NPTA Alliance White Paper
October 2004

Management of Sales Outlook

CLICK HERE FOR THE FULL WHITE PAPER

Prepared for NPTA Alliance by Jeffrey H. Grover, President, The Grover Group LLC

Executive Summary

In September, 2004, the NPTA Alliance surveyed its members on key issues related to “outside sales” and the management of the sales function. The survey was sent electronically to active NPTA Alliance distributor member companies’ senior management, with a particular focus on those managers who identified themselves as having overall responsibility or line management responsibility for their firm’s sales activity and results.

The survey focused upon critical areas that were felt to impact member sales and profitability. These areas included:

• Hiring Practices
• Employment Agreements, Compensation and Benefits
• Sales Training Practices
• Sales Budgeting and Planning Disciplines
• Recent Changes in Business Practices (related to sales)
• Perception of Future Trends

Demographic/Response: 125 responses were received over a two week period. The surveys were sent only to distributor member companies and contacts.

The survey respondents are broken down into three distributor categories. These included:

• Printing Paper
• Industrial (Supplies/Packaging/Food Service/Janitorial-Sanitary)
• Dual Distributor

Responses by survey question are delineated by distributor category. While the individual question responses are not categorized by annual sales, the following chart represents the demographic of each member category by specific annual sales level:

• Printing Paper Distributors — 32%
• Industrial Paper distributors — 33%
• Dual Distributors — 35%

As you can see, responses were very well divided among the three target groups

This provides a fairly even break between those under $50 million in sales (45%) vs. those over $50 million (55%).

The paper, plastics and allied products channel has experienced rampant change, driven by the needs and demands of its customers, suppliers and other stakeholders. “Outside Sales” has been the primary method that most distributor member companies have used to service their customers.

However, stakeholder expectations within the wholesale distribution channel have forced companies to consider ways to improve responsiveness and performance, while addressing processes that improve productivity and reduce cost. This has challenged the way that NPTA Alliance members go to market, including a careful review of the role of the outside sales representative. Specifically, members are asking themselves how the outside sales representative can more effectively market and represent their companies, increasing sales and profits while managing key profit drivers that impact bottom lines.

This translates into members redefining outside representative expectations and behaviors, driving a review and modification of practices including hiring, compensation, and associated training and management regimens that members integrate into their outside sales teams.

The survey responses suggest that NPTA Alliance members are not only reviewing options, but also making changes. For example, some areas that were often considered difficult to modify, such as “straight commission” compensation plans, have changed. The reader will note that almost half of the respondents are now using compensation plans other than “straight commission.” Companies have taken on non-traditional product lines, as well as integrated electronic services into their customer and supplier interactions. These changes have logically required the outside sales representative to enhance his knowledge and ability to professionally position these products and services with his customers and prospects.

What follows is an analysis by critical area, including data, (where applicable), that depict responses by distributor member segment.

CLICK HERE FOR THE FULL WHITE PAPER