It is so easy to say:
“We can’t do that, because we never have.”
“We can’t do that – my operations manager will kill me.”
“We can’t do that – we have enough SKUs already.”
“We can’t take on that account, it won’t generate enough revenue.”
“We can’t afford to visit the location every week.”
“We can’t change the water filters every quarter, it’s too costly.”
If you are committed to that type of thinking, prepare to lose.
The “Say Yes Strategy” changed the way we did business for the last five years, right up in until our company was sold in January 2017.
Does the old model still work?
Over the years, when prospective clients wanted a basic understanding of the vending concept, I would explain, “The vending machines will cost you nothing, we fill the machines at no cost to you and we generate our income based on 'cashbox revenue.' If there is a service call, we repair it for free.”
Even as the words came out of my mouth. They never made sense to me. Then of course, some operators still promise commissions, even for ordinary locations.
Consider what we are dealing with today in the office refreshment business.
· Higher labor costs.
· Higher benefit costs.
· Higher insurance costs.
· Investment in technology.
· Higher parts and equipment costs.
· Nutrition labeling requirements.
· Special taxes on beverages and snack foods.
· Increased local licensing.
· Increased competition for the “snacking dollar.”
· More people working from home.
While the list could probably go on for a while, we do know these factors have contributed to the demise of the “mom and pop” vendor, massive industry consolidation and a great challenge for operators:
How do we operate profitably in locations that are not in the top 25 to 35 percent in revenue?
This is where we rethink the old model and bring the “Say Yes Strategy” into play.
Say “Yes” – With Conditions
Office managers, facility managers and purchasing managers are expecting a higher level of service – they demand excellence in every type of workplace – and rightfully so. Recognizing the demand for excellence among clients and the importance of amenities in today’s workplace, the table is set for a re-thinking of the old office refreshment model. In the majority of locations – we should throw out the old model. Start delivering excellence and stop giving it away for free.
Case Studies - Using the New Model
Here are three examples – the names have been changed and some poetic license has been taken, but the stories are real.
Example #1 – Heather – The marginal vending prospect
The office manager (Heather) of a sixty-person office contacts your sales team asking for beverage and snack vending. “The last vendor was terrible,” says Heather. “He never kept the machines filled. He put in out of date product. He finally just removed his equipment. We need to have vending,” she added. “People work long hours.”
The Problem: We all know that 60 people will not successfully support beverage and snack vending.
ACCOUNT EXEC: “Yes Heather, we will be happy to provide you with vending. Not only that, we will service it like you have 200 employees. The machines are provided at no charge and any service calls are free. Your associates will have a fantastic vending program – a wonderful amenity. How does that sound?”
ACCOUNT EXEC: “Great! All we ask for is three things and I will outline this for you in the written agreement:
1. A monthly sales minimum of $750 per piece of equipment. If a machine only does $400, we will invoice your company for the difference.
2. We will fill the machines completely every time we visit, but if we have any out of date products, we rely on you to cover those products at vend price.
3. We will need to take over the coffee and water service.”
We didn’t always get everything we wanted, but this type of program worked for us on several occasions. Heather may not pull the trigger immediately, but after being rejected by multiple vending companies who do not understand the “Say Yes Strategy,” she will be back in touch. Why? Because she needs the vending service. It is finally clear to Heather that if she wants the vending service done professionally, she will need to pay for it and she has the budget for it – while she might not have the budget for a full pantry service.
Note - If Heather is an existing vending account with suffering sales – have the same conversation instead of just removing the equipment.
Example #2 – Nora – The borderline micro market locations
The president of the company sees a micro market and must have one. He tells facility manager Nora – “Make this happen in both locations!”
The problem: Nora breaks the news to you that she needs two micro markets – one location has 150 employees, one has 80 employees.
ACCOUNT EXEC: “Yes Nora, we have a program that is perfect for you.”
We applied the exact same strategy with Nora that we used with Heather. We contracted with Nora for markets with a hefty minimum, a spoilage provision and of course, we became the coffee service provider.
Nora’s company sent us a check for the shortfall and spoilage every month. Nora’s president loved the market, was proud of it and was happy to pay $3,000 to $4,000 a month for it, between the two locations.
Having the amenity done right was the top priority and Nora had the budget to pay for it.
Again – If Nora is an existing micro market location with suffering sales – she will do just about anything to keep that micro market in place. Share the numbers – have a candid conversation with Nora about what it will take for her company to avoid removal of the micro market – a drastic amenity downgrade.
Example #3 – Jack – The loves Costco, but wants two bean-to-cup brewers customer
Jack has poorly maintained drip brewers. Jack would normally never act on anything, but his boss saw some nice bean-to-cup brewers in another location and he wants two of them – one for each kitchen – with free rent.
The problem: Jack buys everything for the office pantry from Costco. Office pantry items, beverages, snacks – you name it. He loves the low prices – but he really has no idea what he is spending. Plus – having to order everything and put it away when it is dumped in the kitchen makes him look busy.
ACCOUNT EXEC: “Yes Jack – we have just the program for you. Free rent – Free two-week preventive maintenance on the bean-to-cup brewers and you can continue to use Costco.”
We provided Jack with two free bean-to-cup brewers and allowed him to continue buying whatever he wanted from Costco, as long as he spent $2,400 a month with us. If he spent less, he would be invoiced for the difference. He never spent less.
Jack is happy. He improved the amenity dramatically and impressed his boss. He’s paying a little more overall, but the rent and the service is “free.” Best of all, we’re dumping the order in his kitchen instead of putting it away - so Jack can stay busy.
In a roundabout way – Jack is paying for an improved amenity. He has the budget for it.
Of course, you probably have a few existing coffee service clients like Jack who changed their ordering pattern (in a downward direction) over time. Have a conversation with Jack about spending more and buying what he was supposed to buy, or having one of the bean-to-cup brewers removed.
The Internal “Yes”
If you are going to throw out the old model in some locations and take on the “Say Yes Strategy” – then everyone on your team must buy in and that could be hardest part of implementing the “Say Yes Strategy.”
Most importantly – remember this key point: Office managers, facility managers and purchasing managers are expecting a higher level of service – they demand excellence in every type of workplace. It is time to consistently deliver excellence and get paid for it.
I welcome your feedback. Call 818 261-1758, email bob@tullioB2B.com or visit www.tullioB2B.com.
Over the last 37 years, Bob Tullio has sold video games, cigarette machines, cranes and juke boxes to bars and amusement centers, full line vending to public locations and office environments, pay telephones to retailers, coffee service to thousands of office locations and of course, micro-markets. He has a very successful track record as key strategist, sales trainer and media manager under the title, "Director of Business Development" for World Wide Vending and Gourmet Coffee Service.