Industrial or B2B presents unique set of challenges.
Vendors may be selling to an intermediary for example an EPC or a contractor who in turn may be executing the project for an end user. While the intermediary may be more concerned with price, speed and availability, end user may focus on quality and performance. Managing diverse decision criterion requires fine balancing of relationships and strategies.
- Getting the product as an industry standard or emerge as a default choice is most important part of marketing. This may require informing and influencing not just the end user, but intermediaries like EPC also. Importantly the design folks within the client organization and outside need to be influenced and won over.
- B2B environment is highly competitive, in fact in some segments your former employees may be working for your competition with complete tacit information about sales strategy. Often there would be handful of customers with balance of purchasing power tilted towards them.
- B2B markets also highly exposed to commoditization. Pricing pressures could be high. Product cycles may be shortened by innovations and substitutes emerge often to displace the markets.
- Replacement market is a major growth opportunity. But the decision-making can be short, and unscientific. Replacements are made are 3rd party advice, availability, and price rather than quality or performance.
- White labelling or contract manufacturing is yet another sales growth opportunity that brings its own challenges of cannibalization of focus.
- B2B sale requires sales process to be customized to the procurement process. Unlike B2C business cold calls by themselves will not get business. According to a Forbes article, more than 50% of B2B sales resources consistently miss their targets. Many orders fail to materialize as the arc of meeting; educating, influencing and closing the order have been missed.
How can one ensure their B2B sale is firing? Right structural alignment, adherence to process to capture the activity at each sales stage, and appropriate incentive systems help a company realize right sales outcomes is what I actually needed to make B2B sales happen.
Get the right rhythm of activities between arc of initial meeting, mapping of key decision makers, product education and influence, defining right commercial terms and closure. End users need to have a solid reason to place an order, may need to follow up documentation and hierarchy before the decision is made. Customer segmentation, need analysis, profitability and associated risks must be weighed much before you respond to an RFP. If the end user happens to be government or large organization additional challenges of bank guarantees, penalties and receivables must be evaluated in detail.
With increased adoption of mobility and availability IT tools, companies can use appropriate structural arrangements to minimize the cost of sales and yet improve reach and conversion. Sales structures must include not just direct sales teams, but inside, partner and product teams that complement the direct sales. Create a dynamic sales organization that not only covers the markets, but builds partners and ambassadors for it. A dynamic sales organization must include:
- Inside sales – Identify people, Google search, secondary data
- Sales Executive – Feet on street, Coverage, Meet people, Verifying data and collect Information
- Branch Manager – Administrative Cover, Link with Technical and Project people, Pre-order and post-order point of contact
- Product Manager – Technical specialist, Influence Design/ Technical team, Identify the cost saving technical options, Match/ Improve technical
- Regional Manager – Business Leader for the region, Price and Margin manager
- General Manager – P&L leader, management representative, maximum interest with company and across company, Revenue Leader
With new technologies B2B companies must realize sales resources are not the only one to open door and neither opportunities nor marketing is the exclusive promoter. With many B2B buyers self-educating using tools like social media, vendors need to effectively empower and promote product and application engineering teams to network and influence the ecosystem, right from design companies, EPC contractors, Standard setting bodies and user community. Role of product management that helps in inform and educate, influence the design and procurement teams by its expertise and bring alignment between requirement and solution is often under invested. Product managers are key to requirement gathering but also define the specs of an RFP. Promote product management –client and design interactions at all levels.
Invest in sales operations. Sales operation has different meaning for every company. In some, sales operation does number collation and crunches data. In some they are responsible for system, programs and process. In some they are responsible for pricing and participate in large complex deals. Fundamentally, the role of sales operations is to capture the data related to sales activities, and help sales team to make decisions based on data rather than subjective assessment. Sales operations more than just being a data sink, helps integration benefits to the organization by linking various activities.
Make available non-sales oriented platforms and information content to inform, educate and advocacy of their expertise and products. More educational content from a B2B vendor helps in build trust and respect for its expertise. Share original content on social media platforms and optimize for search. Companies that go beyond their product range and address the complete industry are seen as leaders and more such content augments the credibility of the company’s brand.
A major change B2B vendors need to make to their sales strategy is to consciously move away from the decades old sales playbooks they treat as mantras. B2B vendors who just moved their sales process to modern technologies without fundamental changes in the sales engagement find the results are always below expectations. With the new technologies and information intensive markets, B2B vendors may have to rework their sales playbooks but also rethink how they are enabling the sales person to decipher and deepen the customer’s knowledge. While adopting the new technologies ensure the playbooks allow sales resources to adjust their individual strategies and styles to add value to the sales engagement process.
T R Saivinoth