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Written by Mike Buetow   
Monday, 31 March 2008 19:00

“Prospects lie,” warns Sue Mucha. Her new book tells EMS companies how to overcome that.

Sue MuchaNot many people have seen the electronics manufacturing services industry through as wide and varied a lens as Susan Mucha. Her history with contracting dates to 1981 with Olin King and SCI Systems, considered the father of all contract assembly. Her 27 years in the sector feature high-level stints at a number of mid-sized and large-scale players, including Avex (now part of Benchmark), Flextronics, XeTel, Elamax, and Sparton Electronics.

Along the way, Mucha and the industry have been literally intertwined. It was Mucha who, during an IPC meeting in 1994, co-coined the phrase Electronics Manufacturing Services as part of an effort to re-brand a budding group that was seen largely at that point as low-grade board-stuffers. Mucha wrote and developed the public relations program for the label that eventually saw the term recognized by industry and Wall Street. For her efforts, she received the IPC Presidents Award.

ImageDuring the past several years, Mucha has regularly instructed program managers at conferences and workshops and advised EMS companies on marketing and sales. This latest chapter in her career led her to author a new book, Find it, Book it, Grow It – A Robust Process for Account Acquisition in Electronics Manufacturing Services. The first manual ever penned specifically for EMS program managers, it was published last month. She spoke with Circuits Assembly in early March.

Who would be best served by reading this book?

The reality of account acquisition in EMS is that virtually everyone in the company has a role in sales. The EMS provider is selling people and processes, not equipment. From this standpoint, anyone who touches the customer would be served by reading it. For example, operations personnel are often critical to a sales effort because the customer bases their decision on fit. This book explains the value of having operations teams engaged in account acquisition and gives them a process overview. Program managers benefit from suggestions related to account growth planning. Senior executive management gets a better view of the process and industry dynamics. Sales and marketing may find new ideas or even validation of their current strategies.

Why should someone pick up Find It, Book It, Grow It, instead of the large number of broader-based management and marketing tomes available? In other words, what’s your differentiation?

This is focused on the EMS account acquisition process. I see a lot of companies try to model account acquisition after distribution, which is more of an activity-based process because someone is always buying something. EMS is different. It has a large geographical customer base. It has large dollar sales with multifunctional decision teams. It’s a complex process. This is what I’ve seen work – and not work – over a 27-year career in EMS.

When you get down to it, most EMS companies claim the same skills: “more responsive,” “better reach,” “turnkey supply chain management,” etc. In the book, you note, “The quality and fit between project teams is often the only major difference between EMS providers.” What do you recommend to clients insofar as differentiation is concerned? And do individual EMS companies over-focus on marketing those traits?

I think many EMS companies over-focus on what their nearest competitors are advertising and do something almost identical instead of looking at what customers truly value and can be pitched into a point of differentiation. What I preach is to learn about what keeps your customers up at night, and what your team needs to address in the plant tour. Your marketing and sales teams, then, should do the legwork and reinforce those ideas.

We talk in the book about sales models and what would work best for different organizations. If the salesperson is doing their homework and the operations people can put on their best faces when the customer comes in, well, that’s the core of what this book is about. It’s a process just like SMT. You need to focus on results, not just sales calls. You want to target a select number of prospects. Marketing should help narrow the focus.

How should a company in acquisition mode or that is notably changing size over a fairly short period of time communicate this to its customers or the market?

If a company is changing its focus because of the length of sales cycle – typically 12 to 18 months – its marketing strategy needs to reflect the company it is going to be, not the one it is. For instance, if you are migrating from a job shop to a turnkey EMS provider, you want to market turnkey services and systems vs. continuing to promote prototype expertise as your core business.

If you are on the block or a company that is acquiring, you need to talk to the decision teams and give adequate assurances because they are going to hear the rumors. And you need to be crisp in communicating. At one company I was employed by that was undergoing significant restructuring, our communications strategy for customers and key prospects included frequent messages from senior management and mailing copies of all press releases. Sales and program management also followed up after a release to see if customers had questions. The best strategy really depends on your disclosure policy. Internal staff needs to know what can be publicly released and when. Companies in play, for example, can have trouble closing deals, especially when rumors start. The right thing to do is have a very good disclosure policy and make sure the key contacts in accounts near close are informed in line with SEC rules and other disclosure policies.

Chapter 4, on Account Acquisition Dynamics, plainly states, “size matters.” But how big does a company need to be before size doesn’t matter?

What it boils down to is that some decision teams feel picking the biggest is a safe choice. And maybe the top three to five players get on a lot of bid lists because people look for the biggest. An experienced corporate decision team might understand there are other things to look at. If you want factories in all regions in the world, you can get that from most of the Tier One EMS companies. But, as a customer, will you really use them all? And if not, do you want to pay for that overhead? Smaller EMS companies start to look better when OEM teams really look at their needs and match capability and business focus against their requirements.

When a company goes from, say, less than $20 million in sales to, say, $100 million to $500 million in sales, would they almost inherently need to rework their program management approach?

Not necessarily. They may have to rework the kinds of accounts they focus on. This will fly in the face of some traditional Tier 1 wisdom that says you can be all things to all people. But if you’re a $10 billion company, you’re still being judged on your ability to grow. If a company is going from $100 million to $500 million, what they really need to focus on is larger pieces of business. It’s extremely difficult to close 100 new programs in one year. It’s much easier to focus on closing on 10 to 15 programs with significant revenue. The industry feeling is that it costs as much to manage a small program as a large one. The difference is, as you grow in size, your definition of “small program” changes.

You advise to “sell the sizzle, not just the steak.” How?

