Avoiding the commodity pitch.
There is no question the electronics manufacturing services industry is evolving. One aspect of that evolution is actually hurting the industry, however. As outsourcing has become more commonplace, its salespeople have become less technically competent. At the same time, as outsourcing “experts” at OEMs have retired, they have been replaced by less-experienced personnel. The result is a commodity sale focused on price.
Part of what drives this approach is a focus on “hunters” in the salesforce whose job is to find opportunities. Companies deploying this strategy often also believe there is strength in numbers and feel it is better to hire a larger, less-experienced sales team. Sales in EMS is a numbers game, but feet on the street alone won’t close sales. Preserving margin in EMS sales requires a salesperson who can educate prospects on the specific benefits of selecting their company. Note the use of the word “benefits,” rather than “capabilities.” OEMs make decisions one of two ways. If all competitors appear equal, price is the determining factor. If one competitor does a better job of explaining how they can solve a common problem the customer has, that competitor may win on quality of solution.
A less-experienced salesperson will miss the opportunity to have the conversation that will reveal what keeps the decision team up at night. That opportunity typically happens when a knowledgeable salesperson builds enough of a conversational bond that the prospect feels comfortable sharing their major outsourcing concerns. When a sales conversation never gets beyond basic capabilities or the salesperson is too inexperienced to see likely issues during the sales call and ask the right questions, that sharing is unlikely to take place.
So, does a hunter strategy lock a company into competition based on price? Not always. Here are a few old-school tricks EMS companies used to use to add experience to the sales process:
- Time on the line. Years ago, some companies actually had salespeople work in low-level production jobs for a two-week orientation period to familiarize themselves with the production environment. If this method is used, care should be taken to make sure the salesperson isn’t involved in operations where lack of specific operator certifications would create quality issues. Hands-on experience and education on common issues that arise in the outsourcing process are always useful in sales conversations.
- Highly focused sales presentations. Talking about solutions provided to similar accounts or companies with similar technology challenges is one way to open the door to more candid conversations about challenges a decision team is looking to address.
- Having an expert tag along. Bringing a technical expert on a sales call likely to be facing a specific technical challenge is another way to launch good conversations. This method works only if there is enough of an understanding of the likely challenge to bring the right person and when the prospect knows upfront that this resource will be brought to the meeting.
- Demonstrate a solution to a common challenge on the plant tour. Many companies have the same fears, and processes can be built around those fears. For example, demonstrating a strong process for transferring projects is one way to educate an inexperienced OEM decision team on the complexity of the decision they are about to make, plus sell the fact that your company has a process that will improve efficiency and quality of that activity. However, this type of educated selling effort works only if the salesperson can get the decision team to come for a plant tour.
- Strong marketing materials. A marketing effort that brands your company as having certain points of expertise or discusses specific solutions offered to other customers through webinars, white papers or case studies can also motivate a decision team to discuss their challenges in more detail. The key point here is that material must be relevant to common challenges and detailed enough that decision teams can identify with the issues discussed and addressed in the material. Vague, hard-to-measure claims won’t differentiate.
- Hire and retain experienced salespeople. This likely costs more on the frontend, but definitely provides more value over time. The key point to remember is that years of experience do not automatically translate to a good salesperson. The industry is big enough and the sales cycle long enough that a poor salesperson can have staying power by switching companies every couple of years. The main difference is that a good salesperson can usually discuss specific techniques they have routinely used to turn a commodity sale into a win with acceptable margin, while their less-skilled counterpart will either focus on success/relationship with a single large account, complain about the inadequacies of former employers or maintain it isn’t possible to sell on anything but price anymore.
Populating a sales team with hunters will continue to gain in popularity. The key to success is to give those hunters the right training and tools to outsell their lesser-trained counterparts.
Susan Mucha is president of Powell-Mucha Consulting Inc. (powell-muchaconsulting.com), a consulting firm providing strategic planning, training and market positioning support to EMS companies and author of Find It. Book It. Grow It. A Robust Process for Account Acquisition in Electronics Manufacturing Service; firstname.lastname@example.org.