supply chain technologies ❚❚❚❚ direct store delivery
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.
By Mike Monocello
Steve Bergmann, director
r of
product marketing for National
n
Datacomputer,
t
, Inc., says that
h
telemarketing
led to a $1 million
a
DSD project
for
pr
o his company.
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July 2008
www.BSMinfo.com
supply chain technologies ❚❚❚❚ direct store delivery
W
hat’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,
Photos by W. Marc Bernsau
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 our DSD partners,” says
MoreInfo
o Visit
Bergmann. “As a small company, it’s very labor-intensive to get our message to the right people and pri- BSMinfo.com/jp/3313 to
mary decision makers. Eight hundred contacts [which include about three touches to each] cost us approx- see how one VAR sold
imately $5,000 per campaign.” Bergmann also reveals that in several recent telemarketing campaigns cost- 1,800 mobile printers for a
direct store delivery install.
ing $20,000, one deal alone netted a $1 million project.
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 interNational Datacomputer, Inc. (NDI)
est with telemarketing after the e-mail blast. NDI plans on using several email blast campaigns this year to increase both name recognition and leads
2008 projected sales revenue: $3.2 million
to extend its pipeline.
Aside from direct marketing methods, Bergmann says NDI also uses indi2008 projected sales growth rate: 60%
rect methods such as press releases, partner events, and an existing customer referral program. “For press releases, we use a public relations serEmployees: 20
vice that distributes the release,” says Bergmann. NDI releases new product information, partnerships, case studies, and trade show activity. “It costs
(978) 663-7677
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.”
www.ndcomputer.com
All other marketing tools aside, Bergmann says that usually the best and
least expensive source of lead generation is word of mouth. Indeed, the
Vendors: Micronet, Motorola,
integrator has a referral program that grants future discount incentives to
O’Neil Product Development
existing customers that pass viable leads to NDI.
Regardless of the marketing methods being used, NDI strives to get its
Vertical market: Food & Beverage
message to DSD search committees (midlevel IT, operations, and saleswww.BSMinfo.com
July 2008
37
supply chain technologies ❚❚❚❚ direct store delivery
massive
supply chain solutions. We focus on
“We aren’t in the business of selling
doing the ‘last mile’ of the supply chain.”
Steve Bergmann, National Datacomputer, Inc.
people) 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
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 print-
For its direct store
delivery solutions, integrator National Datacomputer, Inc. (NDI) relies
on the O’Neil printPAD.
ers 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-
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July 2008
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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 275 Motorola
handhelds and O’Neil PrintPADs for its
route drivers,” 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
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
supply chain technologies ❚❚❚❚ direct store delivery
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
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July 2008
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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. ●
Mike Monocello, a former VAR, is the editor of supply chain/point of sale technologies for Business Solutions magazine. He
can be reached at [email protected].
To read his online opinion column, go to
www.BSMinfo.com.