In addition to this presentation, there should be a “Note Sheet” and a “Work Sheet” to be used in conjunction with the presentations. Also, if you are presenting to an AD Affiliate please use the AD 2-slide addendum. The foundation for this program is built upon three key words that should be stressed throughout your meetings – STRATEGY, PARTNERSHIP, AND INCENTIVE. These three words are the keys – the drivers – that you should memorize and fully understand the meanings of these three words as noted below: Strategy – a plan, method, or series of maneuvers for obtaining a specific goal or resultPartnership – the state or condition of being a partner; participation; association; joint interestIncentive – something that incites or tends to incite to action or greater effort, as a reward offered for increased productivity
As the Sales Manager for your specific region – your franchise – the way you conduct these meetings with your key accounts will determine the outcome. You want to be “engaged in a conversation” with the key principals and management of these “supporting” LPS customers. With this in mind, please plan on an hour to two hours for your meetings so that full discussions can take place regarding the partnership and how to strategize for sales growth in 2012.
The first slide refers to a BUSINESS REVIEW which should be done FIRST before the 2012 Program is shared. You need to bring copies of the Usage Reports and Usage & Allocation Reports for 2011. This conversation should include: 2011 sales to 2010 – the ups and downs. In fact, I would encourage all of you to go back 3 years to show a true picture of the account’s LPS business.Discuss the “events” that were completed; such as, product training, vendor shows, etc. and talk about what was good and what could be better.Review the audits you completed and presented in 2011.Where do they stand in terms of sold – RESULTS?Where do they stand in terms of closing?What happen to the ones that “we” did not win?Get into the End-users RESULTS – other than audits – to illustrate what other key sales took place.Give credit where credit is due. Cite those LPS Champions that have helped to achieve these RESULTS.Talk about New Product Sales – successful or not? What could we have done better in our “pull-through” sales strategy?2011 Promotions? The good (What was successful?), the bad (What to improve?), the ugly (Why weren’t there any done in 2010?). These questions are all important to have answers to – to help YOU and US become better at what we do. The answers may also help you to determine the course of the discussion as you get into the 2012 Strategic Advantage Program.
Prior to this meeting, review and reference any notes from the previous year’s meeting.
For 2012, the “base” minimal performance required for a distributor to be on this program is built on two things: Provide $25K in annual purchases; and, Provide three product training sessions in 2012. (Ideally, you want to secure the Training Dates during your meeting.) The incentive for the account is the “flat pricing” program. I must say, however, if that is all we can get from a “supporting” customer – then, we may reconsider any program offerings in 2013. Afterall, what you want is a partner – who can see the “Advantages” of the various offerings in the program. Someone who can realize the potential earnings from the incentive rebates in 2012 – AND, who can visualize beyond the next year for continued sales growth into the future. Above the base minimum required, all other incentives are activity-driven and based upon performance and productivity for these partnering accounts.
Lead with asking SA Partner how many training session you can perform with them. Remember, three is a minimum.
Discuss how you will confirm the success of this initiative.
Discuss how you will confirm the value and success with your SA Partner.
Discuss the total promotion plan with your SA Partner. (i.e. products will have stocked inventory, training, promotion type, incentive, results expected)Conduct a post promotion review to discuss accomplishment.