The biggest thing is by walking the talk. Give examples of things you’ve done. Customers don’t care about your sales revenue or number of employees or amount of equipment or number of factories; it’s, Can you solve the problem they need solving at the budget they have for it? Just saying you have great response time or lots of satisfied customers doesn’t give them much sizzle. Showing them how you’ve done it on programs of similar size and scope does.

How much effort should a salesperson spend on dismantling the competition in the eyes of the customer?

Very little. Customers don’t want to hear criticisms; they want to hear what you can do for them. The more they hear your solutions, the closer you get to winning the account. If you criticize the competition, the customer won’t believe you, even if you are telling the truth.

What do you coach non-sales or executive staff on when prospective customers are doing site evaluations?

I think the first thing is that it’s important for the sales person to determine the decision-makers in the account and their needs. The subject matter experts can then tailor their presentations to the prospect team’s issues. Then it becomes a conversation among peers about solving a problem.

How important is the bid response time?

I think there are two factors here. From what I see industry-wide right now, and I ask this question in workshops, the average is about 2.5 weeks, and some regularly turn full turnkey bids in two weeks. I think you need to be close to industry standards, but I don’t think it’s worth turning them around faster if the quality of the pricing is going down.

If you are at three weeks, you’re probably still OK. Over three weeks, there’s a credibility issue, unless it’s an especially complex project. Sales needs to pull in the right information to begin with, and a lot of what I’ve seen is salespeople who are afraid to go back and ask the customer questions. You’d be amazed how often that happens. Customers, for their part, often don’t like to give full packages because it might tip off contractors that they are shopping around.

In the book, you warn about “assuming that small orders are the correct path to winning larger amounts of business.”

It gets back to the risk equation. Some OEMs want to “try” before they make a large commitment. What I’ve found is if you go back to that OEM and say, “You want to see best pricing, I need volumes of X,” you get the larger order. If you send the signal that small orders are fine, you’ll get more small orders.

“Prospects lie,” you warn. Should program managers do the same? If so, when?

No. This is an industry in which if you embarrass the customer, they can lose their job. By embarrass, I mean failure to deliver or failure to warn. The best thing you can do is go back to the customer and say, “No, we can’t do that.” But a program manager shouldn’t come back with a big “no,” but rather come back with “I can’t do this, but I can do this or this.” Some program managers feel they can just wait until the product doesn’t show up and then they can talk to the customer. I say no. It’s better to give the customer the news early on.

In your experience, what are the ideal media for marketing services?

An integrated marketing program is very important. You have a scattered market that is jumping in and out of buying. It may be a two-year cycle. It becomes very important to have message timing that is hitting your prospect list in various ways. The decision team is pretty busy. They probably don’t want to be bombarded by email. Press releases and articles are very important, especially if they address a problem a potential customer is having.

There’s some value in trade shows, but as I’ve written [see “Thriving in a Splintered Market,”], right now with the way trade shows are splitting up, there’s some negativity because prospects are very dispersed and this hurts lead generation.

Print magazines probably give you the best opportunity to focus on a specific target audience. In the purview of the prospects you are trying to target, magazines still give you a lot of opportunity. On the Web, it’s hard to know what you’re really paying for. I think directory listings can be helpful, but most people don’t shop by directory. It’s not the medium you use; it’s that you have a variety of media that allows you to touch the right set of prospects two to three times a quarter, and your message is such that you communicate the right things. If all you are advertising is on-time delivery, it might not be effective. But if it’s directly aimed at a solution, that can work. Also, with advertising, you can time when that message will appear and to whom it will appear.

How do you suggest managing rogue salespersons – those who are effective in closing deals but decidedly not by the book or team players?

It depends on the type of rogue they are. I think the key is, if they are just a good salesperson but not excited about sales meetings, that’s one thing. If they are high achievers but don’t necessarily bond, you put up with it because true competitors are not necessarily team-centered. On the other hand, if they are making promises you can’t deliver, you need to cut that person loose. This isn’t a car where the buyer drives it off the lot and the relationship ends. This is a long-term relationship, and if you start disappointing right off the bat, you will not be profitable and it’s not in anyone’s best interests.

While relatively rare in EMS, some companies do use a model where the lowest performer each year is terminated.

You have a 12-to-18-month sales cycle; it is very hard to tell the difference between a good salesperson who takes awhile to close accounts and a poor salesperson. You need a good mechanism for evaluating the leads that come in. I recommend a phase strategy. We call it phase migration, which represents the stages of the account as its gets closer to closing [see figure]. It shows whether this account is in phase 1; this is about to close, etc., where you migrate them down a funnel, because that allows you to have interim measurements of your prospects. If the salesperson never gets past the quoting phase, it’s a good sign you have someone who is good at activity but not much of a closer.


What did you yourself learn over the course of writing this book?

I think I learned I could work on three hours sleep for a year [laughs]. It forced me to think back over the experiences I’ve had over the past 27 years, and because of the longer format of the book, I did more introspection on the fine details of the account acquisition process than I had in a while. I’ve always said that account acquisition is a process, but in writing the book, I really peeled back the onion to look closely at elements in each stage of the process. A good analogy is the difference between an internally developed quality system and an ISO 9001 certified quality system. When ISO certification first became popular, a lot of companies that thought they had good internal systems found they still needed to evaluate their processes and then document them more thoroughly. What writing the book did was make me really drill down and ask, What are all the elements important for me to talk about in making these easy for readers to build a robust account acquisition process? It forced me to organize the “knowledge transfer” element at a much more detailed level than I’ve done for articles and workshops.

Mike Buetow is editor in chief of Circuits Assembly.



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