There have been significant advances in manufacturing productivity in the past century. Historically, production operated under a make-to-stock environment, and it was the salesperson’s job to sell the product. Traditional sales principles worked well under that model and still may for some industries with transactional sales environments. For complex sales, however, the traditional sales process is changing (some might say slowly dying) and modern sales techniques are required to see sustainable growth.
Sales Misconceptions – How this Modern Sales Technique Changes Everything You Think You Know
The modern sales techniques we introduce turn some traditionally held beliefs on their head. These misconceptions can hold you back and prevent you from creating a sales process model that is effective.
The traditional sales model operates with the following principles:
- Large sales require personal relationships.
- Salespeople are encouraged to view their territory as their own business and operate autonomously.
- Sales is primarily an outside activity.
- More salespeople are needed to increase sales.
Complex selling environments require a better method to run efficiently and fill the sales pipeline with a scalable number of solid, qualified leads. Today, competition is fierce in the custom manufacturing industry. Manufacturing equipment advancements, improved materials, and customer demands have led many manufacturers to turn to a custom-built sales model. Under this model, the traditional sales principles are not always the most effective or productive, although many manufacturers are still operating under these misconceptions.
Misconception – Large Sales Require Personal Relationships
Like the chicken and the egg, we must ask which came first—the relationship or the sale? In all honesty, the relationship likely came after the first sale.
The relationship might be a factor in customer retention (repeat transactions); however, on-time delivery, quality, pricing, and return on investment are generally the primary influences. Usually, when qualified prospects show interest, it’s because they have an issue in one or more of these areas causing them pain (related to time, resources, dollars), not because they are looking for a relationship. “Relationship selling” implies that a company has no other differentiators and must rely on the relationship. The pandemic lockdowns forced some companies to look at the value they provide their customers and, as a result, they have had to shift their selling tactics to successfully close large sales opportunities without face-to-face interactions.
Misconception – Salespeople Should Operate Autonomously
In a traditional model, salespeople sell products from inventory and require little interaction with production. In a custom-built model, the salesperson can sell only what the design teams and production have the capacity for, so all must work closely together.
Misconception – Sales Is Primarily a Field Activity
In the traditional sales model, outside, or “field,” salespeople were the norm. Before computers and cellphones, it made sense to have your entire team doing outside sales. While there is still a need for face-to-face activities (and some industries may depend on them more heavily), the majority of work for manufacturers isn’t done in front of the customer.
Today’s selling model requires that selling is no longer primarily a field activity. It is mainly an inside activity with a few distinct functions performed outside. Prospect vetting, quoting, proposals, designing, scheduling, and administrative tasks don’t require a field visit. The same is true for repeat transactional sales.
Misconception – More Salespeople Are Needed to Increase Sales
When looking for sales growth, many manufacturers mistakenly believe that hiring more salespeople will lead to more sales. This isn’t usually the case. In fact, many who change to this new sales model find they need fewer salespeople (full-time reps) to experience increased sales growth. If your production system is running inefficiently, adding more equipment and hoping that fixes the problem doesn’t always make the most sense. Sales should be treated just like any production operation that requires the assessment and execution of required, ongoing process-improvement tactics.
A Critical Modern Sales Technique: Division of Labor
Today, many customers have limited time and prefer a more efficient online or virtual interaction. Customers will spend most of the sales cycle researching on their own before reaching out. Many will read content on websites and contact packagers through website forms or electronic communications. Some customers are less interested in meeting a salesperson until the end of the process, if at all. Often, by the time they reach out, a customer already has a direction in mind and, in some cases, a decision has already been made.
This is why salespeople today typically spend the majority of their time doing activities that do not involve the active sales process. The average salesperson has only a few customer meetings a week and is heavily involved in customer service and administrative tasks. Current compensation practices often inadvertently encourage them to service some accounts heavily and ignore others. Many salespeople either can’t or don’t prospect enough to generate the required sales numbers management would like. Because of this current sales reality, sales can be very fragmented, negatively impacting their sales productivity and results. Because of the autonomy, there is often friction between sales and other departments. In addition, some salespeople are in roles that don’t suit their personality traits (preferences/skill sets)—traits that are required to prospect effectively.
All of these issues can lead to the sales department being inefficient and unproductive. By modernizing your sales techniques and employing a division-of-labor process, your sales team can become more efficient and can close more meaningful sales.
Division of labor was introduced by Adam Smith in the late 18th century as a method for dividing production into different tasks performed by different people. The method is used to increase productivity and output. This same process can actually be used for complex, custom (technical) sales by dividing the sales tasks among people to allow more focus in each area. Division of labor can increase opportunity flow and active sales opportunities.
The division-of-labor model may look a bit different in various companies, but here is one example of how it might work for a manufacturing company.
Program/account management is responsible for retention of current customers and for all low-dollar transactions from both current customers and new accounts. The marketing coordinator handles content creation, developing sales materials, emails, webinars, blogs, and social media and web content, and provides inbound (search engine optimization/pay-per-click) leads to inside sales for vetting.
Inside sales, which takes direction from the business development coordinator, is responsible for prospecting and vetting both inbound and outbound opportunities. The business development coordinator is responsible for managing the overall process with the goal of keeping the outside salesperson’s queue (calendar) filled with qualified sales opportunities on a daily or weekly basis. This includes other administrative tasks, such as following up with RFQ and quotes if any information is missing or reengaging when a prospect goes dark after receiving a quote and there was no resolution. The outside salesperson consumes the sales opportunities and closes the sale. That person might need to pull in technical support and estimating and quoting as part of the process.
Under this modern sales model, you will likely need several customer service reps and inside sales reps but need fewer outside sales reps. One of the biggest benefits is a reduction in labor costs, since outside sales reps are paid much more.
Benefits of Division of Labor
The primary benefits of implementing a division of labor are increased productivity within your sales department, a suitable flow of new qualified opportunities into the active sales cycle, and the opportunity to lower your overall cost of sales. Your outside salespeople are no longer fragmented but instead focused on what they do best. Many compensation structures provide commissions on repeat customer sales, making salespeople more apt to spend time with current customers instead of creating new business. Moving all customer interactions to the customer service and account management team removes that barrier. Of course, compensation should be adjusted to accommodate for the change.
Another benefit is that you can ensure that you have the right person in the right place. With the traditional sales model, salespeople are expected to wear several hats that require distinctive skill sets. Division of labor allows you to maximize your employees’ strengths. Some people are better at nurturing customers, while others enjoy the thrill of the hunt.
This model is also scalable by turning up or down the flow of opportunities based on sales need and production capacity. Using your historical conversion rates for each step in your sales cycle, the typical sale size, the average length of the sales cycle, and desired growth, you can calculate how many prospects your sales development reps and business development coordinator need to interact with each week to sustain your outside salesperson opportunity queue.
Moving to a different way of selling and transitioning to using more modern sales techniques won’t be easy and will take dedicated management support to ensure that each component integrates well and works in harmony. The idea is to maintain sales at a consistent level and avoid spikes and dips. If your current sales model isn’t working, division of labor may help you create a consistent flow of the right types of opportunities.
Ready to learn about the new sales process that can help you creating a more efficient process and bring in the right types of sales opportunities? Contact us and we can walk you through the process. Or sign up for one of our upcoming webinars.