Strategic Program 12-22
Agenda Understanding Each Other’s Business 1. Discuss and Review 2011 2. Discuss your Company’s 2012 Growth Strategies 3. Discuss LPS’ 2012 Growth Strategies 4. Introduce LPS’ 2012 Strategic Advantage Partnership Program2
2011 Business Review • 2011 Sales to 2010 • 2011 Events (Product Training, Vendor Show, etc.) • What was good? What could be better? • LPS MRO Audits / Opportunities • How many were completed? How many were presented? • How many were sold, lost, and are still pending? • Other End-user Notable Sales Results • New Product Sales • What could we have done better in our “pull-through” sales strategy? • 2011 Promotions • What was successful? How can we do better?3
Distributor’s 2012 Strategy • Salesforce • How are you strategically structuring your salesforce? (Inside & Outside) • Do you plan on adding to your salesforce head count? • How are you incentivizing your salesforce for growth? (Commission, Gross Margin) • Sales Strategies • Do you have a defined sales process? What is it? • What new markets and sales channels are you planning to enter? • Are you using any new sales enablement tools? (CRM) • Markets and Accounts • What new accounts are you targeting? • Are you noticing any specific “emerging markets” in your operating area? • How do you differentiate yourself from your competitors – Local, Regional, and National.4
LPS Market Position • Rank in Sales / Market Share • Where does LPS rank in terms of your MRO Chemical Sales? • If we are not your #1 MRO Chemical supplier, which Companies are ahead of us? • What is LPS’ approximate Market Share percentage of the MRO Chemicals you sell? • How can we increase our Market Share with you? • Margins • How does LPS’ Gross Margin percentage compare to your other MRO Chemical lines? • How does LPS’ Gross Margin percentage compare against other MRO suppliers? • LPS • How can we better serve you as a supplier? • What do we do well? • Are there things we can improve upon? • What are your Best Suppliers doing that LPS is not doing?5
LPS 2012 Strategy • Organic Growth* • Innovation & New Product Development • LPS and all ITW companies are getting closer to the customer • What are the unmet needs of the End User? • What are the unmet needs of the Distributor? • Employee Development • Investing in Training *Note: Organic Growth for the Distributor may not be Organic Growth for LPS6
LPS 2012 Strategic Advantage Program Distributor Commitments: • Aggressive Growth Plan • Information and Resource Sharing • MRO Chemical Conversions • Quarterly Review Meetings - LPS Regional Sales Manager & Distributor Principals Benefits: • Preferred Partner Status • Flat Pricing • Aggressive Marketing Performance Fund • LPS Sales Training7
LPS 2012 Strategic Advantage Program LPS Commitment • Flat Pricing – Any Quantity (15% off) • Distribution Center Shipments • Branch Shipments: 15 cases = 15% off and Freight Paid • Drum Drop Ship Program to End Users = 5% off (1st Column Pricing) and Freight Paid • Selective Discounts • Competitive Opportunities • Volume Business • High Profile End User Accounts • Special Terms: 2% 30, Net 318
Advantage Program to Strategic Program • Strategy – a plan, method, or series of maneuvers for obtaining a specific goal or result • Partnership – the state or condition of being a partner; participation; association; joint interest. • Incentive – something that incites or tends to incite to action or greater effort, as a reward offered for increased productivity 9
LPS Sales and Marketing SupportSales Training • Minimum of 3 Training Sessions are Required to Qualify for Flat Pricing • Inside Sales People - 1 Session • Outside Sales People - 2 Sessions • 1 Training Session for Q1 will be Determined by Sign-up • Additional 2 Training Sessions will be Scheduled by Q1 ReviewMarketing Performance Funds – 3% of 2011 Purchases • LPS pays out 100% • Flyers (Not 50%/50% Co-Op) • Trade Shows • Open Houses • Customized Growth Incentive • Displays Programs (SPIFFs) • Catalogs • Headers • Pre-approval by the LPS Regional • Point of Purchase Sales Manager is Required10
