February 2007

BUSINESS OF WEARABLES
From Niches to Riches

By learning about markets that are new to you, it’s easier than you think to get your foot in the door and make the sale.

By Nowell C. Wisch, MAS

I didn’t say you should be a thief,” I say to Marv. “I said you should be a cat burglar.”
Marv had his hackles up because he thought I said he should be more dishonest when we were discussing new strategies for selling in the coming year. Nothing could be further from the truth. Marv was worrying about losing sales in the limited niche markets his best customers were in that were experiencing economic downturns. He wanted to insulate himself and generate a market expansion that might cushion the fall and keep him solvent. I said he needed to break into new markets as a cat burglar breaks into apartment buildings.

“Marv, stop thinking that sales expansion means working a new market,” I say gently. “You can get a lot of new business by looking within your best customers’ doors. Go after business that won’t be affected by shrinking budgets.”

The greatest misunderstanding in the kingdom of sales is thinking that “new” means “New!” When we think of opening new markets, we tend to think of vertical segments. Restaurants, for example, are a vertical segment of food service. Grocery stores are also a vertical segment of food service, but their needs are quite different. A distributor who’s already selling into those markets will tend to think of a completely different industry if they intend to open a new market. While this isn’t necessarily a bad thing, it’s not always a necessary thing to think like this. We need to divide our thinking into niches and segments.

Real ways to work it
Jonathan, a distributor I met in the Midwest, told me that he decided to go after a new niche last year as his housing manufacturer was experiencing an economic downturn. “Where I used to sell them $40 worth of items for each property under construction, they now had a third as many housing starts so my gross sales went down,” he says. “I looked around and decided to try the adult and retirement living community and eventually wound up opening clients in the critical care business, too.” While this was an entirely new niche for him, and it was tough going at the beginning, now his work is paying off.

And, Rana, another distributor I know, is developing new markets within her chosen niche. “I’ve been cultivating parking companies and garage operators. I never would have thought that there’s a market for promotional items in this arena and I was, to a large extent, correct,” she says. However, she’s generated some good sales in uniform shirts, jackets and caps. That’s led her into good sales in other segments of the company including operational products such as clipboards, binders and pens. “I’ve studied them thoroughly and sell every operator in our three-city area,” she says.

The referral trail has always created opportunities for both niche and market expansion. Referrals point us in a direction and help us meet a new prospect. Almost everyone I know credits a referral or a chance encounter with a buyer for a significant amount of business. Because an active referral program brings lots of new business, for years I’ve taught that we should ask for a referral on every single sales call we make. Try it; it works.

"Breaking into new markets is mostly a study in listening. If the prospect lets you in the door it’s because he’s not getting something he needs from his current vendor. Finding out what that is will be your key to success."

Rana agrees. Her top three accounts came to her through friends or previous clients. “I ask for referrals constantly. In one case, my customer demanded that I speak to her girlfriend, a buyer with another company, and made me call for an appointment before I left her office,” she says. “I set up an appointment for that afternoon and now I get thousands of dollars in business from her friend.”

My friend Maria recently developed a new market that came on her radar while interviewing replacements for a departed employee. One of the applicants mentioned that she knew the buyer at a nearby casino. Maria didn’t know much about the casino business so she took an afternoon off to do research into what casinos need and what they use. Spending four hours at slot machines, poker tables, restaurants and gift shops gave her a cursory understanding of their operations, so she stopped by the office on her way out.

Taking only a few minutes to set up an appointment, she asked if she could take a couple of issues of the gaming business magazines in the lobby to study before coming back for a sales call. The magazines gave her a viewpoint to start with and she learned some of the lingo of the gaming business. After the first interview, she applied for her gaming license (a state requirement) and got her first two orders for shirts and magnets to be sold in the gift shop.

‘The Amway way’
Another way to break into new markets is to do it “The Amway Way.” My colleague Rob told me this story: “Years ago I spent a little time in the Amway business. We were taught to ask everyone questions and then tell a story to anyone who would listen. Everyone I met was a suspect, and everyone I spoke to was a prospect. We were taught to never overlook anybody who might become a customer or a sponsored distributor.

“I’ve carried this with me ever since and approach everyone I meet as a possible client or customer. Of special interest is anyone who’s involved in a business that I know nothing about,” he says. When he does research, he tends to approach problems from a new direction instead of proposing the same old stuff the same old way.
“Breaking into new markets is mostly a study in listening,” Maria says. “If the prospect lets you in the door it’s because they aren’t getting something they need from their current vendor. Finding out what that is will be the key to success.”

Rob agrees. He says the most important thing he can uncover is why the prospect’s current distributor has left the door open for him to make a pitch. “If they’re taking care of the customer, there’s no reason for them to speak to another vendor,” he says.

“The casino buyer dropped some important information at the initial interview,” Maria says. “Their last two suppliers didn’t understand the increased competition they faced from other entertainment venues. The casinos generate a lot of brand loyalty among their best patrons. Many buy shirts, hats and jackets to ‘show their colors,’ as he put it.”

The distributors were selling cheaply made and embellished goods because they didn’t think the client would purchase anything nicer. They were wrong. “I never offered anything I wouldn’t be seen in, and I don’t wear cheap clothes,” Maria says. “My first sale was an upscale jacket with 20,000-stitch embroidery in nine colors.”

Do your homework
Marv and I penciled out a plan to break into new niches within his existing customer base. His business fundamentally is sound so prospecting new accounts is less important than finding new sales. His sales are mostly to mid-sized manufacturing companies with 200 to 400 employees. Since he’d been concentrating on the marketing department, he looked for ways to break into human resources, production and safety, each one a new niche for him. He went through back issues of Counselor and other publications and read articles about those niches and markets. Using the referral method proved to be the best plan, and his marketing department buyers helped him find their counterparts who do the purchasing in those other company areas.

It seems to be working. His biggest customer has an employee cafeteria that provides 500 meals a day. An article on restaurants helped him gain an order for new uniform shirts, chef coats and aprons. He read a story on plant safety programs and has sold three orders to two different safety-oriented clients.

He’s planning a presentation for next month that will address employee of the month programs for all of his customers. “This is a first. I’ve sold a few awards but I never did a program,” he says. “I called up a couple of suppliers and asked for help. I was surprised at how much they gave me. One even sent its rep to see me and bring me samples and case histories that will close the deals.”

We can always be successful working new markets and niches if we don’t restrict our focus on what “new” means. “New” is only new if it’s new to you. If you look for what’s new to you you’ll find sales, clients and opportunities that lead you to …

Happy Selling!