O’Neil Product Development. A recent solution for a large nationwide baking company highlights the many reasons why. The customer’s drivers deliver bread to multilocation supermarket aisles and need to have the freedom to work hands-free, but also need to have easy access to both a mobile computer and printer. Therefore, NDI recommended the O’Neil PrintPAD. The unit is the combination of an O’Neil 4-inch thermal printer mounted in a rugged case and an embedded communications charging cradle designed for the Motorola handheld mobile MC 9094 computer. The unit has an integrated carry strap and optional shoulder strap. Also optional is an integrated mag-stripe reader. “The customer purchased for its route drivers 75 Motorola handhelds through value-added distributor Avnet and O’Neil PrintPADs directly from the manufacturer,” says Steve Bergmann, director of product marketing for NDI. Bergmann goes on to say that in NDI’s 20-year history of selling O’Neil products, the printers fail less than 1% of the time. “It’s a great product for us to sell, because we consider it to be a maintenance-free product. When we created our support program, we didn’t spend time troubleshooting or worrying about the reliability of the O’Neil printers we sell.” The cost of the hardware (handheld and printers) was $650,000, while the software and NDI services totaled $350,000. www.oneilprinters.com www.avnet.com