LPS 2012 Strategic Advantage Program GROWTH AND REBATE* INCENTIVES TO QUALIFY PURCHASES MUST EXCEED 2011 PURCHASES BY 8.0% % GROWTH OVER 2011 % REBATE 8.0% - 11.99% 1% 12.0% - 15.99% 2% 16.0% + 3% *Rebates back to $1 11
Strategic IncentivesDistributor’s “Who Bought LPS” Reports = 1%• Discuss the Purchase of LPS Products• Identify Opportunities for Growth• Potential to Go “Wider and Deeper” and Sell more LPS to Existing LPS End Users• Provide Quarterly with End Users, SKUs, and Distributor Sales Person Information• Above information for Q1, Q2, and Q3 in the Excel File and Format Provided by LPS12
Strategic IncentivesCompetitive “Who Bought What” MRO Chemical Reports = 1%1. What other MRO Chemical Lines are you purchasing with combined purchases over $5,000?2. Provide in Q1 and Update in Q3 with End Users, SKUs, Selling Prices, and Distributor Sales Person Information in and Excel File and Format Provided by LPS13
Strategic IncentivesConvert Competitive Chemical Product(s) to LPS = 1%• At the Distributor’s Inventory Level• Must be over $5,000• Must be Pre-Approved by the LPS Regional Sales Manager• Competitive Product Line Target will be Identified on Sign-up Sheet• Line must also be Reported on “Who Bought What” reports to Verify OpportunityNote: This is a contingent upon completing a Competitive “Who Bought What” Report.14
Strategic IncentivesConvert 4 New Target End Users to LPS = 1%• Each End User must be over $5,000 (Distributor Sales Volume)• List of End User Targets must be Submitted during Sign-up in the Format Provided by LPS• Each Must be Pre-Approved by the LPS Regional Sales Manager• A List of 10+ Targets must be Provided by March 1st in the Format Provided by LPSNote: Competitive Chemical Products and Target End Users must be Independent of each other. No Double Dipping.15
Strategic IncentivesPromote LPS Products in 2012 = 1%A. Must do at least 2 promotions in 2012B. You can only promote the products that are shown here. No Exceptions.C. All items promoted must be stocked prior to the start of the promotion or training.D. Distributors must provide proof of promotion and utilization of marketing funds.16
Coordinated Media Schedule2012 National Advertising • IMPO – Industrial Maintenance and Plant Operations • NED – New Equipment Digest • Industrial Supply – Industrial Supply Magazine17
Strategic IncentivesNew LPS Market Expansion Products = 1%Stock and Support all New LPS Products introduced in 2010, 2011 & 2012.Minimum 2 cases per product. • Guaranteed Sales – LPS “Pull-Through” Sales Strategy • 2 cases of each product must be purchased by the end of Q1 (even if purchased in 2011) • For additional product launches, distributor must purchase 2 cases within quarter launched• Clear Penetrating Grease • T-91® Non-Solvent Degreaser (06716) (06328, 06301, 06305, 06355)• Food Grade Anti Seize • ThermaPlex® Bio Green™ Bearing Grease (06508, 06510) (70714, 70706)• KB 88 Ultimate Penetrant (trigger) • ThermaPlex® CS Moly Bearing Grease (02322) (70814, 70806)• SA-X X-Treme Degreaser (06828, 06801, 06805, 06855)18
Strategic IncentivesLPS Product Approval = $$1. Secure an LPS Product Certification, Specification, or Approval at a Major End User • Automotive • Military •Transit Authority • Aviation • Railroad • Utilities • Food2. Assist LPS in securing an industry recognized certification, specification or approval and LPS will incentivize up to 5% of the total volume of the approved product. (Must be Pre-Approved by LPS Sales Management)19
LPS 2012 Strategic Advantage Program % GROWTH OVER % REBATE 2011 Level 1 8.0% - 11.99% 1% Level 2 12.0% - 15.99% 2% Level 3 16.0% + 3% *Rebates back to $1 20
LPS 2012 Strategic Advantage Program Incentives Summary Discounts and Rebates Percentage Flat Pricing 15% Special Terms 2% Aggressive Marketing Funds 3% Growth Rebate 1%, 2%, or 3% Strategic Incentives Percentage Distributor’s “Who Bought LPS” Reports 1% Competitive “Who Bought What” MRO Chemical Reports 1% Convert Competitive Chemical Product(s) to LPS 1% Convert 4 New Target End Users to LPS 1% Promote LPS Products 1% New LPS Market Expansion Products 1% Secure Specifications, Certifications, or Approvals TBD Total Strategic Incentives Potential 6%+21 Grand Total Potential Incentives 29%+