Capital equipment market requirements and the competitive landscape are constantly changing. Capital equipment and its applications often test the limits of physics, chemistry, and material science. Buyers come from all corners of the globe. To successfully sell equipment in this environment you need a local, culturally sensitive, well-equipped, and well-trained sales team.
What’s Wrong with the Factory-Based Selling Model
Many capital equipment companies cope with capital equipment technical complexity and market challenges by defaulting to a factory-based selling model. In this model, the field sales team’s fundamental role is to cultivate customer contacts and facilitate access for factory product experts. It’s up to the factory experts, often the product managers, to qualify customers, deliver customer presentations, configure solutions, and field product questions.
However, a factory-based selling model doesn’t scale, and it results in weak customer relationships. Consider these issues:
- If the only way to win a sale is by the product expert touching it, the bandwidth of this expert becomes the fundamental limit on revenue growth.
- Since the local sales team has been reduced to a conduit for factory-based experts, they have little to contribute to the customer relationship. As a result, their relationships remain shallow.
- Product experts who spend all of their time on sales support leave no time to plan, develop marketing content, or create long-term competitive advantage.
- A competitor with a stronger local presence can easily out hustle you by operating in real-time while your salesperson waits for a response from the factory expert four time zones away.
- Sales situations are often assessed incorrectly since the factory experts are unlikely to be sensistive to the nuances of the customer’s local culture, organizational dynamics, native language, and business practices.
Interestingly enough, it’s often the factory experts who perpetuate this situation. They are seduced by the attention and recognition that goes with being the”only-one-that-can-make-it-happen.”
Beware of the Sales-Support Treadmill
As a product manager, if you parachute in to make a sales presentation to a prospect, know that what you are doing is not marketing. You are a marketing guy selling. If you consume the majority of your time with one-prospect-at-a-time sales support, you are stuck on the sales-support treadmill.
Why are you not spending more time on real product marketing work? Your first instinct might be, “I don’t have time because I’m always doing sales support.” Consider that it might be the other way around. Sales support consumes you because you have not done the marketing work. Signs that this is the case include
- Nearly all your customer visits are for tactical sales support,
- Routine specification responses require your help before they can be completed,
- Every product presentation is a custom creation by you for a specific customer,
- The best presentations are on your hard drive,
- Salespeople constantly call you with questions about the standard product, and
- You cannot remember the last time you conducted a formal sales training session.
When you have not deployed the capability to substantiate your value proposition, a salesperson will always drag in the product expert to directly support the selling effort. He has no choice.
Now imagine if
- Your sales materials articulated a compelling value proposition with all the material, data, and case studies to prove it,
- Your sales materials addressed all the key questions, objections, and issues that prospects are likely to raise in the sales process,
- Your product specification answered ninety percent of line items in a prospect’s request for a proposal,
- Access to those sales presentations and support materials was easy for the salesperson,
- You had a turn-key, demo process in place that confirms your value proposition, and
- You had a robust and continual sales training program.
If the above were true for your product line, you can bet that the level of tactical support the sales team required from you would fall dramatically. You must get your marketing infrastructure in place to step off the sales-support treadmill.
However, if you have determined that you are stuck on the treadmill, do not reach for that emergency stop button. You have made yourself a critical part of the order-closing machine. If you stop supporting sales cold turkey, orders could come to a grinding halt. Fixing this situation will require you to shift from doing sales support to enabling others. To do this, follow these three steps:
- Determine which sales-support activity is creating the biggest demand on your time.
- Define and execute a project to fix it.
- Go back to number 1.
These projects might include developing specification documents, presentations, data sets, value models, training programs, and quoting tools. Include anything that would enable the sales team to get the support they need without pulling the top product expert directly into the process. At first, you will struggle to find the time to work on these marketing infrastructure improvements. However, each time you go through the three steps, you will reduce your time on the sales-support treadmill. Which in turn, frees up more time to develop and deploy more enabling capability.
We can’t ignore that the “urgent” tends to overwhelm the “important.” So, you should implement a management and control system to ensure that you make continuous improvements. For example, if you had a routine of quarterly sales training events, you could use these events as deadlines for each incremental improvement in your marketing infrastructure. You could then build a continuous improvement process around this deadline like the one shown in the figure below.
