NEWS RELEASE July 2019
Would You Rather Share Sales Leads with Your Allies or with Your Competitors?
Companies have become very successful through making acquisitions and then allowing each division to function independently. Many of these same companies rely on sales leads for new business. Is it fair to ask the question: Would you rather share sales leads with your other divisions or with your competition?
The answer may be that the risk to limiting independence is paramount. If so a bottoms up rather than top down information sharing program will be a great choice. Another relevant question: Can you also leverage your relationships with sales representatives, distributors, complimentary product suppliers, and OEMs to boost sales?
The answers to these questions depend on whether the product is general or high performance. A sales lead on a product which will be purchased next month strictly on price and delivery can best be provided by a company specializing in sales leads. A high-performance product sales campaign requires a comprehensive approach which can be achieved with internal information sharing among divisions.
The market is changing. Products which would have been purchased just on price in the past are now purchased as if they were high performance. If decisions are made based on true cost (total cost of ownership) then the category would be high performance. Price and delivery play a role but other factors are more important. General performance product decisions are typically made by purchasing people at the plant level. High performance product purchase decisions involve a number of people. They include corporate people who would determine which suppliers are eligible.
High performance in a narrow definition can just include products in severe or critical service and products which require engineering prior to production. This definition focuses on the physical aspects of the product. A choke valve fits this category in three ways. The service is severe since abrasion and corrosion potential is high. The service is critical because if the valve fails the operation must cease. There are a number of engineered choke valves which take months to produce and deliver.
A broader definition of high performance includes products which otherwise would be in the general class. The fact that the cost of travel to an offshore oil rig is high will influence what would normally be just a price decision. Products which are purchased not just on price but because they are intelligent would fall into the high performance category. The product manufacturer can supply localized software which feeds into an edge computer which then feeds into the cloud. The supplier expertise about his product can be used to maximize the product performance. The package of the product and its smart devices can be sold based on the cost savings over time rather than on initial price.
Another category is “guided”. Product decisions can be made based on the guidance or support furnished by the supplier. With the ability to monitor the product operation remotely, the supplier can advise operators and maintenance personnel to insure that the cost of ownership is minimized. Revenues based on annual contracts can greatly exceed the initial purchase price.
Bob Buckman wrote a bestselling book titled “Building a Knowledge Driven Organization” He was the chairman of Buckman Laboratories, a major supplier of treatment chemicals. One of the features incorporated at Buckman is a process where sales or application people can ask a question in what would now be a chat room and every employee at Buckman who would have knowledge was urged to weigh in.
We previously used ten divisions of Idex as an example of how the sharing program could work Bottoms Up Collaboration Around Each Major Flow and Treat Prospect. Examples of ten Japanese purchasers were provided. They will buy spend $17 million per year on products such as specifically available from IDEX (Serviceable Available Market) and $2 billion per year on pumps, valves, and controls (Total Available Market).
If one browses LinkedIn for people who would have useful information in the effort to sell high performance products to these ten companies, you see hundreds and possibly thousands of people in the various IDEX divisions who can make contributions. There are regional sales managers in Singapore and many product specialists in various locations. But there are also application specialists with titles such as “Natural Gas Dehydration Glycol sales manager. One division makes material size reduction equipment and has process knowledge which will be helpful to the pumps, valves, and controls groups.
The bottoms up knowledge sharing is one of the features in a whole new sales approach explained in Most Profitable Market Program at www.mcilvainecompany.com
The foundation of the program is the forecast of purchases by each major prospect. This information facilitates coordination with representatives and distributors in new ways. They are often suppliers of systems and have process knowledge. Their knowledge about a BASF plant in their territory can be useful in selling to BASF plants elsewhere. Better yet they can provide successful case histories
|Quality of Various Sales Lead Sources|
|2||Representatives and Distributors||Care Needed||High||Can be High|
|3||Complimentary Product Suppliers||Care Needed||Good||Useful|
|4||Your Suppliers||Care Needed||Fair||Spotty|
|5||Sales Leads||High||General Only||None|
Many sales reps sell complimentary products. Why shouldn’t the OEMs leverage the synergies proactively rather than rely on representatives to do so. Suppliers of materials and components are another resource. The concern is that they may also be dealing with your competitors.