How to Stop Chasing the Business Expert to Make Your Sale

Survey Report of 900 North American Sales Managers

North American manufacturers of complex products are challenged in today’s markets. Customers want equipment and products especially designed to meet their individual needs, and they have more sources readily available to them than ever before. Furthermore, some of those sources—the offshore ones, in particular—can sometimes offer very attractive pricing. Cincom Systems, Inc. conducted several surveys in 2007 with the aim of providing North American manufacturers with additional insight into the current status of product customization in the industry.

Product Customization Seen as Key to Sales Growth

Just about nine out of 10 sales managers surveyed recognized the profit-critical importance of product customization to meet specific customer requirements. Customization and differentiation were essential to obtain and maintain competitive advantage in today’s markets, according to these North American senior sales managers, who all worked for manufacturers of complex industrial, electrical, and transportation equipment and systems.

Despite this overwhelming recognition of customization’s importance, most manufacturers have not defined and executed a mass customization strategy, the survey found. Upper management at more than 40% of the companies surveyed had shown support for customization verbally. But only 25% had taken concrete steps such as changing the organization, purchasing equipment or systems, documenting the strategy, or announcing a specific initiative.

In another set of inconsistent survey findings, sales managers generally said they had confidence in their companies’ ability to manufacture, market, and sell a customized product.  Concurrently however, they were much less confident about their companies’ ability to estimate costs and optimize speed-to-market for those products.

Sales KPIs (Key Performance Indicators) Are Valued But Not Measured

In still another set of inconsistent responses, several KPIs were seen by sales managers as important indicators of ways to improve sales performance. However, few of these KPIs were actually tracked by the companies that acknowledged their importance. The metrics for customer-facing time, time-to-quote, quotation rework, order accuracy, and cost of sale had the greatest discrepancies between their perceived value and how frequently they were tracked. These five metrics are extremely important to customers, as well. In addition, inadequate documentation and a perceived lack of knowledge about options on the part of customers/buyers were two other major barriers slowing the move toward customization at their companies.

Chasing the Expert Is Too Often Necessary to Make the Sale

Furthermore, sales representatives currently spend too much time and rely too much on “chasing the expert” to sell a customized product, said many sales managers. While actual manufacturing and delivery of a product may be difficult to accomplish in less time than they are today, other steps in the sales process perhaps could be compressed, which would result in a shorter sales cycle. Some manufacturers in this survey reported that more than 18 hours of effort and more that 18 days of elapsed time were needed to complete specific steps in the sales process. As you might surmise, these companies were likely to find themselves at a competitive disadvantage in today’s markets. Other companies reported completing sales-process steps with less than an hour of sales effort and a day or less of elapsed time; these manufacturers could obviously outperform their competition. 

Unfortunately, for many firms in this survey, their lengthy sales cycles appeared unlikely to decrease by much in the near future. Many sales reps at these companies were not empowered to close a sale without specialized technical assistance. In fact, the average salesperson needed specialized engineering or IT assistance at least 75% of the time to complete a sale. Fewer than 10% of the sales force sold customized products without assistance more than 75% of the time, according to the sales managers surveyed. A lengthy sales cycle was the result, which was highly frustrating to customers and salespeople, as well.

How to Get from Where We Are to Where We Need to Be

To thrive today, North American manufacturers are challenged by their customers to provide specifically designed and built customized products. To produce those products efficiently and cost-effectively, sales and delivery cycles need to be compressed. Customers look for suppliers with whom it is easy to do business; that is what brings customers back for repeat business and cross-sales. Manufacturers that can make it easy for customers to obtain complex products that meet individual needs on time, on spec, and on budget will increase their competitive advantage and be market leaders in their industries.

Based on the survey, the following recommendations are offered for consideration to North American manufacturers of complex products:

1. Compress sales as well as production cycles. Companies that succeed in doing this will be able to offer quality products in a shorter time and with lower administrative costs.  While many manufacturers have implemented lean manufacturing, very few have implemented a lean front office. There are great opportunities for improvement here.
2. Empower the salespeople.  Knowledge-based Guided Selling and Product Configuration systems can reduce sales representatives’ dependence on Engineering, IT, and other sources of technical assistance. By moving product knowledge closer to the point of sale, sales representatives in the field can determine the right mix of standard product and customization to meet customers’ needs and close the sale quickly.
3. Automate the recording of Key Performance indicators (KPIs). Respondents identified a number of these as being extremely important, but relatively few were actually tracked.
4. Design products and processes for mass customization. The ability to quickly and cost-effectively produce customized products will be key to competing against off-shore, low-cost manufacturers. 

About the Author

Jim Wilson
Program Director, Cincom Acquire
Cincom Manufacturing Business Solutions

Jim has more than 23 years of experience in the software industry working as a chief architect, development manager, and product director. Jim has also been directly involved in the development and successful implementation of Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) solutions for numerous world-class manufacturers.