2) When vacation time rolls around and a driver or two quits, the OCS people are pressed into service to run the open vending routes. In these situations, the OCS deliveries schedule can always “slide” for a while, or so you think. Don’t let it happen.
3) Underestimating the competition. No matter what market you are in, the competition in OCS is every bit as fierce as vending.
4) Failure to manage receivables. The average vending company in OCS will not fully understand the critical importance of staying on top of accounts receivable until they are forced to write off bad debts.
The best way to manage receivables is not to have any. Today, most companies use credit cards for purchase transactions and it is the preferred method.
5) Lack of an organized marketing program. Playing by ear never works. You need a formal plan, complete with a budget and action steps.
6) Booking bad business. Stay away from coffee clubs and honor systems. Even if you are paid in full, these accounts are usually the first to cheat and will soon be using your free equipment and getting their coffee from the local big box store. If you insist on taking these accounts, it’s good idea to lease the equipment to them.
In the OCS business, everybody has to sell. Nobody in any sales or service position should be on straight salary or hourly. The “drop the product and run style,” often used for OCS by vending operators, will destroy the account base over time. A passion to sell coffee and allied products has to be spread throughout the organization.
The best way to do this is through strong commission and gain-sharing incentives. Spiffs are often overlooked in OCS pay plans. This is a one-time incentive, payable in addition to the normal commission.
The best advice I can give any new OCS operator is to place a high priority on inside sales. Telemarketing is one of the most underrated elements required for a successful marketing program. I promise you that if you combine a skilled telesales person with a vibrant e-marketing program, you will produce magnificent results.
Ideally, the OCS telemarketer is prospecting for new accounts as well as upselling existing accounts. Using an outside telemarketing firm to upsell existing accounts is not a good idea because you are relinquishing too much control. You should have your own telemarketer, and good ones are hard to find.
As a combined vending and OCS business, it is possible to gain an additional synergy from having a telesales person. The telesales can support both your vending and OCS businesses. He/she finds out all the vital statistics, who has the account now, products used, volumes, unfulfilled needs and wants.
He/she then sets the stage and helps the closer with a written call plan, which generally includes demonstration, trial offers and introductory offers, all designed to get ink on paper in a face-to-face meeting.
Don’t be cheap; pay the inside sales person what you pay your outside sales people. New account sales, route sales and telesales positions all need different pay plans. However, no less than 20 percent of total compensation should come from earned commission and gain-sharing incentives.
OCS IS A MATURE INDUSTRY AND HIGHLY COMPETITIVE
OCS is a mature, well-established distribution channel. Historically, most pure-bred vending operators’ approach to the OCS marketplace has been so dysfunctional that large OCS companies never really consider vending operators as competition.
Well-established regional and national OCS companies have refined their market approach to a science. As with vending, the only accounts to get are those which someone else already has.
Do not expect to dislodge the competition if you are peddling the same stuff the client already has. Find out what your competition is unwilling or unable to do, wrap a persuasive story around it, and attack. Those who are most successful in the OCS business apply unrelenting marketing and innovation.
OCS trends come and go with greater frequency than vending. To gain new accounts and keep them, an operator must be keenly aware of new trends and constantly stay out in front of them. Catching up from the “back of the pack” is not being an innovator and will not achieve growth.