Roadmap for Localizing Selling Capability
Your objective is to put as much selling capability as close to the customer as possible. You want the bulk of the selling process to be executed by those working day-to-day, in the same time zone, and the same culture of their customers. By localizing product and application expertise, you’ll enable the sales force to become a valuable resource to your customer. The sales team that can answer a customer’s question in real-time rather than say, “I’ll ask the factory and get back to you tomorrow,” is the sales team that will have robust customer relationships.
Because of the decision-making nature of capital equipment markets, you’ll probably never wholly design the factory out of the selling process. Management will always play a role in demonstrating long-term commitments, and product management will likely always support the majority of future product discussions. However, a large portion of the sales support process can be localized, including the ability to:
- Position products within each account/region
- Configure the product offering to meet specific customer needs
- Design successful demonstrations
- Prepare and present product presentations
- Draft standard specification responses
- Review product performance data
- Handle objections
- Conduct regional market analysis including competitive information and pricing analysis
- Coordinate and implement local promotion campaigns
Getting to a point where a handful of factory-based experts aren’t necessary to support the items above directly can take a long time. To be candid, it may never happen like the elusive zero-defects quality objective. You’re always getting closer but are never quite get there. Continuous improvement needs to be your battle cry.
Product management’s responsibility is to drive constant progress toward localizing selling capability. Almost all high-technology capital equipment companies start with a heavy reliance on factory-based experts to execute the sales process. Over time, the best ones localize more and more of that capability. The roadmap in the figure below describes three typical phases capital equipment companies go through to localize their selling capability.
In the first phase, the emphasis is on creating the sales toolkit that will ultimately be deployed to local sales teams. It’s here that the mindset shifts from developing a selling tool that addresses a specific sales issue to a robust sales toolkit that supports a variety of selling situations. This requires that more thought be put into articulating your positions and value proposition. It also demands that the sales materials, such as sales presentations, reach higher levels of professionalism and clarity. No longer are the latest and greatest presentations living somewhere on the product expert’s laptop. In this phase, selling materials are peer-reviewed, optimized, and posted in a central repository for others to use. You are in essence institutionalizing the knowledge of the product expert in preparation to transfer it to the field.
In the second phase, you are creating the first new set of product experts outside of product management to support the sales process. Often this is a factory-based organization called regional marketing, technical sales support, or the like. They are organized to reflect the topography of your market. For example, this group might be organized by geographic region or product application. Their charter is to provide first-level technical sales support. They are armed with the tools and training that product management developed in phase one and carry a significant portion of the technical sales support load. As a result, product managers spend less time on the sales-support treadmill. Since these new product experts focus on specific customer groups, they also advance the cause of developing deeper customer relationships.
By the time you get to phase three, the regional marketing team’s ability to provide technical sales support is almost indistinguishable from that of the product manager. Here their focus shifts from “doer” to “enabler,” and they begin to emphasize developing local selling capability. The objective is to hire and develop local resources that can execute the majority of the selling cycle without relying on direct contact from factory experts. As the organization continues to grow, most new investments in marketing and technical selling capability shift to local organizations, as opposed to expanding the factory organization.
Think of this sales capability localization model like a franchise business model. With a franchise, headquarters is responsible for developing the processes, infrastructure, and tools to enable the franchisees to sell their products in their local markets. Headquarters spends more time working on the problem of creating sustainable demand than on individual transactions. Also, as the franchise grows, most of the new resources are added at the franchisee, not the franchisor, level. The franchise business model was developed to create a highly capable distribution channel for great products. While not a perfect metaphor for capital equipment distribution, the concept does apply.
How to Implement the Localization Roadmap
For steady progress localizing selling capability follow these three steps.
- Determine where you stand against the localization roadmap.
- Define, plan, and execute the next most important steps to become more localized.
- Go back to step one and repeat for continuous improvement.
The localize selling capability model assumes a decent size enterprise. To truly develop self-sufficient local selling capability for capital equipment requires a local arsenal of product and applications specialists in each local market. This is not practical for a small organization. On the other hand, if you don’t push your organization toward localizing selling capability, you’ll never grow past being a small enterprise.
Even if you never fully localize your selling capability, there’s tremendous value in just making consistent and persistent progress. Your local sales teams will develop stronger, multi-dimensional customer relationships, and your product experts will have more time to develop and implement product strategies to create a sustained competitive advantage.